David Lei | Narcissists saving Wall Street

Many have been arguing that "Harvard Narcissists With MBAs Killed Wall Street." In a recent Bloomberg News column, Kevin Hassett, director of economic policy studies at the neoconservative think tank American Enterprise Institute, alleges just that.

Hassett argues that over the past 20 years there's been a significant increase in the number of Ivy League graduates pursuing careers in finance - and that this trend is inextricably connected to the current economic crisis. As a Wharton junior facing the music, I found this unsettling.

According to Hassett, Ivy League graduates have a "narcissistic" psychology more at ease with outsized (i.e., reckless) risk-taking. And during the boom years, they placed far too much trust in the complex and ultimately flawed models that justified the way they did business.

While Hassett's observations are certainly thought-provoking, they are the product of a serious causal fallacy. Hassett implies that not having a "fancy degree" somehow reduces the likelihood you'll make stupid decisions. That's simply stupid.

In an admittedly superficial survey of banks that have received the largest payouts from the Troubled Assets Relief Program, plus Bear Stearns, Lehman Brothers and American International Group, I discovered that educational background has little to do with who failed and who didn't in 2008.

Yes, as one might expect, several of these firms have recently been or are led by Ivy League grads, with most holding an MBA. But there are some very important exceptions, and these show that personality and circumstance matter more than alma mater.

Maurice Greenberg, the individual credited with setting AIG up for its epic implosion in 2008, attended the University of Miami and then New York Law School. Jimmy Cayne, the former chairman and CEO of Bear Stearns, is a college dropout and never earned a degree.

Ambitious folks - the sort who are risk-takers and want to head global financial institutions - are attracted to Ivy League educations. It's not that the process of attending Harvard Business School somehow magically makes you an arrogant jerk.

And in what might either be good or bad news, depending on how you look at it, none of the firms examined were led by Penn grads at the highest level. That's somewhat surprising given the reputation enjoyed by Penn, not to mention Wharton.

Indeed, the most notable alumni that have been involved in the financial crisis are helping to find a way to end it.

Wharton MBA Neel Kashkari is one of just a few Bush administration holdovers that survived Obama's inauguration. He is still the interim assistant secretary of the Treasury for Financial Stability. Kashkari's office oversees TARP.

And the Senate recently confirmed Wharton alumnus Neil Barofsky to serve as special inspector general for the Treasury. He essentially functions as TARP's taxpayer watchdog.

More importantly, Penn is rising to the new challenges and opportunities this environment is creating. Notably, Wharton is currently the only business school offering a semester-long course on the financial crisis, capitalizing on this "teachable moment," according to Management professor Mauro Guillen.

Guillen, who is teaching the course, wrote in an e-mail that Wharton is already "a leader in the field of risk management. We have a number of financial economists, risk experts and engineers who have been doing research and teaching in this area for years. ... I think we are perhaps the most innovative business school in this respect."

He added that the Wharton faculty must "continue teaching and doing research on financial markets, and on the interaction between the financial and the real economies."

From the most senior Penn administrators, there is a commitment to facilitate just that. In an interview with Bloomberg News last month, University President Amy Gutmann pledged to hire more faculty in the finance and accounting departments and to create courses on financial regulation - a remarkable promise given the halt in hiring almost everywhere else in the University.

Sadly, Hassett is just one of many, in media and in politics, all too eager for someone, anyone, to blame for the unprecedented events we've witnessed in the markets. And ironically, Hassett is an Ivy Leaguer himself - he received his Ph.D. from dear old Penn.

David Lei is a Wharton junior from Brooklyn, NY. He is the former Executive Editor of The Daily Pennsylvanian. The Lei-bertarian appears on Mondays. His email address is lei@dailypennsylvanian.com

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