Worse than changing the passwords on your boss’ computer or performing an all upper decker in the executive washroom, former Goldman Sachs derivatives executive Greg Smith became big news when he very publicly quit his job with an op-ed piece in the New York Times.
Titled “Why I am Leaving Goldman Sachs,” the editorial declared that the environment at the firm was “toxic and destructive.” Smith, while admitting he saw nothing illegal, said that the firm is focused more on funneling clients towards business that will earn Goldman fees and not make clients money. He witnessed five managing directors refer to their clients as “muppets.”
To an extent, all specialized workers have an insular culture that views anyone outside of their realm as some kind of inferior rube. This applies to auto mechanics, fire fighters, soldiers, stock brokers and even journalists.
But what every professional is ultimately judged on is how well they do their job. When you’re trapped in a burning car, do you care if the fire fighter there to save you is an insufferable prick who cheats on his wife? Firefighters and police are often contemptuous of the people they serve—cops in New York reportedly refer to hipsters as “marshmallows” because they are “white and soft.” But when my building is on fire, I could care less what names the first responders call me behind my back so long as they do their job and I stay alive.
Likewise, if you have money invested with Goldman Sachs, you are probably OK with their culture being one of contemptuous disregard for “unsophisticated investors” so long as they get you a good return on your money.
High stakes jobs attract egomaniacs, whether it be brain surgeons, fighter pilots or investment bankers. When you can make millions of dollars disappear in a matter of seconds or scramble someone’s mind with a tremor in your hand, a giant ego will help stop the mind from drowning in a miasma of worry and panic. You want people in these positions to be full of confidence. It doesn’t mean they have to act like giant dicks about everything, but don’t be surprised when they do.
Financial people take pride in their professional greed. If they don’t make money for their clients, they don’t stay in business (at least not without enormous government bailouts).
That Goldman Sachs is full of avaricious douchebags is about as surprising as a bar being filled with drunks. Smith may be right about the decline of the moral fiber of the firm over the time he’s been there. But he’s bluffing if he thinks the kind of behavior he witnessed is new for Goldman Sachs.
And the op-ed piece, while it excoriates Goldman Sachs for its lack of humility also reveals how much its author is still steeped in the self-congratulating culture of high finance. He boasts about his accomplishments at the firm, even going back to remind everyone how hard it was just to be an intern there. He mentions how he was one of the few employees selected to be in the firm’s recruitment video, that he was a Rhodes Scholar finalist, getting full scholarships from Stamford to study in South Africa. He even brags about being a bronze medalist in the Maccabiah Games, a.k.a. the “Jewish Olympics” (which sounds like something that should be on the Howard Stern show beside Black Jeopardy or Homeless Howiewood Squares). It has the effect of taking one aback at the whole scenario: If this braggart is offended by what he’s seen at Goldman Sachs, how bad must it be over there?
The one actionable bit of information in the Smith piece, that large investment banking face appalling conflicts of interests in both selling and buying securities, would be big news if he had published his piece in 2006. Smith was in the middle of his tenure at the firm then, and went another six years making lots and lots of money before his conscience forced him to resign in the most self-serving and flamboyant way possible.
Goldman Sachs has a prestige to it that other major investment banks don’t have. They have been able to still make money even during times when everyone else was going broke around them. Would an employee’s sour grapes earn prime space in the New York Times’ opinion pages if the firm were any other than Goldman Sachs?
But we need to ask: What is the goal behind Smith’s speaking out against the firm that treated him so well? Did he attempt to tell its senior management about these problems before making his very public rebuke? Why is he doing this now and not years ago? Goldman Sachs’ culture disgusted Greg Smith enough to write a scathing public critique, did it offend him enough to give back any of the money he earned managing assets for the much-maligned “muppets?”
