The op-ed piece, “Why I Am Leaving Goldman Sachs” featured in the New York Times by former Goldman Sachs Executive Director, Greg Smith, does not come as a surprise to anyone who has been semi-conscious of the joke Wall Street has willingly become.
Greg Smith had choice words for what the too-big-to-fail behemoth Goldman Sachs has morphed into. Anyone with a bit of sense knows that Wall Street didn’t just have an epiphany and decide to hold the US population hostage with its gambling ways, but it’s still a breath of fresh air to hear someone on the inside tell the sleeping public of the corruption within a company where,
“[…] culture was always a vital part of Goldman Sachs’s success.”
Keyword being was.
Since the repeal of the Glass-Steagle Act of 1933 (i.e., The Gramm-Leach-Biley Act of 1999) by Republicans, Democrats and President Clinton, which removed the barriers between investment and commercial banks, security firms and insurance companies, the country has been on the wrong course.
This calculated repeal led to Wall Street deregulation which allowed them to possess more power over the public than most governments. Reagan also played an integral role in the rise of Wall Street corruption. His newfound love of top executives in his cabinet and his way with words, hypnotizing the American public into believing that tax cuts for the wealthiest Americans would “trickle down” (in addition to benefit reductions on lower tax brackets), helped create a culture of two Americas: the haves and have-nots.
So it’s important to understand that the financial crisis of the 2000s (the one we still have to suffer through) didn’t happen overnight, but was decades in the making. With that being said, Smith still alleges that Goldman Sachs chose to ignore company honor and basic trade etiquette for fast money — Even if it meant that the world economy would teeter on the verge of a fatal collapse. On company honor and culture, Smith said,
“[Goldman Sachs] revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.”
I have to give Smith credit for speaking from the heart, but I don’t fully trust the guy knowing that he was a part of a company that helped to destroy the future of this generation and the ones to come. With his annual pay at $750,000, it’s hard for me to feel sorry for his disappointment in his former company.
But I still give this guy credit giving up job security for truth (let’s see what kind of job this op-ed piece lands him…). Again, I think I’m more on the side of Smith than not because I don’t really see what he will gain by writing this piece. The establishment and mainstream media are going to rip his credibility to shreds — And they’ve already started… (And here’s a piece by the Washington Post).
Again, Smith’s excerpt falls right in line with what many of us already knew, Goldman Sachs and its partners on Wall Street were too big to fail, sold toxic assets, lied about credit ratings, collected fees through baseless transactions and then bet against the deals they made. I wouldn’t necessarily call that a lack of honor. Call me crazy, but these actions seem much more treasonous and anti-American.
Apparently the way I viewed this company wasn’t far off from what Smith has experienced since working at Goldman Sachs. In his piece, he added,
“What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.”
Hm, will you look at that? What a coinkydink. You’re telling me that Goldman Sachs only cares about how much money they can make off a client in the short-term and writes off any risk this may have on the company or the country in the long-term? That’s right, because no matter what terrible risk this company takes, they’ll just be bailed out by the American tax payer. That’s not called banking, that’s called stealing.
Overall, I’m glad this piece came out, but it is not enough to cover for the crimes of this company. From mortgage fraud to lying about credit ratings, Goldman Sachs is nose deep in their own shit, yet no one has been jailed. Until these criminals pay for the incompetence, negligence and downright shady ways, this op-ed piece is nothing but a scream in the vast depths of space.