WHEN GOLDMAN SACHS SPEAKS IS ANYONE LISTENING?

WHEN GOLDMAN SACHS SPEAKS IS ANYONE LISTENING?

James R. Fisher, Jr., Ph.D.

© March 15, 2012 (The Ides of March)

Depending on your perspective, today, March 15, the “Ides of March,” Greg Smith, former top executive at the Goldman Sachs brokerage firm, is either a turncoat, whistleblower or just another frustrated slob like nearly everyone else.  In any case, he chose this date, the day after leaving the firm, to publish his reasons for leaving. 

The “Ides of March,” which literally means the middle of the month, was the date of the betrayal of Julius Caesar by Marcus Brutus and other Roman senators in 44 B.C.  Whether Smith chose this date strategically or not, it will be interesting to see what follows.

He claims Goldman Sachs is more interested in profits than people.  You may oh hum, what else is new?  This was standard operating procedure before the Wall Street crash of 2008 when Lehman Brothers disappeared.  Post-2008, Goldman Sachs and others on Wall Street wrenched their hands, and promised to extirpate excesses, only to return to business as usual once the dust cleared.

So, what do we make of this titan of Wall Street who suddenly betrays the hand that made him rich?  Should we be surprised that Goldman Sachs stretches what is legal with little regard for what is ethical?  Should we see him as hero or heel? 

Quite frankly, for one who controlled customer purse strings of over $ trillion and had influence across the globe, especially for Goldman Sach’s US equity derivatives business in Europe, the Middle East and Africa, he is actually telling us Op Ed page readers nothing new, nothing we didn’t know or suspect, and certainly nothing startling.

Cheating has reached a cultural norm.  

So, what does he say in his confession ("Why I am leaving Goldman Sachs”) that would reach us above the blasé?   Frankly nothing.

He says the Goldman Sachs environment is as toxic and destructive as he has ever seen it.  He then goes on to tell of his idealism coming from Stanford University twelve years ago finding the firm, over the years, descending into a culture of greed. 

To put an asterisk on it, he reveals how multimillionaire brokers brag about selling clients worthless or marginal paper, how they described customers that comply as “muppets,” and how the bottom line is about “ripping eyeballs out” of clients in the interest of getting paid. 

Then we wonder why there is an "Occupy Wall Street" moment, well intentioned as it might be, that has little or no impact because outrage becomes an end in itself.

Smith says, as if he again is telling the reader something it doesn’t already know, that “the firm’s leadership has changed the way it thinks about leadership.”  Some have written this tectonic shift has been going on for sixty years, so why the sudden surprise?  Leadership has been replaced by management, and nowhere apparently more assiduously so than in the management of this brokerage firm. 

He says, “Leadership needs to be about ideas, setting an example and doing the right thing.”  One word describes this, ethics!

Ethics is nowhere to be found in the morality of our times.  It doesn’t exist in the home, school, church, company or government.  Ethics has taken a holiday.  To suggest that by saying "ethics counts" will change anything is to be trapped between angst and anger if not naiveté.   

Leadership is about getting outside the ego, outside the delimiting aspects of the culture, outside the pecking order and into the business of seeing, serving and saving the culture from itself, especially when it is so wrapped up in how wonderful it is that it goes forward with blinders on. 

Has Smith taken them off?  Before you decide, listen to the current ways he claims people such as he have become leaders in Goldman Sachs:

(1)   Persuading clients to invest in stocks the firm wants to get rid of.

(2)   Convincing clients to trade stocks that will bring the biggest profit to Goldman Sachs.  He calls this “hunting elephants.”

(3)   Trading illiquid (his word) and opaque products that look impressive but aren’t but have three-letter acronyms.

He ends by saying, “People who care only about making money will not sustain this firm.”  He sees it as a matter of trust. 

But if anything is lacking today, it is trust, self-trust as well as the trust of others.  Polls confirm this. 

Peggy Lee once sang a song in which there is a line “Is that all there is to love?”  Greg Smith, giving him the benefit of the doubt, is saying to readers that he climbed the heights of the money tree and was left with the refrain, “Is that all there is to money?”

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