Economic Outlook: Mad at Goldman Sachs

By ANTHONY HALL, United Press International  |  March 15, 2012 at 10:56 AM
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One good commentary deserves another -- and always will.

The opinion of the week comes from Greg Smith, who penned a scathing rebuke of his former employer, Goldman Sachs, published in The New York Times Wednesday.

The opinion piece begins, "Today is my last day at Goldman Sachs," which sets up all kinds of warning signs. Is this an employee whose bonus check didn't match his ego? Why is he slamming the door on his way out as loudly as possible?

It's one of those situations where everyone in the office looks up and sees only the door. They don't see someone hanging around trying to make changes within the firm he has come to loathe.

Smith's op-ed didn't say, "This is why I have decided to give back my bonus check" -- his indignation at what he called the erosion of moral fiber at Goldman Sachs only went so far.

We are left to assume money earned at Goldman Sachs is not blood money; it's just shameless money.

That is hardly news. That might even be the motto of the big firms in the most moneyed corner of capitalism in the world, the corner of Wall Street and Broadway. The motto "Leave your shame behind you" works well in lower Manhattan where most people produce nothing, merely skimming off the top, the bottom and the middle of deals in which some else plays the sap.

Again, not news. At Goldman Sachs these so-called suckers are called "clients" in company brochures and "muppets" in company e-mails and witty asides at the water cooler.

Smith seems outraged that Goldman Sachs presents one face to the public, but in private has very little nice to say about its customers. Well, let's not overlook those illusions. When a company puts the word "client" in a brochure or the word "investor" in a quarterly financial statement, the illusion of altruism is a necessary part of the equation. There are five-star restaurants in which no one would eat if the kitchen were exposed. A fancy presentation at least has value akin to restaurants where the food is passable but the table settings are pristine.

There are whole industries built on illusion: movies, fashion, luxury, travel, just to name a few.

So Goldman Sachs would have us believe it cares about clients when in reality it doesn't. Again, this is hardly earth-shattering news. This is Wall Street, is it not?

Further, there was nothing in Smith's goodbye to his former job that pointed out some previously unresolved illegality at Goldman Sachs. It was not the priceless vainglory of a whistle-blower.

It is not exactly news Wall Street firms are not motivated by altruism. There are traders who buy and sell oil, and never get their hands dirty, making hundreds of millions in the process, yet producing nothing. Smith's letter is amusing, even validating, but it isn't news. He is not the first Wall Street executive to wake up one day a bit disgusted with himself.

In international markets Thursday, the Nikkei 225 index in Japan rose 0.72 percent while the Shanghai composite index in China fell 0.73 percent. The Hang Seng index in Hong Kong added 0.21 percent while the Sensex in India shed 1.36 percent.

The S&P/ASX 200 in Australia fell 0.22 percent.

In midday trading in Europe, the FTSE 100 index in Britain lost 0.39 percent while the DAX 30 in Germany was up 0.13 percent. The CAC 40 in France slipped 0.24 percent, while the Stoxx Europe 600 fell 0.29 percent.

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