My Statement Regarding Greg Smith's Goldman Resignation
Wednesday, March 14, 2012 at 2:26PM Today, I have received dozens of media requests and hundreds of emails regarding former Goldman Sachs executive, Greg Smith's gutsy, and internationally resonating, public resignation.
I applaud Smith's decision to bring the nature of Goldman's profit-making strategies to the forefront of the global population's discourse, as so many others have been doing through books, investigative journalism, and the Occupy movements over the past decade since my book, Other People's Money, was written after I resigned from Goldman. It would be great if Smith's illuminations would serve as the turning point around which serious examination and re-regulation of the banking system framework would transpire.
The inherent conflict of interest that firms such as Goldman possess through enjoying the multiple roles of 'market-maker,' 'securities creator' and 'client-advisor' foster an environment rife with systemic risk. The trading revenue portion of Goldman's profits, as well as its derivatives vs. assets ratio, is the highest amongst the American bank holding companies. And yet, in the fall of 2008, the Federal Reserve approved Goldman Sachs (along with Morgan Stanley) to alter its moniker from investment bank to bank holding company, thereby allowing it to gain access to federal subsidies and potential ongoing support.
In this regard, the firm's practices should remain under intense scrutiny by the general public and legislators. I would hope that the message behind Smith's resignation will not be obfuscated by debates over the extent to which the firm's clients are either supported or exploited, but instead, serve as a powerful call to foster a more-strictly delineated and less reckless financial system.
Goldman Sachs, Greg Smith 
Reader Comments (8)
I'd be more impressed with Smith if he: A) Left when it was obvious things were going way off the rails, or, B) Gave back all the money he earned from the deceiptful criminal behavior he now criticizes.
It's great that such a high profile person is speaking out, but let's not turn him into some kind of hero of the 99%. (Even Taibbi seems to be showering Smith with praise - much to my dismay.) Smith's statment may be helpful, it may be informative, but please save words like "brave" and "gutsy" for people who blow the whistle before they profit from the crimes.
I agree Mark - he didn't come across to me as a hero of the 99%, nor did it seem he was trying to be, or will be. It was the nature of the resignation that I characterized as gusty in my comment (though others have been more laudatory of him personally.) In general, I think the focus should be more on the systemic problems that GS imposes on all of us, something that appears to be lost in the kind of celebrity status commentaries out there.
The outcome you desire would be great. We can always hope! But the banksters own the government (Obama Hope and Change? Nope, business as usual.), I seriously doubt they will do ANYTHING that might negatively affect their profits. In other words, this will blow over soon, and it will be business as usual.
I do applaud your efforts to bring about change! I just get discouraged because TPTB are holding all the cards and have absolutely no incentive to change. The silent corporate coup d'etat that took place over the last 3 decades is complete. Once a coup has taken place it's not likely to give up easily.
Nomi,
I saw the link to your statement on ZeroHedge this morning before coming to read the comments here. It's evident that you spend time to consider with care what you're saying before putting metaphorical pen to paper and I agree wholeheartedly with what you've said above.
My feelings? When one starts work in an environment that later changes (for the worse?), I think the natural response (assuming one has a degree of personal integrity and desire to do a good job) would be to try and make the best of it (we all need to work and make an income) or endure it until it either becomes unbearable or until one is in a position to leave. And remaining working there could have meant, in Greg Smith's case, a desire to want to retain the ideals for the company perceived as existing when he started there.
I don't know what GS was like before Blankfein, but certainly all the articles I've read over the last few years suggest to me (and I appreciate this is anecdotal) that changes have been for the worse since he arrived. In Greg Smith's position, wanting to do my personal best, I would have stayed to do that best for as long as possible.
I remember some years ago during the 1990s, working at Reuters (as it was then), one of the top company executives (I wish I could remember his name now!) who said something similar in his retirement speech, saying he had concern for the future of a company whose upper echelons of manamgement referred to its general staff as 'pond life'. I'm not suggesting that this is still the case, but it does show that Greg Smith's case is not the first, albeit credit to him for saying what he's said.
DavidC
I think it is useful to recognize that, just as GS, MS and the mega banks actively seek to shape
domestic and international policies towards enhancing their profits, while protecting their losses, so
also are they agents, in both the national, but particularly in the international sphere, in executing the
global hegemonic policies of the US $ based international "empire". They are essential for success
in the destabilization of potential rivals, through the medium of swaps, currency trading and derivatives.
They are in fact agents of empire, as well as beneficiaries, and as such they cannot be brought to
heel without the risk of loss of US hegemony itself. That, in my view, is while nothing will change
until the US$ itself loses its status as global reserve currency.
David - I thought GS was pretty bad when I was there, and wrote about the culture and practices pretty specifically in Other People's Money. I worked directly in the Lloyd / Gary division as they were ascending, which is why I quit after 20 months. I didn't resign to the NYT of course, and there wasn't much attention paid then to issues I brought up around credit derivatives, CDOs, or Glass-Steagall, since it wasn't as much media-focused upon and before many people started seeing the facts mount.
The fact that it seems to have gotten much worse , since then, is awful - makes you wonder why a lot more Greg Smith's don't speak out. But, good for him for doing so.
Robert - yes, the system enables the rot.
My name is Lucy Furr, and I represent the global public relations and social branding firm, Satan, Inc., which has been retained to burnish the image of Goldman Sachs, a vererable firm which has long served the interests of America.
Certainly, we are the parent firm of the WPP Group, which basically owned the 2008 American presidential election (all the PR campaign people who managed John McCain, Hillary Clinton and Barack Obama worked for our subsidiaries, all owned by WPP), but that doesn't deter us from our holy mission of sanctifying GS.
We have put our top two disciples, Adolph H. and Andrew Breitbart on this matter, and expect to see positive results shortly.
Plus, Lloyd Blankfein, Hank Paulson, et al, long ago signed contracts with us, and their end of the bargain has yet to come into play, so we will continue aiding and funding their public personas.
Really, this Smith character was at GS for 12 years, correct? So was he disgruntled for those 12 years, or only after he realized there would be no further promotions in his paltry career?
Mr. Smith has yet to sign a contracting binding his soul with Satan, Inc., therefore making him an inconsequential person; a non-player.
As we at Satan, Inc. like to say, we're just a silly one-letter position from Santa, ha..ha...ha..ha!
Nothing to see here, please move along......
When you consider the sadists, like you to know who's administering the pain and like you to know there's nada you can do about it, whistle blowers don't matter, in fact they're a plus. They must be saying keep up the good work Nomi, keep on blowing that whistle Greg. And not only from that predisposition, but from another which says: hey if it wasn't for us, what would Greg and authors like Ms Prins write about? There's no regulation possible because the STATE is always owned by the fattest monkeys...so when the people cry for more government and more 'regulation' the fattest monkeys say GREAT! Corruption or evil is always the positive meaning the stronger imbalance, while virtue is always the negative or weaker imbalance, in the world. The only GOOD NEWS is that approximate balance is requisite. So the faster more go over to the evil imbalance the sooner it becomes untenable.