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03.14.12

Goldman Sachs Executive Quits in a New York Times Piece, Did He Just Realize What Goldman Does?

A Goldman Sachs executive quit in a highly viewed New York Times op-ed on Wednesday, moaning that the investment bank has lost its ‘spirit of humanity.’ Tunku Varadarajan asks, did Greg Smith just wake up from a fairyland?

Greg Smith woke up one morning this month, covered from head to toe in icky, slimy Vampire-Squid ink. After 12 years at Goldman Sachs, most recently as executive director and head of U.S. equity derivatives in Europe, the Middle East and Africa, he decided he could no longer tolerate the moral turpitude at a place of work that had netted him—oh, at a conservative estimate—some $10 million over a decade. Cleansing himself was the only way to stay pure. So cleanse himself he did, with a cathartic op-ed in The New York Times, in which he announced (before telling his employers) that he was quitting Goldman Sachs—in effect, trading in his impressively lucrative job for 15 minutes of fame.

Smith’s cri de coeur is being regarded as something noble—and not merely because of the unusual spectacle of someone walking away from millions. But to this reader, Smith’s jeremiad comes across as cynical and insincere, and Smith himself comes across as little better than a sanctimonious git. He describes the ugly Goldman he now feels compelled to leave as a place that has lost its “spirit of humility,” a place that, once upon a time, “wasn’t just about making money.” Yet Smith worked there for 12 years, in the belly of the beast. Did it take him 12 years to realize that Goldman isn’t a nonprofit? You’ve got to love his prelapsarian tone, his contention that this edifice of integrity, so humanitarian when he started 12 years ago, has suddenly turned diabolical, caring only about m---y.

You’ve got to love his prelapsarian tone, his contention that this edifice of integrity, so humanitarian when he started 12 years ago,has suddenly turned diabolical, caringonly about m---y.

I have no love for Goldman Sachs. I, like many others, enjoy referring to the firm as “Vampire Squid.” Goldman has had conflicts of interest since its founding. All banks that trade their own books have them.  It was never a firm of genteel do-gooders. (For a thumbnail summary of Goldman’s conflicts, read Michael Maiello’s review of William D. Cohan’s Money and Power: How Goldman Sachs Came to Rule the World). Smith joined the firm in 2000, the time when the dot-com bubble burst, hardly a period when, as he puts it, Goldman’s work “revolved around…integrity…and always doing right by our clients.”

So it seems to me that Smith made his fortune, doesn’t have to work anymore and can safely couch his retirement in heroic rhetoric. I do hope he and his lawyers are clear on any non-disparagement agreements that he may have signed over the years. And I do hope he will give to charity all of his tainted lucre, made in all those years when he was part of a firm that ripped off its clients, even as he lacked the fiber to push back, protest, stand up for the little guy—or the fiber to resign a lot earlier than his theatrical resignation after 10 cycles of bonuses.