"And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control."
John Dalberg Lord Acton
This is an interesting commentary not only on Goldman but on the entire Anglo-American banking cartel as well. An executive at the 'bank' has resigned in moral revulsion.
But Wall Street need not fear those who refuse, in acts of conscience, to participate in the looting of customers and the abuse of the public trust. There are always others more than willing and eager to take their place. Siewert, Former Geithner Aide, Heading To Goldman.
The reaction from Wall Street is that Mr. Smith, a ten year veteran, sounds naive. Dick Bove just told one of the giggling spokesmodels that if Goldman rips off its customers, and the suckers keep coming back for more, then that is the stock to buy. They are just that good.
Let's not get too misty or wax romantic about this. Goldman Sachs was a major corrupting force that contributed to the collapse and Depression of the 1930s, earning their own chapter in John Kenneth Galbraith's The Great Crash of 1929, In Goldman Sachs We Trust.
Greg Smith's comments on leadership are spot on. The tone of an organization is heavily influenced, if not set, by the behaviour and the policies of the leadership. And the part that character and honesty play in this has somehow been forgotten, abandoned.
"A genuine leader is not a searcher for consensus but a molder of consensus."
Martin Luther King
I can advise Mr. Smith that if he is disgusted at the behaviour on Wall Street, he ought never to go to Washington, which is replete with those who would do anything for power.
When it comes to 'ripping off their clients,' the politicians of the past twenty years are the real professionals. Not only thieves, but rapists and torturers and conmen.
And this is why the relationship between the corporate sociopaths and the government, known colloquially as crony capitalism, is such an historically recurrent theme. Heart speaks to heart.
This Republican primary is one of the most disgusting spectacles of pandering and deceitful cynicism that I can remember. And the Democrats and their faux reformers are little better. MF Global and the lack of investigations and prosecutions in times of general financial fraud prove that.
Corruption is the coin of the realm. And the nation suffers.
"The preposterous claim that deviations from market efficiency were not only irrelevant to the recent crisis but could never be relevant is the product of an environment in which deduction has driven out induction and ideology has taken over from observation.
The belief that models are not just useful tools but also are capable of yielding comprehensive and universal descriptions of the world has blinded its proponents to realities that have been staring them in the face. That blindness was an element in our present crisis, and conditions our still ineffectual responses.
Economists – in government agencies as well as universities – were obsessively playing Grand Theft Auto while the world around them was falling apart."
John Kay, An Essay on the State of Economics
And that is why there will be no sustainable recovery, but instead, the whirlwind.
NYT
Why I Am Leaving Goldman Sachs
By GREG SMITH March 14, 2012
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for...
It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal e-mail...
Read the rest here.
