The news that Goldman Sachs lost $2.2 billion in market value yesterday hardly needs any commentary. Share prices fell 3.4% after the New York Times published former Goldman employee Greg Smith’s anti-Goldman op-ed. Smith accused the investment bank of moving away from its core strength: working for the customer.
While Smith was at Goldman for 12 years, it’s not as if the bank’s culture suddenly shifted just before the 2008 recession hit. As Matt Taibbi so brilliantly pointed out in”The Great American Bubble Machine,” Goldman rode a series of bubbles through the ’90s and ’00s, and has had former executives in key White House positions for at least two decades (Robert Rubin, Henry Paulson and Neil Kashmari, to name a few).
We can applaud Smith for what Paul Volcker described as a “radical, strong” piece, but for the better part of the ’00s, he seemed content with the massive amount of wealth being generated by Goldman through shady financial instruments. Maybe the revelation of Goldman’s sub-prime mortgages and credit default swaps, and the resultant anti-Goldman sentiment, awakened Smith. Then again, he stuck around for another four years. Make of that what you will.
Enough of Smith though, as interesting as his op-ed was. What of Goldman’s harsh day on the Standard & Poor’s 500 Financials Index? At the risk of sounding insensitive to how the $2.2 billion will effect Goldman employees: fuck ‘em.
Fuck Goldman Sachs.
Every time the bank watches money evaporate, it should be a cause for celebration. Perhaps they will learn something from Smith’s invective. If Goldman’s behavior in the last four years is any indication, though, they probably won’t.
America and the global economy need ethical banks not just highly attuned to the needs of customers, but to greater need of global economic well-being. Individuals and groups exist with the mission to make money and benefit society and the environment, not just stockholder value, like the Netherlands-based Triodos Bank.
Goldman Sachs, as we have so clearly seen over the last several years, is not one of them.