I’ve self-destructed in many jobs before, but never as publicly or popularly as Greg Smith, who resigned from Goldman Sachs in an op-ed in the New York Times. (I know, I know: Some commenters will say I self-destruct daily in this blog, but hang with me). He decried a culture of “ripping off” clients. “The firm,” he wrote, “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.”
Matt Taibbi, who famously wrote that Goldman “is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” might ask, what took this 12-year veteran so long to realize the toxic culture at Goldman and elsewhere. Heidi N. Moore of Marketplace Radio had a more nuanced interpretation:
I see Smith’s self-immolating, public letter of resignation as more about the 99 percent and the 1 percent within Wall Street. It’s the objection of the underclass of younger bankers and traders stymied by a lack of career mobility, suddenly disillusioned, coming to a realization that despite all their hard work, not everyone actually makes it on Wall Street – and “winning,” anyway, may not be a prize worth having if its means making it to the top of a widely-attacked industry and signing on to more of the moral compromises that get others into the corridors of power. As the Wall Street bonus pie shrinks, those internal wars at firms get more and more small and petty – not just between traders and bankers, but trader versus trader and banker versus banker. Smith’s opus falls into this camp.
The reality is that Goldman and its cohorts cooked up the bubble, with its dodgy “investments” (read frauds), that brought the financial system to the edge of collapse and had to be bailed out by American taxpayers and the Federal Reserve, dolling out the future living standards of Americans. And they got away with it. The real causes, especially laissez-faire capitalism, captured regulators and a political system run by money, were quickly rewritten: The collapse was really caused by minorities getting mortgages they didn’t deserve through Freddie and Fannie. So reform was stymied and, as Smith’s op-ed makes plain, nothing has changed. Why, for example, is MF Global’s Jon Corzine still at large?
This is a cry for help: Reinstate Glass-Steagall. Return Wall Street from gambling to the rather dull business of assembling capital for productive, job-creating enterprises, and all overseen by effective regulators. Otherwise, all the public resignations won’t matter. The next bubble of swindles is being cooked even as you read.
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Today’s Econ Haiku:
Apple keeps rising
Wish I’d bought when it was low
There an app for that?