People quit jobs every day, but this executive director at one of the biggest global financing firms published his complaints against his former employer on today's op-ed page of the New York Times. Needless to say, he's making a splash in the world of high finance.
One way to interpret what he's saying is that the film "Margin Call" could have been a documentary. In that minor Hollywood release, Jeremy Irons' character (John Tuld) utters a memorable line (a far more subtle one than Gordon Gekko's famous "greed is good" from Oliver Stone's Wall Street):
"There are three ways to make a living in this business: be first, be smarter, or cheat."According to Smith, this ruthless logic has taken hold at Goldman Sachs.
Consider this exchange from Margin Call:
Sam Rogers [Spacey]: And you're selling something that you know has no value?
John Tuld [Irons]: We are selling to willing buyers at the current, fair market price.
This kind of mindset, according to Greg Smith, has taken hold at Goldman Sachs, which was once the envy of the financial world for its customer care, humility, and integrity.
According to Smith, Goldman is now morally bankrupt. As he puts it in today's Times (underlining is mine),
Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. . . .
It makes me ill how callously people talk about ripping their clients off.
. . .
These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave.
. . .
I hope this can be a wake-up call to the board of directors. Make the client the focal point of your business again. Without clients you will not make money. In fact, you will not exist. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again, so people want to work here for the right reasons. People who care only about making money will not sustain this firm — or the trust of its clients — for very much longer.This is exactly the heart of the problem (as I've put it before): the pursuit of money, a good external to the actual welfare of one's customers, is trumping the goods intrinsic to the pursuit of one's business, which would be devoted to providing the best service to one's customers.
Smith is right--and we should all applaud him. He didn't just tell the boss to "take this job and shove it." He blew the whistle on corruption at the heart of Wall Street, while pointing to a better way.
