Is Goldman Sachs corrupt?
That’s the question in a lot of people’s minds after a scathing op-ed published by a resigning Goldman VP who was stationed in London. In the letter he excoriates Goldman’s leaders. He claims that in the good old days, some 12 years ago, Goldman had a culture that emphasized pride and belief in the firm. But now he claims he can no longer look prospective employees in the eye and tell them how great Goldman is; the culture is all about making money.
Critics have latched on to the article, citing it as proof that Goldman really is a giant vampire squid wrapped around humanity’s face. But others have noted that anyone who took 12 years to go from Stanford University to being a VP at Goldman clearly was not on the fast track. His boasting of appearing in a recruiting video and coming in third in a ping-pong tournament bespeak of someone who is perhaps not as hot as he thinks he is. Is the letter just sour grapes?
No doubt there is much to be concerned about on Wall Street. The culture has changed, especially since the 1970s, when almost all brokerages were private partnerships and most money was made through advisory business, to today when there are trillions of dollars in custody and billions of trades are transacted every day. So I’m not naïve: some people will cut ethical corners to keep rising and sometimes the wrong people are in the wrong places.
But this is true of all large financial firms. In today’s world, large amounts of capital and sophisticated analysis are necessary to make many deals work. Goldman is like many others, trying to manage serve their clients, shareholders, and employees. It’s just easier for a smaller firm to keep things in that order.