This sort of little announcement usually means little to the outside world:
Greg Smith is resigning today as a Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.
OK, another banker/broker type has made his wad by making great deals from which he made profits, and he's off to do other things with his wealth that interest him more.
No biggie, happens every month somewhere.
This little announcement is different, because it is attached to Mr. Smith's Op-Ed piece in the YewNorkTimez, announcing the reasons for his departure. It is a wonderful thing to read, in no small part because Mr. Smith tells us in tones loud and clear that Culture Shapes Economy Before Economy Shapes Culture, which is what OS has been saying alllllll along.
Every paragraph is pithy, and the article is pre-loaded to blow up in the faces of the G-S PR hacks who will go to great lengths to destroy his reputation. (OS assumes Mr Smith has great lawyers to protect him when G-S calls in its favors to the SEC and Justice Department to have him prosecuted and sued for his public departure. The Corleones used the garotte and decapitated heads of favorite horses. Our modern-day Corleones use the bought-and-paid-for government.)
One of the best portions--it is difficult to choose--is this:
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. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.
It astounds me how little senior management gets a basic truth: If clients don’t trust you they will eventually stop doing business with you. It doesn’t matter how smart you are.
Mr. Smith writes of humility, integrity, working for the best interest of the client, respect, work ethic--all the hallmarks that make a great business, a great family, a great house of worship, a great city, a great country. When those things go away, it is only. a. matter. of. time. before things cave in upon themselves.
So, thanks to Mr. Smith. He will undoubtedly go through the swamp full of alligators and sewage once this article gets around, and OS assumes he has a book deal in place, for which this essay was a teaser. If not, he'll have one by the end of April. OS hopes he carefully tucked plenty of very damning evidence away in his briefcase for these past several years. One always needs a bit of leverage in dealing with sociopaths--they respond only to the prospect of gaining more money or power, or to the fear of exposure and humiliation. An appeal to ethics or any greater good simply does not register anywhere within what little may remain of their souls.
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