It’s tempting to get all savvy and snarky about Greg Smith’s op-ed in The New York Times this morning on why he’s leaving Goldman Sachs.
It’s no small thing for someone in an omerta culture like Goldman’s to take to the New York Times to eviscerate the firm. It’s much easier to assuage your Goldman guilt by quietly leaving the firm like everyone else does, preserving future prospects in the financial industry.
Smith knew he’d get attacked by Goldman and I’m sure he figured he’d get hammered on the Internets. But he did it anyway.
What are three quick ways to become a leader? a) Execute on the firm’s “axes,” which is Goldman-speak for persuading your clients to invest in the stocks or other products that we are trying to get rid of because they are not seen as having a lot of potential profit. b) “Hunt Elephants.” In English: get your clients — some of whom are sophisticated, and some of whom aren’t — to trade whatever will bring the biggest profit to Goldman. Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them. c) Find yourself sitting in a seat where your job is to trade any illiquid, opaque product with a three-letter acronym.
So let’s just point out that, all other considerations aside, it took considerable courage and/or nerve to write this. Rolling Stone‘s Matt Taibbi, no naif he, writes this:
There are a lot of people who just want to tear Wall Street down and start over again, but what Smith did in this piece was show that people like him can be part of the solution. What he did couldn’t have been easy – kudos to him, and let’s hope the inevitable blowback sent his way won’t be too rough.
It’s also worth noting that Smith’s views are hardly unique amongst Goldmanites or ex-Goldmanites, as Reuters Breakingviews’s Peter Thal Larsen says:
Indeed, the complaint that Goldman puts its own interests first can be regularly heard from customers, counterparties and even ex-employees.
The New York Times news side shows that by talking to others who have left Goldman:
This guy might as well have had a microphone in the room with me during my exit interview…took the words right out of my mouth. To add to one thing he said, I had never heard the term “rip someone’s face off” until I started working at Goldman Sachs. Unfortunately, that phrase was all too often used in the context of client transactions.
As of now, Goldman shares are down 3.5 percent on the day, with no other apparent reason.
The anonymous Goldman disses, the speculation about his motives (the purely motivated character witness is rare indeed), and the snide remarks about his ping-pong prowess aren’t going to dent the impact of his piece.
Meantime, go hit up The Wall Street Journal, which right now is hosting a live chat about what Smith’s op-ed means about the culture of Goldman and Wall Street.
…er, wait. The Journal is actually having a live chat with a crisis communications PR person on how to flack the response to Smith’s op-ed.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.