The Goldman Sachs Muppet Show

The editorial published in The New York Times on Mar. 14 by Greg Smith, a former Goldman Sachs executive and the head of an equity derivatives business in Europe, the Middle East and Africa at the time of the article’s publication, has brought renewed public attention to the delicate issue of ethics in the banking system. Greg Smith’s suggestively titled editorial, “Why I Am Leaving Goldman Sachs,” added oil to the fire by saying the things that the critics of the controversial Wall Street bank have been saying for a long time, namely that the Goldman Sachs environment is toxic and destructive.

Among Greg Smith’s accusations are allegations that the bank’s management changed its business philosophy and that it allowed its clients to be insulted over the internal email system on a daily basis. “These days, the most common question I get from junior analysts about derivatives is, ‘How much money did we make off the client?’ … You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about ‘muppets,’ ‘ripping eyeballs out’ and ‘getting paid’ doesn’t exactly turn into a model citizen,” Smith wrote in his editorial.

Of all his accusations, these were the ones that drew the attention of most commentators. Consequently, the Goldman Sachs management, after having ridiculed the publication of the editorial by pinning it all on the “individual’s” disgruntlement made the bold decision of scanning all the internal messages exchanged between its employees so that the latter stopped treating valued clients like “muppets.”

The alienation of the banking system in general, and of Goldman Sachs in particular, which beyond all ethics, treats clients as mere objects, has revealed one of the causes behind the major crisis that we are experiencing. The hypocrisy of the banking system, which claims to place utmost importance on the client’s interest, collapses in the face of the evidence. And Goldman Sachs is not the only entity experiencing existential moments that stunts like the one involving “muppets” cannot conceal.

Goldman Sachs’s defense turned out to be stereotypical and inefficient. In vain did New York mayor Michael Bloomberg deem Smith’s editorial to be “ridiculous,” and in vain did he pay a courtesy visit to Goldman Sachs’s headquarters. No one can forget that the New York City budget depends on Wall Street bonuses. The scandal that Greg Smith’s editorial caused has once again emphasized the fact that Goldman Sachs has become an immense hedge fund, and the management’s statement — that nothing has changed as far as the bank’s values and organizational culture are concerned — has remained echoless. During the four years of crisis, the bank’s management has succeeded in turning one of the most respected financial institutions into the symbol of what is most controversial on Wall Street. Moreover, the critical moments that Greg Smith mentioned briefly (including the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin and Vampire Squids) are signs of a system based on the management’s belief that their company is above law and ethics. To paraphrase Nietzsche, one could say that the people at Goldman Sachs believe themselves to be the “masters” who exist “beyond good and evil.” And what if they are in fact just “muppets”?