The predictable attacks from the predictable places have already begun to rain down on the Goldman executive who resigned today via a NYT’s Op Ed. But everyone should take his views very, very seriously for all the obvious reasons. However, the Op Ed should be read not only for what he says. It should also be read for the fact that it is necessary for him to say it at all. For example, why anyone would have to say this is a shocking testament to the total corruption of Wall Street and what used to be called banking and is now called finance:
“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.”
He spells out how this happened:
“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. Now project 10 years into the future: 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.'”
Pathetic that a business has to be told that ripping off its clients is bad for business, but the truth is that is the business model of Wall Street and has been for a long time now. That’s what gave us the financial crisis of 2008. Sadly, that’s what is going to give us the financial crisis of 2015 or 2016 or whenever the next one hits us.
Why so confident there’s going to be another financial crisis? Because the attitude and culture that caused this executive to resign continues today throughout Wall Street and much of finance. And, because that attitude and culture is what is driving Wall Street to spend and do whatever it takes to kill financial reform, which is targeted at reigning in the greedy rip offs that Wall Street’s profits and bonuses come from. Truthfully, financial reform is only necessary because the culture and attitude of Wall Street has become as “toxic and destructive” as this Goldman executive makes clear.
