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About That Op-Ed

If I quit Goldman, can I get NYT real estate, too?

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The talk today has been of an op-ed published today in the New York Times in which the author announces his resignation from the venerable investment bank Goldman Sachs, accusing it of having lost its way. It’s a really weird piece: when one sees a big, Jerry Maguire-style statement in such a prominent, influential space—and when that space chooses to publish it—one expects a certain reckoning with fundamentals. In the case of a cri de coeur against Goldman, one anticipates an indictment of America’s financial system and of how Goldman exploits it to create massive profits for its executives, employees, and shareholders at the expense of ordinary Americans.

Instead, author Greg Smith drops buzzwords like “leadership” to accuse Goldman of some weird, un-Goldman character flaw. “Make the client the focal point of your business again,” he implores the Board of Directors. Occupy the Client! (Goldman’s top two responded to the op-ed.) If Smith wants to leave his lucrative career of making money off of money in a way that contains a questionable amount of social utility in favor of a lucrative career of consulting/writing jargon-filled books about business/trying to become the next Michael Lewis, then that’s his business. Why the Times is helping him is what I can’t surmise. At close of business today, winning bronze in ping pong at the Maccabiah Games remains something to be proud of. This op-ed is not.

Why I Am Leaving Goldman Sachs [NYT]

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Keynes, as I’ve learned reading Jerry Z. Muller’s brilliant and concise ‘Capitalism and the Jews’, had some retrograde ideas about the role of Jews as agents of social change. To the extent that investment banking is the handmaiden of the creative destruction that accompanies modern capitalism, it’s a double-edged sword, but is not without utility. Upstarts with new ideas need funding, and the benefits of their enterprise can be broad and far reaching, whether in medicine or information technology, as well as disruptive. But it has been an integral component of American economic success, from the outset.

The problem with Goldman now seems to be that it is no longer dedicated to serving that goal primarily, but rather exists to promote the enrichment of its executives, at the expense of its clients. Like them or not, there was a time when the firm produced a slew of public servants, Tim Geithner only being the most recent of them. And it’s hard not to conclude that whatever vestiges were left of the ethos of civic-mindedness evaporated when the firm went public, the bottom line now the only benchmark of performance.

Smith’s letter was a little idiosyncratic, but the traditional role of investment banking, the embodiment of the philosophy of enlightened self-interest, is still necessary.

Paul Brandon says:

In other words, Smith is a good capitalist, not a socialist. He simply wants the system, of which G-S is a good exemplar, to act the way it’s supposed to.

ha so true, this was a terrible op-ed. selling a newspaper > coherent, well-written content

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About That Op-Ed

If I quit Goldman, can I get NYT real estate, too?

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