The big news out of the island of Manhattan this week was the gripes of a resigning Goldman Sachs executive, the proverbial parting shot heard round the world. Instead of the usual poison pen letter to the boss or even a YouTube video posted on the Internet, Greg Smith ground his ax to a fine edge on the op-ed page of The New York Times.
He grabbed a lot of attention, and reactions were predictable. Those who think the nation's preeminent investment bank is an evil empire had a chance to say, "I told you so." Wall Street veterans were either shocked or nodding in agreement, but mostly they were amused. Comedian Stephen Colbert crowned the turncoat "Banker-dict Arnold." The value of Goldman stock dropped (and a lot of ex-employees probably smiled at that).
The portrait Mr. Smith, the former head of Goldman's equity derivatives business in Europe, the Middle East and Africa, painted of Goldman was of a callous, ethically challenged workplace where clients were regarded as mere tools for expanding Goldman profits. Deals were made not because they were in the best interest of customers but because these elaborate, complicated transactions made the most money for Goldman Sachs.
"It makes me ill how callously people talk about ripping their clients off," he opined. "I have seen five different managing directors refer to their own clients as 'muppets,' sometimes over internal e-mail."
Admittedly, the reader has no way of telling whether the writer, who worked at Goldman for 12 years, is merely a disgruntled former employee trying to embarrass his old bosses or whether he is what he portrays himself to be — an idealist disillusioned with the current vulture-like attitudes at a company that once "revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients."
But we do know about Muppets — and not just the Jim Henson variety. How often have any of us felt like a dupe (or potential dupe) when confronted by some specialist — a stockbroker, perhaps, or an IT consultant, plumber or mechanic, proposing to sell us something?
The transaction goes like this: We have some need — to invest in our retirement, to get our car to stop making funny sounds or the faucet to stop leaking — and we go to someone with a great deal more knowledge in the appropriate field. He or she proposes a fix, the merits of which we have little to no understanding of (although it's usually expensive), and we reluctantly agree.
Now, what do you think many of those specialists say about their ill-informed customers behind closed doors? "Muppets" is probably the kindest word imaginable.
This is why Mr. Smith's column resonates with Americans in an increasingly specialized world. It's the "aha" moment when you realize that, at some level, we are all susceptible to being conned, and not just by Wall Street.
Granted, it's not hard to spot this kind of behavior in the financial sector. This was hardly the first time greed and excess on Wall Street had come to light. Never mind the company's subsequent claim that this is not how Goldman operates; the circumstances of the crash of 2008 provided ample evidence of the industry's moral shortcomings.
But it's really a broader problem than that. When the repairman says your dishwasher's electronic controls are the culprit, or the plumber says your problem is a broken pipe buried in your front yard, do you know better? Some may, but many of us don't. We look at the evidence, we listen to the explanation, we may even consider getting a second opinion — but at some point there's a leap of faith involved.
Conversely, do we all have moments when we have to explain our business to a "Muppet" who can't seem to grasp what we do on their behalf? Even if we don't call our customers or colleagues Muppets, even in private, don't we sometimes think of them that way?
Alas, there is no easy fix here, only the necessity that we must not make decisions solely on the word of people in expensive suits — or perhaps in a mechanic's overalls. And that honesty is still the best policy — in business and in life — whether you are a Muppet or dealing with one.
Even so, it's nice to think that even those Goldman Sachs executives, with their seven-figure bonuses and custom-made Italian shoes, still have to take their high-end cars to the mechanic once in a while or get the plumbing in their house in the Hamptons fixed. "Lloyd Blankfein, your Bentley's differential timing shaft needs to be reseated. You can pay at the counter marked, 'Muppet.'"
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