Evil Empire….Not Quite

Goldman Sachs has recently been painted as the “Evil Empire” by the media, society, and other competing firms since the 2007 Financial Crisis (Great Recession for those who prefer that), and I plan on writing my paper analyzing these claims. For those of you who do not know, Greg Smith, and ex-executive director at Goldman Sachs resigned last year in an OP-ED in the NY Times. In this OP-ED, Smith claims the culture of the “once great” Goldman Sachs, is what has hurt them in recent history. Goldman Sachs, responded by an intensive investigation of the firm in which very little of Smith’s claims were proven and as a matter of fact, Goldman has come back out at Smith. Smith then responded by writing a book about Goldman Sachs (just released) in which he discusses all of the major issues he saw with Goldman during his time there. Goldman, has also been faced with a variety of other scandals recently. I do think Goldman has been labeled unfairly, mainly because they have been put under a microscope because they have been considered “the best IB” for years and I also believe that many who judge Goldman are uninformed regarding their businesses.. The most recent issues, involved MBS, structured products/derivatives, and Goldman’s culture are very interesting and I think they should be looked into in more detail in Paper 2, especially, because the majority of these issues were brought up in previous classes. I previously worked at Goldman this summer, so I have been exposed to “both sides of the story” and I look forward to writing this paper. (ps. sorry for the late post, I traveled with the football team and did not have internet access).




5 responses to “Evil Empire….Not Quite

  1. I think it would be interesting to compare your experiences at Goldman with Smiths claims and Goldman’s responses. It would allow for a unique perspective as you would capture three different views of the company in roughly the same time period. I think it would be very interesting!

  2. I’ve always wanted to know more about Goldman Sachs. People like to paint them (and other firms) in a bad light because who better to blame for the financial crisis than the “fat cats” on Wall Street? Talking to Prof. Gruver might also be interesting, given his history with the company. This sounds like it would be a great paper topic!

  3. I think the recent news about Greg Smith is interesting given how his real motives were less noble. Obviously everyone looks to the banks when the recession hit, but you can’t automatically draw these conclusions. However, I did recently talk to someone who had switched professions from JP Morgan, and she said the main reason was “that immoral things were happening every day.” It’s an interesting subject.

  4. I considered doing this article for the blog post as well because I found the topic so interesting. The fact that you have experience with the company will definitely be helpful when comparing and contrasting your experience at the company with his. Clearly Greg Smith was trying to make a statement by resigning so I wonder if there was another underlying factor that caused him to leave or simply that he was sick of the company and its “dog eat dog” mentality. I respect him for leaving when he realized that he could no longer look kids in the eye and tell them that it was a great company to work at. The topics of leadership and ways to get into the leadership roles could be very interesting paper topics to consider.

  5. Who is in the picture?

    I saw something in a news article about how Smith’s account had been corroborated by some other internal people (especially the troubling account of advising clients one way and then betting against that advice.)

    There were several govenemnt investigations and perhaps lawsuits around some I-Banks and their practices of betting against their own clients, or deliberately pushing “junky” financial instruments. Those may be a good source of information that is outside the world of spin and counterspin of the media.

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