Scarlet Letter for the Greed Generation
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Goldman Sachs, whose exceptional cachet and clout have been enhanced by its role in American public policy, suddenly is a pariah in government and political circles.
Let's assume, for a moment, that the company prevails in the fraud suit brought by the U.S. Securities and Exchange Commission -- that no one was misled about the content of the product it sold, only about the background.
Also assume, as Goldman Sachs executives insisted last week, that most of their customers are supportive of the firm, and that any short-term losses will be negligible.
Still, the Goldman Sachs brand, one of the most prestigious in the world, corporate or otherwise, is tarnished, perhaps indelibly. If the company believes it can tough its way through this, it's as insular as its critics charge.
For starters, the fraud suit, which Goldman says is without merit, may not be the only problem facing the company. The Germans and British are already piling on, and Goldman is reportedly nervous about the full-scale inquiry into the Wall Street fiasco by the U.S. Senate Permanent Subcommittee on Investigations, now under way.
Getting in the cross hairs of the panel's Democratic chairman, Carl Levin of Michigan, one of the toughest, straightest shooters in Congress, is cause for concern.
For context, professionally I've known a half-dozen top former Goldman Sachs executives; they're all able and thoughtful. The one I know well has stellar values.
Also, despite having worked for two of the great financial news organizations in the world for more than four decades, I've never covered Wall Street; I cover politics, a proud journalistic hack. But in this case, the prism of politics is illuminating.
The global Goldman Sachs mystique has been enhanced by the number of executives tapped for leading U.S. government jobs. Robert Rubin, who was Treasury secretary in the Bill Clinton administration, and Henry Paulson, who held the same position in the George W. Bush administration, were former Goldman chairmen, as was Stephen Friedman, the top White House economic adviser during the Bush presidency.
There is a plethora of Goldman alums sprinkled throughout the Obama administration.
First Published April 26, 2010 2:01 am
