‘Goldman Sachs’ must own up to harm caused

Aaron Brooks

The most important piece of news since Bin Laden’s scuba adventure was passed over in two days.

On March 14, Greg Smith’s op-ed, “Why I am Leaving Goldman Sachs,” was published in the New York Times. Because you may have been basking on the beach instead of reading a newspaper, let me catch you up on this tragic disclosure.

Smith, a former director at Goldman Sachs, left his job in more fantastic fashion than Homer Simpson playing Mr. Burns’ head like a bongo drum.

In his op-ed, he identifies Goldman Sachs as more “toxic and destructive” than ever, outs client nicknames such as “muppets” and sales tactics of “Hunting Elephants,” which basically means selling your clients junk…again.

To figure out how, in Smith’s view, Goldman Sachs’ morality can depreciate from god-like protector of the economy to snake oil salesman, I sat down for an interview with Larissa Barber, associate professor of psychology.

“It appears that over time Goldman Sachs’ goals and incentives shifted toward emphasizing the bottom line instead of clients,” Barber said.

In technical terms it is called goal conflict, and arises out of multiple goals that cannot be achieved at the same time.

For example, as students we often experience goal conflict: go out and party or write a research paper. While partying satisfies my goal of social interaction and liquor consumption (short term goal), taking the time to have a well written paper satisfies my need for accomplishment and a respectable grade point average (long term goal).

If you try and complete both goals, often you end up satisfying the goal with short term rewards while performing poorly on the other.

When asked about the pay structure of Goldman Sachs’ and how that could contribute to its “toxicity,” Barber said, “When one behavior is rewarded (short-term profit) and one is not (long-term client relations), it is not surprising to see a situation like Smith describes.”

“Employees who give priority to the company’s monetary interest receive praise, promotions and higher pay, while those like Smith are left with stagnant careers or the option to quit,” Barber said.

You would think that because Goldman Sachs is 80 percent responsible for the global recession we are just climbing ourselves out of, this news would have made a bigger splash. Yet, Goldman Sachs’ stock took two day hit before rising to the highest price this year, and no one in D.C. is talking about strengthening financial reform.

Unless we take action and demand accountability for the harm Goldman Sachs and alike have caused, we will one day face it again. Retirements, savings, business, government budgets all wiped out because the puppeteers on Wall Street wanted that bonus and corner office.

I don’t know about you, but I am tired of getting my strings yanked.