Greg Smith's op-ed is nothing more than a cranky banker's sex tape.
The internet hasn't been this excited about a finance story since Mr. Taibbi at Rolling Stone invented a new sea creature to characterize.
In case you've been under a rock for the past 24 hours, the media is flying off the handle about an NYT Op-Ed by ex-Goldman ED Greg Smith.
More than a few people in my network, all of whom are anti-finance, have come out strongly in support of Mr. Smith as some kind of hero for speaking out against the machine.
I think they are not only wrong, but falling for Mr. Smith's carefully crafted marketing message.
Since when do we assume that sales people have our best interests at heart?
It is patently absurd to assume that anyone who makes a living on transaction volume or associated fees is looking out for you. We assume that marketplace actors are selfish. We assume people are selfish. Western governmental and economic standards are predicated on the belief that actors will exploit the limits of their power and charge what the market will bear.
We experience this skepticism of salespeople every day. We don't walk in to an AT&T store assuming the sales people will recommend a Verizon product if it better suits our needs. We have an entire library of jokes about used car salespeople. What's different about banks?
It would seem that sell side institutions, particularly, were just too good at doing what they were meant to - sell stuff. The clients buying complex equity derivatives packages from Mr. Smith should have done a much better job of executing due diligence than they did. The shareholders of institutions that blew up because they held subprime exposure should really be upset. They trusted management to be better stewards of their equity dollars.
Management has a fiduciary responsibility to look after investors. Your salesman does not. It would have been a violation of that responsibility to not try to grow GS's profits.
So why release on Op-Ed?
My guess? Political run. What's the best way to distance yourself from a career in the least popular area of the least popular firm? Be the guy who came out against it. You can almost hear the stump speech: "I came out against Goldman when everyone said I was crazy. It's time to get back to our American values..."
Forget the fact that this guy has been cashing paychecks all these years, and instead of trying to change GS culture, he just chose to depart and flame them.
Mr. Smith took a page from Paris Hilton: If you have the prerequisites to be a star but need a media push, expose yourself.
He can't be expecting much in the way of new finance opportunities. He's young enough to hit the White House. He's crafting a message. Don't get suckered in to his salesmanship.