Goldman Sachs executive Greg Smith made headlines last week with a public letter of resignation from the legendary firm. Smith's letter chronicled the ethical decline that led to his departure, and has sparked renewed interest in the culture of unmitigated greed that animates the world of high finance.
In his letter, Smith refers to a "toxic and destructive" environment, in which profits are the sole concern and clients are routinely referred to as "muppets." Of course, Goldman Sachs rejects this characterization of the firm, and it didn't take long for caricatures of Smith's resignation to begin circulating on the web. Despite these attempts to distract and discredit, the letter serves as a potent reinforcement of America's deep-seated distrust of Wall Street.
The attitudes and practices described by Smith are emblematic of why we had the financial meltdown. Capitalism has become the blunt instrument of unrestrained greed. Cynicism and arrogance reign, while "antiquated" notions of ethical business practices undergirded by a humane morality are rejected as naïve and ineffective. What the disciples of Gordon Gekko's infamous "greed is good" philosophy fail to recognize however is that a truly free market is impossible without mutual trust. Perhaps they don't care. After all, they are making money, and life is good! Who cares about honor? What is the market value of integrity? If there's a house in the 'burbs with luxury cars in the driveway, a penthouse in the city and the best private schooling for the kids, then the means don't matter, right? If clients are too dumb to realize they're being taken for a ride, that's their problem! Fiduciary duty? That's a concept that has become passé.
This is the spirit of social Darwinism run amok. Only the strong survive, while concern for one's neighbor or for "the common good" is pooh-poohed as weakness masquerading as altruism. Caveat emptor, baby! Of course, what these short-sighted, self-centered, soulless predators fail to realize is that a system based on lying and cheating is fundamentally unsustainable. Eventually the chickens will come home to roost and everyone will suffer loss. That is, of course, unless the federal government designates you "too big to fail," in which case you will be insulated from the consequences of your actions with a taxpayer-funded "bailout."