Talk about being “surreal”, to quote the Goldman banker at the heart of the SEC’s current investigation, this has all happened before and will likely happen again. It appears that Goldman Sachs really is the new Drexel Burnham Lambert.
Here is how I see this Lincoln/Kennedy-esque relationship unfolding: Employees from both firms clearly considered themselves the smartest guys in the room. Both firms developed innovative financial products that were eventually abused by select customers at the expense of other customers and ultimately the American taxpayer. Both firms and their employees were the envy of Wall Street because of the huge amounts of money they were making. Both firms became synonymous with greed, lying and all that is bad in finance. Civil investigations paved the way for criminal investigations. Right or wrong, certain high profile individuals are singled out and publicly made an example. Others will fade away and still others will rise from the ashes.
What is even more ironic is that back in the 1980’s when Drexel was at its height of power and influence, I had friends who were bankers at Goldman and they hated Drexel. They thought they were immoral. They said they were doing horrible things. They said they acted arrogantly and brashly. And they relished it when the sharks began to circle and Drexel was toppled. I always interpreted the intensity of emotion with regard to Drexel as jealousy or schadenfreude. I think most of the reaction to Goldman now comes from the same place as opposed to being truly outraged due to moral lapses.
People who take jobs, who make careers on Wall Street, are not doing it for altruistic reasons. They are doing it for the money. I have no problem with that and frankly neither should anyone who derives any benefit from our economic system, which is virtually every person on the planet. I do have a problem with cheating, lying and stealing. I have an even bigger problem with the powerful abusing their positions of power and forcing the little guy not only clean up their garbage but take it to the street and eat it. And I have an even bigger problem when these powerful individuals are convinced that the garbage is no longer there solely because of their brilliance and that makes them both completely indispensable to society as well justified in taking ever larger salaries and bonuses, even as the real world is crumbling all around them.
So in the end, maybe Goldman will get what it deserves. Or more likely, even more than it deserves.