Goldmine Sachs

During the 1980's and 1990's, Goldman Sachs used to get wonderful publicity. Journalists would inevitably laud the firm's stated ethos of teamwork and their supposed lack of a star system. Goldman's oft-stated philosophy of putting their clients first was repeated by gullible journalists as if the investment bankers who populated the company had had a hard time deciding whether to go to Wall Street or join the Peace Corps. Their dictum of being "long term greedy" referred to their philosophy of making money in the long run by cultivating trust and good relationships; this would be regurgitated as scripture as well. And the steady stream of Goldman alumni who ended up in positions of power in various administrations were spoken of as if they were motivated purely by public spirit and not by ego.

Having worked at Goldman from 1984 to 1996, I can attest that this spin was misleading. Stars did exist, and most everybody wanted to be one, but the people most successful at becoming one were almost always the most sociopathic, or at the very least, narcissistic personalities. (Not that this made the firm any different from any other large corporation.) Clients (the firms and municipalities they gave investment banking advice to) and customers (the funds to whom they sold their products) were viewed with all the compassion that con men show their marks. And I've never met a greedier group of people -- either short term or long term.

But the journalists who covered them always swallowed the company line whole.

No more.

Ever since the bailout last year, journalists have turned a much more jaundiced eye on the firm. This reflects the public's mood. Did Goldman really deserve a full payout from AIG after the government bailed out the failing insurer? Why are all these traders and bankers getting million dollar bonuses when their firms would have gone bankrupt if not for the taxpayers? Why this cozy relationship between the federal government -- which is staffed by Goldman alum -- and Wall Street?

Matt Taibbi recently wrote an article for Rolling Stone Magazine in which he famously described Goldman as "a great vampire squid wrapped around the face of humanity, relentlessly jabbing its blood funnel into anything that smells like money."

This is a far cry from the kind of (non-squid-generated) ink Goldman used to get back in the 80's.

In an effort to counter the negative perception, Goldman CEO Lloyd Blankfein recently instructed his department heads to tell their traders and bankers to avoid conspicuous consumption, in hopes that it would stem some of the negative public feelings about the firm. Unfortunately for him, news of that internal memo got out and was widely publicized yesterday. (What's worse, having some emmployees buy fancy houses or cars -- which would probably only attract very local notice -- or having it publicized that the CEO wants them to spend their gazillion dollar bonuses a bit less ostentatiously quietly in a transparent attempt at good PR?)

Blankfein was probably not too thrillled about this morning's article on Page Six of the Post titled "Goldman Sachs Wives Hate to Wait":

"GOLDMAN Sachs boss Lloyd Blankfein has warned his employees to avoid high-profile spending, as The Post reported -- but his wife evidently didn't get the memo.

Laura Blankfein and her friend Susan Friedman, wife of another Goldman honcho, Richard Friedman, caused a huge scene at Super Saturday in the Hamptons last weekend when they arrived at the event before the noon start time and balked at waiting in line with the other ticket-holders.

"Their behavior was obnoxious. They were screaming," said one witness. Blankfein said she wouldn't wait with "people who spend less money than me."

Another observer said the women were so impatient, it was as if they were waiting on line for a kidney transplant instead of a charitable designer clothing sale.

Friedman shouted at the event organizer, "You have lost so much money because of this . . . Why should we be treated like the $650 donors?"

Sources said Blankfein and Friedman had bought tables with blocks of tickets going for $833 apiece, as did many of the women who were waiting patiently in line, happy to raise $3.4 million for the Ovarian Cancer Research Fund.

In the end, the hot-headed duo got in at 12:03 p.m., three minutes after those who arrived before them.

No word on how much of their husbands' money they spent. But Lloyd Blankfein -- wary of bad publicity over the big bonuses he and his colleagues expect to collect at year's end -- has called for an end to conspicuous consumption.

A Goldman Sachs executive was quoted in yesterday's front-page Post story, "[Blankfein] wants to make sure we're not being seen living high on the hog." A Goldman Sachs rep did not respond to requests for comment left at the offices of both Lloyd Blankfein and Richard Friedman."

I'd love to have been privy to the ensuing telephone conversations between Mr. and Mrs. B this morning.