The Wall Street Tattler

Gordon C. Stewart               March 15, 2012

How could he do this? Is Greg Smith a tattler? Or, perhaps, Judas?

How could one of Wall Street’s own go to the New York Times (“Why I am leaving Goldman Sachs”) to publicly denounce the company’s culture?  “He just took a howitzer and blew the entire firm away,” said Larry Doyle of Greenwich Investment Management.“ (“Wall Street Exec Quits with Public Broadside).

According to the LA Times article, Goldman Sachs’ CEO Lloyd Blankfein suggests that Mr. Smith – Golman’s executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.- is a “disgruntled employee.” William Cohan, author of Money and Power: How Goldman Sachs Came to Rule the World, says that “there are lots of disgruntled people who leave Wall Street, and they don’t do this” (i.e. open their mouths.) “What I’m hearing (on Wall Street),” said Cohan, “is sour grapes. You just pigged out at the trough for 12 years and you don’t have enough sense to keep your mouth shut.” (underlining mine)

Keeping one’s mouth shut is the name of the game on Wall Street.

Conscience may have its place so long as you keep it to yourself. You can have a conscience on Wall Street, just don’t exercise it. You’re part of an elite gang. Whether on the Street corners of impoverished neighborhoods like Watts in LA and Bedford-Styvesant in NYC, or in the center of crony capitalism that is Wall Street, gang members don’t rat on other gang members. If you don’t like it, swallow hard and keep your mouth shut.

Goldman’s rebuttal to Mr. Smith’s statement -“It makes me ill how callously people talk about ripping off their clients,” referring to their own clients as Muppets – hardly has the ring of strong denial. “We disagree with the views expressed, which we don’t think reflect the way we run our business.”

Hmmm. “…don’t think…”? Why not “don’t”?

It’s a rare thing for a spokesperson for a corporation with the best legal counsel in the world to say anything than a flat-out denial. “We don’t think” sets up the issue as a matter of perception, not fact. It’s Goldman’s perceptions of itself versus Mr. Smith’s disgruntled perception.

Mr. Smith’s refusal to live by the Wall Street gang code of conduct will lead to a barrage of attacks on his character calculated to divert the public’s attention from an institution that eats people’s investments and life savings to the Judas who is without integrity.

Goldman understands that for most of us the world is personal, not institutional. We don’t like tattlers and turn-coats, disgruntled employees who never learned the lesson of kindergarten that you never tattle on your friends. You don’t go running home to tell momma. Part of the code of the playground is not to tell.

What’s even more unusual in this case is that Greg Smith dealt in derivatives. Remember them? Derivatives – a complicated form of financial market gambling so convoluted that even the people who manage them can’t explain how they work – were at the center of the Wall Street meltdown in 2008. They were legal then. They are legal now. Goldman Sachs and the rest of the Wall Street gang of crony capitalism are still calling the shots with the highest paid Washington lobbyists money can buy.

Greg Smith is a Wall Street Judas who betrayed his gang not with a kiss but with a howitzer.

How could he do this? Why didn’t the guy who ate at the pig trough for 12 years just kiss and say good-bye? Why did he make his money and then break the code?  Unless…unless…unlike so many of those who were taught not to tattle, Greg Smith couldn’t live with himself and decided not to run home to tell momma but to run to the New York Times. He’ll never again be allowed on the playground.

A Journey of Faith into Economics

 – Gordon C. Stewart Feb. 12, 2012

North Philadelphia street scene

Where I grew up Karl Marx was the enemy of all that was good and true. The United States and the Soviet Union were in a dead heat in the Cold War between the Christian and capitalist West, and the atheistic, Communist East. In elementary school we dove under our desks during air raid drills to prepare us for the atomic bomb that would be dropped on Broomall, Pennsylvania, population 1,000. We began the school day reciting the Pledge of Allegiance – “one nation under God” – and a prayer that asked for God’s blessing. In World War II our fathers had beaten back the evil of Nazism. Now, evil was threatening once again from fascism’s opposite, godless Communism. It was either us or them.

It took a while before I asked about the coupling of Christian faith and capitalism or read Marx himself. To read him or to entertain the idea of a classless society was heretical treason, or treasonable heresy. Church and nation were two sides of the same thing. But the more I recited the Pledge of Allegiance, went to worship and youth group,  and became acquainted with the poverty of north Philadelphia, I began to realize that “freedom and justice for all” was, at best, an aspiration, not a fact.  At worst, it was a compelling myth that allowed us to think of ourselves as the chosen whose job was to eliminate evil from a fallen world.

Two summers working as a street worker for the Presbytery of Philadelphia in the poorest neighborhoods rattled my world and shook me to my knees. Every Monday through Friday during the summers of 1961 and ’62, I traveled an hour-and-a-half by bus and subway from my suburban home in Broomall to north Philadelphia and back trying to make some sense of these two very different worlds. How and why did they exist – one white; one black? One materially satisfied; one not? Martin Luther King, Jr. and the civil rights movement were answering that it was because of  the politics and economics of white privilege.

When I read the work of Willem Zuurdeeg, a Dutch philosopher of religion who grew up as part of the underground resistance during World War II, I found the philosophical mind that looked below the surface to the deeper convictions that hold our hearts and minds captive. The rest of the story is too long to tell.

Capitalism, like Communism, is an idol manufactured by the human heart, one of the convictions, often unexamined, that vie for our worship and allegiance. No economic system is now, or ever will be, perfect. Its efficacy and utility are to be judged by what it does to the people who live under its mindset and institutions.  Today, I hear strident voices that sound like the voice of the late Senator Joe McCarthy who turned over the tables looking for America’s internal enemies. I would like it to be said when I am gone that I honored the memories of Edward R. Murrow whose courageous reporting exposed McCarthyism, and of Joseph Walsh, the attorney for the Army who spoke aloud the words that brought an end to the power of the McCarthy Hearings to destroy decent, dissenting American citizens: “Have you no decency, Sir? Have you no decency left?”

Ours is a later time. The issues of our day are complex. But underneath the debates, the “us against them” mindset of World War II and the Cold War is no less alive than it was then. However and wherever McCarthy’s eyes flash while his finger points and his voice rises again, those of us who hear a Deeper Voice must not be silent. The Deeper Voice is the “still small Voice” of conscience and dissent.