The Vices and Virtue of Goldman Sachs
Goldman Sachs has been recently labeled as a “giant vampire squid wrapped around the face of humanity” by Rolling Stone writer Matt Taibbi. All of a sudden, Goldman Sachs has become the pinnacle of greed and corruption in the eye of the public.
For those in the financial industry, an internship or job at Goldman Sachs is one of the most coveted positions possible. It is the stamp of approval; the nod from the “Wallstreeters.” And although I am only a rising sophomore and tentatively taking steps into the world of internship searches, by the third business club meeting I attended freshman year, I already knew that an internship at Goldman Sachs was Willy Wonka’s golden ticket in the business world.
While it is true that both the U.S. Treasury Department and the U.S. Federal Reserve Bank have had long-standing relationships with Goldman Sachs, that relationship should be a sign of the integrity and ability of Goldman employees as opposed to a cause for suspicion. Furthermore, Goldman’s internship selection process is highly intensive — taking on average of 1100 interns a year, mostly culled and picked from the top colleges and MBA programs. Over 80% of the interns choose to accept full-time job offers. It is therefore no surprise that Goldman Sachs may also serve as the training ground from which the government may select (or self-select) their leaders.
Having spoken to a few people who have either interned at Goldman Sachs or had interactions with the firm, many have specifically noted the work ethic and intelligence of the employees, which goes hand-in-hand with the company’s unique work culture that promotes the firm over the employee. Not to mention, Goldman’s hierarchy is flat and the company encourages a merit-based system of advancement. And while there definitely is cutthroat competition, as a whole, Goldman Sachs’s community is more tight-knit and intimate than many other Wall Street organizations. This is reinforced by connections alumni maintain with their former coworkers, a practice which has also been a target for criticism.
The journey to becoming a partner at Goldman Sachs is arduous — simply being from an Ivy League or top business school is not enough. One must also demonstrate an inhuman passion and dedication to work. During the application process to become a new associate, an applicant must undergo at least two rounds of interviews, and they should often expect a third round that is more technical than the first two. As described on Goldman Sach’s own website, an offer for a position at the firm is a “key pipeline for leadership positions.” Arguably, leadership skills developed at Goldman contribute to the high representation of alums in government.
While I can not say with certainty that the interests of Goldman Sachs do not ever cross the minds of their alumni who hold government positions, to concoct a conspiracy theory like Taibbi has done seems too extreme. Taibbi listed all of the alumni of Sachs who later held positions in the government and questioned the integrity of their actions with claims such as, “As George Bush’s last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street.” It might be difficult to defend these individuals if they did take advantage of back-door openings and unwholesome nepotism. However, we cannot condemn Goldman Sachs as an entity simply because of its alumni. It could be further argued that a slew of such questionable alumni could put the integrity of Goldman Sachs in question. But I believe that these alumni are more products of the vices of Wall Street than the vices of Goldman Sachs in particular.
Goldman Sachs is not flawless — it is an institution where moneymaking is the ultimate objective. Some past interns have admitted that even “conversations reek of money.” However, as one of the foremost powerfirms on Wall Street, it is not surprising that Goldman Sachs is also susceptible to the vices of the financial world. While the monetary-driven interest of the firm may at times be excessive, it is difficult, if not impossible, to function in Wall Street without being so intrinsically bound to money.
By not recognizing the firm for its efficiency and not acknowledging certain commendable characteristics of its culture, Taibbi is maligning the firm that others should potentially learn from.