- Matt Taibbicontributing editor for Rolling Stone. He is the author of five books, most recently, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. His latest article in Rolling Stone is titled “Bank of America: Too Crooked to Fail.”
Financial reporter Matt Taibbi talks about Goldman Sach’s history of denigrating its own clients, as recently highlighted by former Goldman executive Greg Smith’s explosive resignation letter in the New York Times. Decrying what he called Goldman’s “toxic” culture, Smith said bosses at the firm called their clients “muppets” and strove to maximize profits at the expense of client interests, adding: “It makes me ill how callously people talk about ripping their clients off.” Goldman Sachs is now reportedly scanning internal emails for the term “muppet” and other evidence that employees referred to clients in derogatory ways. “This gives … people in the industry, institutional investors, tremendous pause: why would I want to do business with this company if this is their attitude towards me?” says Taibbi. “They’re thinking how much can they get out of me, and not how much money they can make for me.” [includes rush transcript]
AMY GOODMAN: I want to go to the whole issue of Goldman Sachs now.
MATT TAIBBI: Sure.
AMY GOODMAN: The bank reportedly scanning internal emails for the term “muppet” and other evidence that employees referred to clients in derogatory ways. The decision was made after a Goldman executive named Greg Smith resigned last week and penned an explosive article about Goldman Sachs, an op-ed piece for the New York Times. Smith wrote, quote, “It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as 'muppets.'” He said Goldman had become, quote, “as toxic and destructive as I have ever seen it.” He talks about them talking about ripping the eyes out of their muppets.
MATT TAIBBI: Mm-hmm. Mm-hmm.
AMY GOODMAN: So, talk about the significance of Glenn Smith’s—of Greg Smith’s both resignation and what this means.
MATT TAIBBI: Well, first of all, there are a lot of people who are saying this guy is a disgruntled employee, he’s got an ax to grind, so maybe he’s making all this stuff up. Everything that he said has—essentially, has already been confirmed in public documentation. There was a report by the Senator Levin a couple years ago where—they didn’t say “muppets,” but there was a—they have internal emails where we saw Goldman employees saying, “We found a company that was so stupid to buy our product that they’re a flying pig, a white elephant and a unicorn all at once.” They actually used that kind of terminology. So this history of them denigrating their own clients and celebrating ripping them off is already demonstrated, way before Greg Smith. But the significance of it is that it’s somebody from the company. And this gives, I think, people in the industry, institutional investors, tremendous pause: why would I want to do business with this company if this is their attitude towards me? They’re thinking how much can they get out of me, and not how much money they can make for me. That’s the problem.
JUAN GONZALEZ: I was troubled, however, when I read that op-ed piece that Smith almost seemed to be saying that at one time Goldman Sachs was an ethical company, and in recent years it’s had a shift, as if almost the current CEO and the current leadership was responsible for the problem. It seems to me it’s a little naïve to think that there was a golden era when Goldman Sachs was really a great—a great financial institution.
MATT TAIBBI: I’m sure Goldman was always a ruthless company. And definitely, if you go back to the '20s, they had a big part—you know, John Kenneth Galbraith writes about this in his book, The Great Crash, Goldman's role in the speculative boom that led to the Depression. But to give them credit, there was a time—and I knew people who worked at Goldman when I lived in Russia, and they had this credo in the company, which was “long-term greedy.” In other words, we want to make money, but we want to make money for the long term. And I think that changed somewhere in the early ’90s to the early part of the last decade. They started grabbing the quick buck and gouging their clients, instead of looking for the long term.
AMY GOODMAN: And very quickly—we only have about 30 seconds—Goldman’s involvement in speculating on gas, gas prices?
MATT TAIBBI: Well, Goldman is the leading commodities—they have their—Goldman Sachs Commodities Index is the—is where everybody goes to speculate on commodities. So they’ve always been a leader in pushing up commodities booms, like in 2008 when the oil went to $149. Goldman always has a central role in that, them and Morgan Stanley. So, yes, whenever you see a big bump in gas prices, always look to those two banks.
AMY GOODMAN: Well, I want to thank you very much, Matt Taibbi, contributing editor fro Rolling Stone, author of five books, most recently, Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America. His latest piece is in Rolling Stone; it’s called “Bank of America: Too Crooked to Fail.”
When we come back, we’re going to Orlando, Florida, to speak with the NAACP president, Ben Jealous, about Trayvon Martin and the killer who is still free. Stay with us.