A Comment on "Why I Left Goldman Sachs"

There have been many attacks from the financial media crowd on Greg Smith's new book, Why I Left Goldman Sachs.

Smith is the former GS employee who wrote an op-ed for the New York Times announcing he was quitting because GS was morally corrupt. The book contract followed.

Many expected the book to be a major expose of GS, and now that it turns out not to be, the critics are ferocious.

But, Smith was a minor low level player at GS, any scheming being done at GS was not being done    in front of him. Blankefein may have paraded naked in front of Smith, as he tells us, but Smith would never be exposed to elitist plotting:

My one other experience with a Goldman CEO in the gym was the time I saw Lloyd [Blankfein] "air-drying," that is, walking around the changing room au naturel to dry off from his shower. But this was not uncommon among a generation slightly older than me. I don't think it was a show of power.

Smith really had no clue as to what was really going on at the high levels of GS. Treasury Secretary Geithner, for example, is mentioned only once in the book, and then only in a passing commentary about Lehman Brothers. Fed Chairman Ben Bernanke is not mentioned in the book at all. GS as a primary dealer that can trade with the Federal Reserve, and the advantages that bestows on a firm, is not discussed.

In other words, the book is very insightful as to what mid- and lower-level GS employees understand about the relationship between government and GS, that allows GS to be the domineering firm it is. They understand nothing. And that's the way GS wants it to be, so that when books like this are written, the only stories that can be told are the nonsense stories about Blankfein prancing through the GS gym locker room naked.

The real story of GS and its relationship with the government, that allows it to thrive under all conditions, remains secret.