Finley Peter Dunne, a newspaperman and cartoonist in 19th century Chicago, described the duties of a newspaper in a way that eventually would become journalism creed. A paper “comforts th’ afflicted, afflicts th’ comfortable,” he wrote. Well, now that his career in investment banking is over, we think Greg Smith should seriously consider dabbling in journalism, as he has proven himself a pro at afflicting Goldman Sachs.
Bloomberg News reported this morning that after yesterday’s incendiary resignation letter went viral (and spawned a number of parodies, in true internet fashion), Goldman Sachs shares dropped by 3.4 percent, translating to a $2.15 billion loss in market value. The Atlantic Wire did some math and figured out that, on average, each word Smith wrote in his 1,283-word op-ed for the New York Times cost the firm $1.675 million.
Deploring what Smith felt was the firm’s moral bankruptcy, he revealed some embarrassing information about the way money-hungry managing directors deal with their clients, most notably sharing that managers called clients “muppets” over internal email. This also comes two years after Goldman settled a mortgage fraud lawsuit with with the Securities and Exchange Commission for $550 million. “I hope this can be a wake-up call to the board of directors,” Smith wrote.
In a letter to employees, Lloyd C. Blankfein and Gary Cohn, the firm’s top two executives, shrugged off Smith’s words as a matter of lonely opinion:
“We were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients. Everyone is entitled to his or her opinion. But it is unfortunate that an individual opinion about Goldman Sachs is amplified in a newspaper and speaks louder than the regular, detailed and intensive feedback you have provided the firm and independent, public surveys of workplace environments.” [NYTimes]
It was an opinion, however, that translated into dollars. Maybe Goldman’s feeling like the muppet now.
You can follow Sydney Brownstone on Twitter @sydbrownstone