Michael Lewis slams Goldman Sachs

Michael Lewis, of Liar's Poker and The Big Short fame, has some dismaying words for Goldman Sachs (NYSE: GS) in an interview with Vanity Fair.

"The world would be better off without Goldman Sachs, and I don't think it is just Goldman Sachs the world would better off without. If you waved a wand and wiped out Goldman Sachs, someone would step in and occupy that place. I think the world would be better off without the idea that Goldman Sachs embodies, which is that financial manipulation is a legitimate way to get really rich," says Lewis.

He goes on: "I would say the beginning of the end of the Goldman Sachs I admired was when it ceased to be a partnership. The minute it becomes a public corporation there is this moral justification for bad behavior."

"By saying, 'we are doing it for our shareholders,' you have an excuse to do shitty things to people and do things that are bad for the world," Lewis told Vanity Fair. "Your job then requires you to generate profits by doing anything short of breaking the law so that you can maximize returns to your shareholders. This is a very dangerous financial attitude."

This really is an issue with all companies. I recall Jeff Skilling saying something to the effect that his only moral duty was to get the stock up. But the governance structure of the U.S. is not going to change. So Lewis raises an apt question, one with no obvious answer. Obviously, we cannot rely simply on the moral nature of man.

For more:
- here's the article

Related Articles:
Michael Lewis: The absurdity of Wall Street, the end of Goldman Sachs  
Wow! A riveting look at an unorthodox fund manager
Financial crisis, the movie version
Fund manager was right about Madoff

Post a comment