Lots of people are talking about what is happening at Goldman Sachs. This is a column about what is not happening at Goldman.
Despite all the bad headlines — the accusations of fraud, the talk of a big settlement, the risk, however remote, of criminal charges — there’s an inconvenient truth that’s been largely ignored: Most of Goldman’s big customers are not bolting.
To the contrary, nearly all of them are standing by Goldman, despite come-hither looks from Goldman’s rivals.
What gives? To many people, Goldman has become America’s most reviled engine of capitalism. Even now, as thousands of barrels of oil gush into the Gulf of Mexico every day, people think less of Goldman than they do of BP, according to the BrandIndex daily survey of consumer perceptions conducted by YouGov.
Postcrisis, Goldman has gained a reputation as, in the felicitous phrase of Rolling Stone, the Great Vampire Squid — accused of duping its clients, of stonewalling investigators, of betting against entire economies. By its own admission, Goldman seeks to manage conflicts rather than avoid them.
For its part, Goldman keeps insisting that it plays fair. To which its critics say, come on. Are you really sticking to that story, after all the public outrage? Who do you think believes you?
As unsatisfying as this may be to the firm’s detractors, the people who seem to believe in Goldman are the ones who pay its bills.
“We trust them,” Jeffrey R. Immelt, the chief executive of General Electric, told an audience at the 92nd Street Y in New York last month. “People need to tone down the rhetoric around financial services and stop the populism and be adults.”
In recent weeks, BP went looking for advisers to help it think through the liabilities of the spill. Considering BP’s own public relations problems, you might think it would stay far away from Goldman. But no, Goldman is now one of those advisers. (Goldman, it should be noted, happens to also be an adviser to the New York Times Company.)
All of this may have you questioning why the public is so outraged — ostensibly on behalf of wronged Goldman clients — when many of the clients themselves seem unconcerned.
Revelations about Goldman’s business practices have raised important questions about the social utility of many products that are sold on Wall Street and the need for stronger oversight. What is unknown is whether Goldman is losing prospective clients. It will be interesting to see what happens to its market share over the next couple of months, as the various government investigations unfold.
But the widely accepted narrative that Goldman almost single-handedly caused the financial crisis, that it is somehow worse than firms that failed like Lehman Brothers and that it consistently undermines its clients at every turn, doesn’t seem to square with its own clients’ perception of the firm.