Goldman Sachs v. BusinessWeek

I picked up the current issue of Bloomberg BusinessWeek tonight and looked at the cover – a grim looking montage of the Goldman Sachs logo full of holes, coming out of a bunker, with the headline, “It wasn’t our fault, really.” Ooh, I thought, this is going to be good. And boy was I right. It’s a page turner looking at the most serious accusations leveled against the firm, and their response to them. The whole thing is worth a read.

But as I read it, I wondered about the strategy of engagement and what feels to be a missing direct view from the company.  After all, they have been pretty quiet in the media, not commenting, not talking, taking its lumps and moving on. Why come out of the bunker now, especially when the context is going to be pretty tough? And why be defined by someone else? As in:

Among the general public, however, the perception is that Goldman is the toxic epicenter of everything wrong with Wall Street. The firm’s 32,000 employees are seen as an army of Gordon Gekkos, greedy manipulators who pumped up the housing bubble, then bet opportunistically on its implosion as American International Group (AIG), its trading partner, buckled under massive debts. It is widely alleged—though unproven—that Goldman called on its close friends in government to arrange for an AIG bailout, effectively pocketing billions of taxpayer dollars. "Every game has a sucker," says William K. Black, a professor of law and economics at the University of Missouri at Kansas City who was deputy director of the Federal Savings & Loan Insurance Corp., "and in this case, the sucker was not so much AIG as it was the U.S. government and taxpayer."

Whoa. Pretty much anything good that comes after that bit, and there is some, is a bandage on a pretty black eye.

The article notes that on April 7 the company will release its annual report, with a full defense of its conduct during the mortgage bubble and subsequent collapse. In the world we are living in, where companies and individual have access to perhaps the biggest virtual printing press and megaphone (the web) ever seen, I think it is critical to communicate directly and indirectly at pretty much the same time. I have not yet seen the Goldman report, but I have to believe they do a better job in that document of defending themselves and putting decisions into context than came across in the BusinessWeek article. And with a virtually limitless amount of space they can provide as much information and data as they care to, depth for those who like depth, recap for those who don’t.

BusinessWeek did a good job with this article. It’s well written, entertaining, and I think is pretty balanced. That’s good journalism. But constrained by space and resources, there are pieces of the story left untold – and the place I looked to for the rest of the story was still silent. That’s a miss.

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