Politics
An Analysis of the Goldman Sachs Public Statements
Submitted by Aldon Hynes on Thu, 03/15/2012 - 21:15Yesterday, I wrote about the overarching issues of the resignation of Greg Smith from Goldman Sachs. I made a reference to crisis communications. While I recognize how difficult it must be to be in the communications department at Goldman right now, it does look like they really failed in their efforts to address Mr. Smith's concerns.
The message Lloyd C. Blankfein and Gary D. Cohn sent March 14, 2012 to the people of Goldman Sachs starts off
By now, many of you have read the submission in today’s New York Times by a former employee of the firm. Needless to say, 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.
They go on to talk about how Mr. Smith was just one voice out of 12,000 vice presidents and that a survey of staff found that 89% felt that they provided exceptional service to their clients.
Reading between the lines, 11% of the staff don't feel that their firm provides exceptional service to their clients. Doesn't that strike you as a bit high? The rest of the letter doesn't do much better.
So, let's put this into context. On the 13th, Bloomberg reported Goldman Sachs Hires Ex-Treasury Aide Siewert for Communications.
Siewert started working in New York as the global head of corporate communications, replacing Lucas van Praag, who is leaving after 12 years. (Curiously, the same amount of time that Greg Smith was at Goldman). Talk about an exciting way to start a new job.
The Bloomberg article goes on to say,
Goldman Sachs was viewed unfavorably by 54 percent of respondents in a Bloomberg survey of traders, investors and analysts conducted last May…
Goldman Sachs’s score was among the lowest in a recent study of corporate reputations, according to a Feb. 13 statement from Harris Interactive
That's a very different picture than the memo to employees painted.
After Mr. Smith's OpEd, Bloomberg posted an editorial, Yes, Mr. Smith, Goldman Sachs Is All About Making Money: View. The comments were overwhelmingly negative. The anonymous Bloomberg editors were painted as stuck in a false dichotomy. Either, you look out for the best interests of your clients, or you make money. In fact, businesses that don't look out for the best interests of their clients end up losing clients and going out of business.
The day after, there were reports about how Goldman stock had dropped 3.4% of its stock value, or $2.2 billion as a result of the disgruntled employee. Yet it picked up 2.2% to recover somewhat today. Others have written about what this may do to recruiting efforts for Goldman.
A statement from a Goldman Sachs spokesperson hits a better tone. In the Wall Street Journal's blog entry, Goldman Rejects Claims Made by Outgoing Executive we find:
“We disagree with the views expressed, which we don’t think reflect the way we run our business,” a Goldman spokeswoman said. “In our view, we will only be successful if our clients are successful. This fundamental truth lies at the heart of how we conduct ourselves.”
If Goldman had led with this, followed by comments about taking the accusations of Mr. Smith seriously and investigating them, they probably would have come out much better.
Yet the way news cycles go, this story will be soon enough forgotten and will fall into the background, until the next issue with Goldman comes up, and people return to this one.
Toxic Cynicism and Believers
Submitted by Aldon Hynes on Wed, 03/14/2012 - 21:24I remember when Liar's Poker came out. It was right about the time that I followed a friend from Lehman Brothers to Smith Barney. I was providing technical support to the mortgage traders and they were passing around the book. Several of them were in the book and every so often you would hear someone say something like, "Hey Steve, did you see what they said about you on page 298 of Liar's Poker?"
I never played Liar's Poker, but I had friends that did and I knew the rules and listened to many stories of great bond traders in the past.
Most of the folks I knew were good people. They worked hard, trying to use their wits to make a quick buck, but it always seemed like they knew right from wrong and at least had a rationalization of why what they were doing was a good thing. They were creating liquidity, making the markets more efficient, ultimately, making it easier for people to borrow and lend money at fair rates. I trusted most of them, and still believe that in most cases, that trust was well founded. Yet there were some that you just couldn't trust. They'd sell their sister if they could get an extra basis point or two.
All of this came back to me as I read the OpEd in the New York Times this morning by Greg Smith on why he was leaving Goldman Sachs. It rang true to me. It sounded like Greg was one of those believers, a very bright guy, who worked hard, made a lot of money, but became disgusted with what was going on around him. I can only imagine what was going on at Goldman Sachs today.
When my friend left Lehman Brothers, I was a consultant. I was called into one of the managing directors' offices with a couple of the big name players; names that came back to haunt many of us as the mortgage crisis unfolded. They wanted me to hear their side of the story, to understand that they were the good people, and for me to stay at Lehman. Then, my friend's name came across the newswire. A trader rushed into the office to inform them, and I heard a vile spew of vindictiveness that did little to convince me of their virtue.
I can easily imagine some vile streams at Goldman today. I can easily imagine the discussions in the corridors about the OpEd. And I can imagine what it must have been like in the communications department.
The first rule of crisis communications that I've heard repeated over and over again is when you find yourself in a crisis, stop digging and return to your mission statement. The problem for Goldman is that Greg Smith's OpEd hit directly at that mission statement. Investment banks, the story goes, should be making money by helping their clients, not by trying to take advantage of them.
I also have to wonder what went on before Mr. Smith wrote his OpEd. What brought about this aha moment? Was it something on the road to Damascus, or perhaps Zuccotti Park? Did he get a smaller bonus than he thought he deserved? Was he slighted in some other way? Did he try to negotiate, to let his former employers know that things might not turn out that well if they didn't accommodate him?
Yet, I also have to wonder, is this really about Goldman Sachs? Or is it about something bigger? Has cynicism become so rampant that people are beginning to say, "Enough!" and throw their TVs out the window? Are the battle lines of the culture wars beginning to shift from abortion and gay marriage, to love of money versus living for some higher ideal?
Yes, Mitt Romney is supposed to be a good Mormon, but his whole campaign reeks of a love of money that stinks with the toxicity of Goldman Sachs, Bain Capital, and so many other firms that have lost their sense of mission. While my values are very different than Rick Santorum's, I can see why people might be fleeing from Romney to Santorum.
Working in social media for non-profits, I get into a lot of interesting discussions, and this disillusionment with organizations losing sight of their mission isn't reserved for just large corporations. I've heard people lay that criticism at the Komen Foundation, willing to sacrifice their mission of fighting breast cancer to appease one set or another of potential donors. I've heard people talk about other organizations getting too caught up in themselves to remember their mission.
I continue to think about the history of Great Awakenings in America. Are we on a verge of another great awakening, where people return to focusing on making the world around them a better place, instead of simply making a quick buck?
A couple quotes come to mind as I think about this. First is Mufasa's ghost in the Lion King, "You have forgotten who you are and so have forgotten me. Look inside yourself, Simba. You are more than what you have become. You must take your place in the Circle of Life."
The other is from Woodstock,
And we've got to get ourselves
Back to the garden
None of Them Look Sick
Submitted by Aldon Hynes on Mon, 02/13/2012 - 20:21According to an article in the CT Mirror last week, Connecticut Governor Dannel Malloy commented about a bunch of people demonstrating in favor of the legalization of medical marijuana in the state, "None of the look sick".
The article describes says he was joking, but something about it really bothered me. Earlier that day, I had been at the dentist. There was an older man sitting in the waiting room while his wife had her teeth cleaned. He didn't look sick either. However, he was talking with the folks in the office about his battle with cancer, and whether he would make it.
My mind wandered to a friend who has a small bump on the side of his neck. He doesn't look sick either, and he thought the lesion he had on the side of his neck was from shaving and not a Basel cell carcinoma. In fact one of the reasons that early detection programs for various types of cancer are important is that by the time the person looks or feels sick, the cancer is already very far advanced.
Then, there are the reports of when someone with a mental illness snaps and shoots up a neighborhood or commits some other horrific act. Everyone always says, "but he seemed like a normal guy".
For those who are suffering from many forms of chronic illnesses, unless you look closely you may never notice the symptoms of the chronic illness. In fact, people with chronic illnesses often try hard to look as normal as possible in hopes of avoid both pity and predators.
Look online. When people post on Facebook, they'll spend a lot of time talking about things that are going well. They'll have their pictures of their pink drink cocktails on Friday night, or the big red plastic cup filled from the keg at the party on Saturday night. Yes, they might gripe about insensitive partners or other more socially acceptable complaints, but they're unlikely to talk about their real struggles. That is kept for behind closed doors.
So, no. None of the people demonstrating in favor of the legalization of medical marijuana looked sick to our Governor. Unless we get to know who they are and gain their confidence, we will never know what, if any, ailments afflict them. But that's not really the point.
Years ago, I spoke with some advocates for people with disabilities. They spoke about 'TAB's; temporarily able bodied people. It is an important perspective to have. Just because were currently able bodied doesn't mean that one day we won't be disabled, or fighting a chronic illness.
No, we should all keep in mind that those around us may be suffering and may not be showing it and we, ourselves, may have our turn at suffering soon enough. So, we should shy away from trite over simplistic comments like "None of them look sick".
The Hermeneutics of Political Gardening
Submitted by Aldon Hynes on Sat, 02/11/2012 - 20:01Inch by inch, row by row
Gonna make this garden grow
The words of David Mallett plays on Spotify as I read a section of Hans-Georg Gadamer's 'Truth and Method' about the circular structure of understanding. I started thinking about text criticism of the news stories Google presents to me. Yes, the great Internet filter bubble shapes what I see. 'In Maine, Ron Paul vies to extend Mitt Romney losing streak', 'General gunned down in Damascus', 'Funeral for Powell boys draws 1000-plus in Tacoma, Wash.', 'Romney wins straw poll of Republican conservatives', 'Weak housing has hurt consumer spending', and 'Obama and the birth control controversy'.
What is the context we understand these stories in? How might other people understand these stories, say a century from now as the study the early 21st century in a college history class. How might my ancestors, for example, those that farmed in New Brunswick, Canada after the revolutionary war, understand this.
Pullin' weeds and pickin' stones
We are made of dreams and bones
David Mallett's words drift back in. What is this circular structure of understanding? How does it relate to pullin' weeds and pickin' stones? People have often asked me who aspiring bloggers should read. I usually suggest starting with the essays of E. B. White. His ability to relate his experiences repairing a hen house roof on a saltwater farm in Maine to European politics at the beginning of World War II is remarkable.
Is there something about this circular structure of understanding that relates to current political discourse? It seems as if so much of the political discourse is based on fairly narrow circles of understanding.
For example, in the birth control controversy, Rick Santorum describes birth control as 'something that costs just a few dollars'. Now, if you are using condoms that you buy at a discount in bulk, or perhaps pick up from a free clinic, and only have sex a couple times a month, Santorum may be right, however, the most commonly prescribed birth control pill costs between $100 and $200, depending on where you get it.
Now for someone with a net worth of between $800,000 and $1.9 million, like Rick Santorum, a couple hundred bucks a month might not be a big deal. Yet there are communities here in Connecticut where the media household income is closer to $12,000 a year. A couple hundred bucks a month can be ten to twenty percent of the household income, and perhaps, these are the households that would benefit most from birth control.
Yet all of this brings me back to the filters or bubbles we all live in. We find our views shaped by the media we consume, whether it be the news that Google selects for us, the talking heads on cable news, the inside the beltway advisors, or even our view of what American life is like based on what we see in the backgrounds of sit-coms and police dramas on prime time television.
No wonder there is such divide and rancor in politics today. Maybe it is time to get back to the garden, whether it be the one that Mallett sings about or White writes about.
Deconstructing Half Time in America
Submitted by Aldon Hynes on Mon, 02/06/2012 - 21:15My initial reaction when I saw the beginning of the 'Half Time in America' advertisement was to wonder if it was a political advertisement. It seems like a lot of people are still wondering about that. And, while the people behind the advertisement are claiming it was not intended to be political, the people behind the Susan G. Komen decision about Planned Parenthood made similar assertions. In fact, anything related to hot button topics, like abortion or the auto industry will be viewed as political. When you get right down to it, perhaps, everything is political.
So, instead of focusing on a somewhat meaningless discussion of whether or not something is political, it makes more sense to try and understand the underlying messages. The Chrysler certainly had underlying themes that are more inline with President Obama than with his challengers. The American hope, of getting right back up, a hope that Obama used very effectively in his 2008 campaign came through. The idea of working together comes through. Of course that all working together may sound like socialism to some, probably to some of the same people that oppose Government bailouts.
Looking more closely, it seemed like there were other signs in the ad. Clint Eastwood, a Republican, famously quoted by Reagan, "Go ahead, make my day". Reagan is also evoked in the title of the advertisement, "Half Time in America", echoing Reagan's 1984 re-election advertisement "Morning in America".
In the middle of the advertisement there are several black and white photographs, which made me think of Walker Evans depression era photographs in Let Us Now Praise Famous Men.
Like it, or hate it, Half Time in America is an advertisement worth thinking about, talking about and deconstructing. And, that, unlike so many of the ads which try to appeal to our interest in puppies, humor, or sex, but have little worth thinking about, is worth noting.