Louis Proyect: The Unrepentant Marxist

March 27, 2009

Working at Goldman-Sachs

Filed under: financial crisis,workers — louisproyect @ 6:38 pm

If you’ve been following the news about Wall Street, you’ll know that American taxpayers have funneled 13 billion dollars into Goldman-Sachs via AIG. Along with some other major financial institutions, Goldman received 100 percent of the value of the insurance they took out on their risky securitized real estate bets. Meanwhile Goldman states that they intend to pay back the 10 billion dollars they received in TARP funds since they don’t want anything to interfere with the obscene salaries and bonuses they hand out to their top executives.

Next to AIG, Goldman has borne the brunt of populist fury. This week Tim Geithner was pressed by Maxine Waters on whether former employees of Goldman-Sachs now ensconced in the Obama administration help explain an apparent tilt toward the Wall Street giant.


Thomas Edsall, the political editor at Huffington Post, dealt with the same issues in an article titled “AIG Bonus Bombshell Raises New Questions about Goldman Sachs“. He writes:

The roots of the linkage between Goldman Sachs and AIG go back to the closing months of the Bush administration, as the financial meltdown reached crisis proportions and key decisions were made that are now reaping the whirlwind. Remember who played a key role in deciding to bail out AIG? Henry Paulson, the Goldman CEO-turned George W. Bush Treasury Secretary. Paulson, according to a September 27, 2008 New York Times piece by Gretchen Morgenson, led a team of regulators and bankers in early September to determine what to do with the most severely wounded financial institutions.

One of the participants in those meetings was Lloyd C. Blankfein, Paulson’s successor at Goldman Sachs.

Out of those meetings came the controversial and heavily criticized decision to allow Lehman Brothers, a Goldman competitor, to go belly up, and to bail out AIG. Starting with $85 billion from the Fed, taxpayers have pumped a total of $170 billion into the giant insurance company. The bailout was crucial to Goldman in that it permitted AIG to pay off its $12.6 billion debt to the firm, $8.1 billion of which was to cover AIG-backed credit derivatives.

Although I am happy to see Thomas Edsall and Maxine Waters scandalize Goldman-Sachs in this fashion, I must differentiate myself from their conspiracy-mongering. I doubt that Robert Rubin, Neel Kashkari or Mark Patterson have Goldman’s private interest in mind when they advise Obama to approve some plan that benefits their former employer. I take them at their word that they only have the country’s interest in mind for they most assuredly believe that-to paraphrase an old bromide-what’s good for Goldman-Sachs is good for America.

As many of you know from previous postings here, I was an employee of Goldman-Sachs from 1986 to 1988. It was my last full-time position before I began working at Columbia University in August, 1991. Although I tried to keep my distance from the corporate culture there, I did succumb to some extent. It was a time of deep illusions in the superiority and invincibility of the capitalist system and Goldman encouraged such illusions in much the same way that the Vatican fosters illusions in Jesus Christ’s divinity.

I had quit my job as a database administrator at Memorial-Sloan Kettering, a prestigious cancer hospital, earlier that year in order to work in Nicaragua, but was persuaded to remain in New York in order to help develop Tecnica, the volunteer program that was absorbing all my energies back then.

I began work at Goldman as a consultant. They had hired a huge number of new employees and consultants like me in order to migrate from their Burroughs mainframe applications to new systems on IBM that utilized a database management system called IDMS that I had expertise in. My job was to provide technical specifications for the Account subsystem, which along with the Security and Trading subsystems would provide the infrastructure for a number of other systems.

After working there for a few months, the project manager I reported to called me into his office and offered me a full-time position, which I gratefully accepted. With a yearly bonus of about 18 percent and a retirement plan that Goldman made contributions to the tune of 15 percent or so of my salary, there was no arguing with the material incentives. Since it would turn out to be a shitty place to work, these material incentives amounted to what many employees called “the golden handcuffs”, a term I first heard at Salomon Brothers in 1975, my last job with another self-regarding Jewish-owned investment bank.

John L. Weinberg

In 1986 Goldman was run by John L. Weinberg, who was an elder statesmen of the investment banking community just like Billy Salomon-my boss at Salomon Brothers. This was at a time when such firms were much more paternalistically benevolent than they are today. When you went to work for Goldman-Sachs, you were guaranteed a job for life unless you got into the habit of drinking whiskey from a bottle in your desk. Weinberg, who died in 1986, was clearly an “old school” type banker who probably would have been leery of hedge funds and derivatives. The NY Times obit noted:

A former marine who saw combat during World War II, Mr. Weinberg had a blunt, unpretentious manner. His style, like his disposition, was unadorned. He kept his hair closely cropped and wore off-the-rack suits and socks that hung a bit too low. He was also known for his earthy maxims, many of them aimed to deflate the ballooning egos of his bankers.

A relationship banker of the old style, Mr. Weinberg’s chief talent was his ability to gain entree to the boardrooms of America’s most blue-chip companies, from Ford Motor, to General Electric to DuPont, a trait that he inherited from his father, Sidney J. Weinberg, who led Goldman Sachs from 1930 to 1969 and in many ways defined the art of relationship banking on Wall Street. Mr. Weinberg’s son, John S. Weinberg, who is 49 and is currently co-head of investment banking, has carried on the family tradition.

Sidney Weinberg

Sidney Weinberg, along with fellow Jewish financier Bernard Baruch, advised FDR how to save the capitalist system. Not long after the 1987 stock market crash, Studs Terkel reflected on how overwhelmed Weinberg was by the earlier crash:

AS we hear the wise men of Wall Street – confused, befuddled, lost – the image of Sidney Weinberg is evoked, a senior partner of Goldman, Sachs during the 30’s and 40’s. He was an adviser to presidents, including Roosevelt, Truman and Johnson. Remembering the crash of ’29, he said, ”We were confused, befuddled and lost. We waited for an announcement.”

I hadn’t the heart to ask him, ”From whom? If you guys don’t know, who does?”

I suppose what most astonishes me, as we read of the wise men and their pronouncements in the year 1987, is the absence of any reference to ghost towns, i.e. Youngstown, Ohio; to fourth-generation farmers being foreclosed; to a record-busting number of homeless; to freight trains more crowded today than even in the time of Woody Guthrie. It is as though Wall Street were on some other planet.

The parallels of today and ’29 are astonishing. Yet it appears that we, and certainly our wise men of finance, have learned absolutely zero. If anything, we may be slightly worse off now than then. Our President blithely announced all was well. He was Alfred E. Neuman in the flesh – ”What, me worry?” At least Herbert Hoover’s brow was furrowed.

If Studs were alive today, I wonder what he’d have to say about yet another crash-one that more closely paralleled 1929 than the 1987 events. As a sign of the times, the Goldman ex-employees now calling the shots would claim both omniscience and omnipotence unlike Sidney Weinberg’s admission that he did not know what the hell is going on. Of course, there is some doubt that today’s crop of advisers know anything more than Weinberg did, contrary to their bravado.

Not long after becoming an employee and transferred into the elite database administration group, I found myself adapting chameleon-like to my environment. Not that I walked around telling people how great Adam Smith was. It was more a function of trying to appear more “Goldman” than necessary. While most computer programmers were happy to come to work in a Members Only windbreaker, I had to go out and spend my nearly hard-earned money on Paul Stuart clothing, the standard issue for Wall Street yuppies. I even went out and bought a Mount Blanc pen but stopped short of getting a Rolex watch, which would have completed the idiotic uniform. After taking a job with Columbia University, the first thing I did was bring the suits, ties, and shoes to a Goodwill thrift shop in the neighborhood. I held on to the pen, but never use it since the stupid refills cost twice as much as a brand-new Papermate.

I even went as far as putting gel in my hair. God knows who I was trying to look like. Gordon Gekko in Oliver Stone’s “Wall Street”. I got a chuckle, by the way, the other week from “The Conchords”, the dry-as-a-bone musical comedy series on HBO about two New Zealand folk-rock musicians trying to make it in New York. Their manager tells them to start using gel in order to make themselves look cooler. They become addicted to it after a while and fight over the last drops in a jar like two junkies fighting over some crack. Nowadays I wear my hair in a buzz cut, something I should have done decades ago. With all the stuff needing my attention, why should I spend time with a fucking hair dryer in the morning?

I never quite fit in at Goldman. Leaving aside my radical politics, I refused to work 60 hours a week like everybody else. By the time I got there, I had already logged 18 years in the computer programming business and had worked more overtime than the average Goldman programmer had worked in total. When I walked out the door at 5pm, people used to glare at me. After going though that kind of peer pressure in the SWP for not going into industry, I was just not ready to follow any herd anywhere.

It was my boss Vivian Schneck who glared at me the hardest. She was an orthodox Jew who probably resented my anti-Zionist politics even though the subject never came up. She had little use for my lackadaisical behavior, even though my expertise in IDMS was second to none in the department. Eventually my apathy about my job was what did me in. One Saturday I went in to perform some maintenance on the commodities database but omitted a step that had serious consequences on Monday morning. The commodities database was offline due to my neglect, and even worse the foreign exchange database was made unavailable as well. Don’t ask me to explain. It is too complicated.

When I came in, the higher ups in the department were scrambling around trying to bring the two databases up. Foreign exchange was more urgent apparently. I got the strong sense that millions were lost because of my screw-up. But then again, the people of Thailand or Argentina might have come out on top so I don’t feel so bad now.

Vivian Schneck was cut out for Goldman it seems. Recently she became Chief Information Officer, where I am sure she is deliriously happy continuing to work 60 hour weeks and raking in the dough, including a chunk of change that I threw into the pot as a taxpayer.

As for me, I’ll stick with what Paul Lafargue, Marx’s son-in-law, once said-just don’t tell my boss at Columbia that I said it!

A strange delusion possesses the working classes of the nations where capitalist civilization holds its sway. This delusion drags in its train the individual and social woes which for two centuries have tortured sad humanity. This delusion is the love of work, the furious passion for work, pushed even to the exhaustion of the vital force of the individual and his progeny. Instead of opposing this mental aberration, the priests, the economists and the moralists have cast a sacred halo over work. Blind and finite men, they have wished to be wiser than their God; weak and contemptible men, they have presumed to rehabilitate what their God had cursed. I, who do not profess to be a Christian, an economist or a moralist, I appeal from their judgement to that of their God; from the preachings of their religious, economics or free thought ethics, to the frightful consequences of work in capitalist society.

8 Comments »

  1. This post is worth reading for the Paul Lafargue quote alone!

    Goldmine Sachs & other corporations inculcate a culture of greed and selfish among their workers. This is part and parcel of the socialization process in corporations nowadays, in spite of all the talk about corporate social responsibility and various PR propaganda.

    Comment by Abu Spinoza — March 27, 2009 @ 11:34 pm

  2. Very interesting post! I bet everyone at Goldman Sachs is working 60 hours a week now… or maybe some of them don’t give a shit.

    Comment by de.borea — March 30, 2009 @ 5:33 am

  3. Louis, I’ve been looking for a piece I recall you writing debunking the ‘social security crisis’ myth and tracing the links between the various obnoxious Cato Institute types who promote it. Alas, I can’t find it on your site – I didn’t imagine it, did I?

    Comment by D. J. P. O'Kane — April 5, 2009 @ 5:06 pm

  4. So in other words, Goldman Sachs gave you a job and paid you decently for it. You, in return, were both lazy and incompetent. When you screwed up and (presumably) cost the firm money they were good enough not to fire you. They seem like a pretty good employer and you seem like a whining douchebag – a somewhat anti-semitic one at that with your various comments about Jewish banks and bankers. What a loser.

    Comment by DX — July 29, 2009 @ 4:46 am

  5. “So in other words, Goldman Sachs gave you a job and paid you decently for it. You, in return, were both lazy and incompetent.”

    I was not lazy. I just refused to work 60 hours a week and be paid for 35. In terms of screwing up some database maintenance, this actually happens routinely. If making mistakes in software development is punishable by firing, Microsoft would have gone out of business years ago.

    “They seem like a pretty good employer and you seem like a whining douchebag – a somewhat anti-semitic one at that with your various comments about Jewish banks and bankers. What a loser.”

    Actually, I am Jewish–a real Jew at that. Like the Marx brothers. Not a phony Jew like the Goldman Sachs vultures who worship mammon.

    Comment by louisproyect — July 29, 2009 @ 1:31 pm

  6. Interesting piece Louis. Reminds me of an adage that says “Until you value yourself, you will not value your time. Until you value your time, you will not do anything with it.” It seems there are many people who hold little value of themselves and time…and justify that existence in name of money. It’s good for Goldman but a sad day for humanity or any employee that rejoices to the drum beats of corporate galley…slaves!

    Comment by Jax — July 30, 2009 @ 4:23 am

  7. I too worked at Goldman and gratefully drank the coolaid for a brief time, but I came and went with guarded curiosity about the extreme culture of success there and the need to turn ones will and one’s life over to the pursuit of money – the Goldman Way. I am happy to see them under the scrutiny of the magnifying glass — that’s what they themsevles do so well.

    Comment by SeeYa — January 9, 2010 @ 9:09 am

  8. I didn’t last there very long, just didn’t fit in with the culture or work practices (after quite a few years at other big ibanks). Quite a few of my friends left only after a few months as well, seems like the place you go to straight from uni, else its too much of a culture shock. Would much rather have a life doing something I love, with some social concious, rather than money. To anyone thinking of working there, be sure that its really what you want and you’re prepared for all the sacrifices.

    Comment by MT — September 2, 2010 @ 4:44 pm


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