The Guest Blog

By Jim Egan, Principle Partner at Ferrumar.

How the ‘Masters of the Universe’ view our world

(Photo source)

What delicious irony to behold the Goldman Sachs cult’s desperate attempts to evade its well-deserved public and political back lashings.

Tout au contraire, that Goldman’s “… reputational damage is hard to gauge …” (The Economist, “Sachs and the shitty”, Apr 29th). Unsurprisingly, Goldman’s CEO has lustily stated his bank now wants to “… form a strong relationship with the American public …” (Financial Times, “Goldman in PR bid to stave off crisis”, May 3rd). Perhaps current events will force him and his ilk to finally embrace the reputational hedging strategy of commercially-enlightened philanthropy (FT, “Can today’s philanthropy fend off future bank-bashing?”, Nov 20th 2009). But there are signs Goldman will never regain social acceptance and has entered an era of vicious terminal decline.

Given Goldman’s steadily-accelerating travails since last year, its CEO displayed ludicrous myopia when he claimed “A keen and comprehensive appreciation for risk is at the centre of everything we do …” (FT, “A lost glitter”, Nov 19th 2009). Since the financial crisis began, when has Goldman vividly illustrated its enduring value to civilisation and thus ascend into the Pantheon of the world’s most revered brands? Such potent brand equity would have generated ‘walking harvests’ on which Goldman could survive today’s perfect storm of undoubtedly protracted disasters (regulatory, litigation, public relations, political witch hunting, client exodus, staff defections). Instead, Goldman’s leaders created the preconditions for its current reputational train wreck through hubris, risk negligence and intellectual sloth.

Goldman’s strategic mismanagement and chronic brand equity cluelessness are causing that bank to be tattooed as societies’ quintessential parasite. And having blindly stumbled into the reputational quagmire Goldman has ensured it is relentlessly attacked by modern muckrakers. However, there is a bright side to Goldman’s profound and entirely self-inflicted crisis. Its degeneracy will spawn and fertilize a new generation of ethically-based and truly value-adding boutique investment banks, likely founded by clued-in and nimble Goldman refugees now nervously eyeing their career lifeboats.

Goldman is not the only investment bank (er, well, bank-cum-financial holding company) that deserves to be hounded and caned by an enraged public and acutely election-sensitive political caste. But the banal belief touted by Goldman’s senior executives since the depths of the financial crisis, that their gang merely ‘does right’ for clients — now at mind-bogglingly future public expense — thinly disguises an outsized bonus culture whose net effect is dissolving the marrow in society’s bones.

In America, as Congress and the Securities and Exchange Commission (SEC) decide Goldman’s near-term fate it is worth considering a disturbing 9/11 parallel. On that horrific morning in 2001 religious zealots, enthralled by a cult of personality, overpowered flight crews to hijack fully-fueled passenger aircraft which were then used to ignite and collapse the World Trade Center towers. Thousands of innocents were murdered by hijackers carrying out what their leaders had convinced them was “The Will of God.”

The delusion holding sway over Goldman’s fundamentalists is that they too are doing “God’s work”, as the bank’s CEO famously asserted (The Sunday Times, “I’m doing ‘God’s work’. Meet Mr Goldman Sachs”, Nov 8th 2009). His quip spoke volumes about the Goldman cult’s sense of invincibility, entitlement and moral destiny. Underpinning that bank’s Crusade of Greed was a well financially-oiled propaganda machine which convinced politicians, regulators, the media and ordinary citizens that financial markets (rigged to ensure unjust insider enrichment) were efficient, self-policing and requiring neither regulation nor alert government oversight. Goldman’s brilliant deception program enabled its high priests to stealthily hijack that system to sow ‘financial weapons of mass destruction’ that nearly collapsed the American and British economies (among others).

Recent hearings on Capitol Hill (and the expanding SEC investigations) have exposed the Goldman zealots’ self-dealing, client manipulating, ‘pumping and dumping’ of toxic CDS and CDO products to generate massive fees and commissions, and gaming the financial system to the brink of meltdown. Hundreds of millions of innocents worldwide have had their companies laid low, jobs threatened, livelihoods destroyed, savings drained, pension cupboards pillaged, and homes foreclosed or jeopardized.

Is it not therefore ironically fitting and bittersweet that a tantalizing method suggested for marginalizing jihadists (FT, “Ridicule can be our weapon against terrorism”, Apr 16th) can and should be instantly deployed to marginalize financial extremists? Especially Goldman’s, whose predations and ever-growing prosperity are fueled by unprecedented government-mandated bank support programs which taxpayers’ unborn great-grandchildren will likely still be paying down into old age?

While 9/11’s gaping hole in Manhattan is oft-visited hallowed ground, Goldman’s strategically inept management and transaction-obsessed culture have yielded an unintended nearby ‘place branding’ consequence. That bank’s headquarters, just a short stroll east at 85 Broad Street, may become an overnight mega-tourism magnet for entirely different emotional and spiritually cleansing reasons.

Why? People from all professions round the world will be keen to make a lifetime pilgrimage to Goldman’s glistening headquarters façade, and affix a clipping, printout or drawing of that bank’s once venerated brand. Camera-friendly stars, starlets and cultural trendsetters will also vie for special appearances to help toxify and scorn Goldman’s brand, enshrining its Manhattan citadel as civilisation’s monumental cesspool of avarice, arrogance and stupidity. How? By experiential tourists and glitterati alike incanting “My family will never forget what Goldman Sachs has done, and what could have been”, then concluding their visits by rendering signature strokes upon the world’s newest and most popular public pissoire.

For over a decade Goldman’s alleged geniuses shirked their easy duty to maintain (if not strengthen) the health of the global financial system and private enterprise. Today’s ever-expanding economic and social catastrophes, caused by the nefarious bonus machine in which Goldman Sachs at least served as co-pilot, will motivate seething crowds to daily validate that bank’s new business model and rebirth as a useful public utility.

Alternatively, Goldman Sachs extremists could read the writing on their walls and decide to: A) Stop pissing into the winds of change, and B) Redefine their bank’s relationship with its key markets by finding ways to make tangible, inherently dignified and exceptionally symbolic amends that resonate with bedrock cultural, societal and economic values. Those measures will yield a very different kind of brand immortality than what is assured from the current events trend.

Jim Egan an Irish citizen and the Principal Partner (since 2000) at privately-held Ferrumar, heading an ecosystem of firms creating immersive, experiential digital media projects to influence the emotions, brand loyalties and discretionary spending patterns of global 100m-sized online audiences. He is also Co-Founder of an emerging cleantech company developing household carbon capture and water reuse devices.

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