Banker Greg Smith quit Goldman Sachs in spectacular style, making a splash in the press as big as the fortune he and his colleagues made off the backs of clients worth trillions of dollars. Unfortunately, unlike Mr Smith the 99% are simply not in a position to walk away from the mess the bankers created and are suffering the consequences of record unemployment and a broken society. Neither have the 99% been collecting a hefty six-figure salary as Smith has for the past 12 years before his epiphany.
However, what may be more significant than the tales of gullible Muppets on Wall Street is that the greed culture has ratcheted up in the years after the financial crisis broke in 2007 rather than diminishing, according to Smith. The Gordon Gekkos of this world may no longer preach openly that 'greed is good' mantra, but they are still humming it under their breath and teaching it to the new recruits at investment banks such as Goldman Sachs. The bankers are fighting tooth and nail to hold on to their ill-gotten gains and Smith's revelations suggest they will only be forced to change through legislation. They are not fit to self-regulate.
Smith says that integrity is eroding at Goldman Sachs and that the younger generation are putting profits first and second before clients. He continues,
I hope this (letter) can be a wake-up call to the board of directors. Weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again....
A fat chance! This is the rotten bonus culture which governments are unwilling to tackle. Policy-makers are blinded by the financialization of the economy and the bankers, while admitting their mistakes, are not paying for the consequences of it. The debt is being shifted to the public who are paying for it through increased taxes, slashed public services, reduced pensions and soaring unemployment.
What is required is a radical overhaul of the discredited financial system, to include the introduction of a Financial Transactions Tax, higher taxation for top earners, an end to share buy backs and financial speculation, an end to tax havens and most certainly an end to multimillion dollar bonuses for leaders who have failed.
While Smith may have lifted the lid on the already discredited financial system a fraction, what lies beneath needs a thorough investigation through the collective efforts of governments and the cooperation either willingly or otherwise of all the financial institutions who have played a leading role in putting 225 million people out of work and destroying the lives of many others.
So, congratulations Greg Smith for waking up. However, we already knew about the toxic state of the financial culture. We are living through its consequences. It's time for the rest of the bankers to be forced to look in the mirror and for us to take action against them.