Well, Gop front-runner Mitt Romney is right about one thing, “Companies are people” too. How else to explain the $2 billion dollars in market value that was wiped off of Goldman Sachs stock on Wednesday after Greg Smith, a mid-level derivatives salesman published a 1200 word kiss-off to his so-to-be former employer in the New York Times.
The screed soon went viral with its allegations that Goldman fosters a toxic culture where naive clients are sometimes referred to as “Muppets”. With apologies to Kermit, Smith’s missive resonated with readers on and off Wall Street because number one, it confirmed what many believe about Goldman, and number two if a guy is going to forfeit a job that pays in the high-six figures, he must really believe what he is saying.
And while the cynic in us continues to debate Smith’s real motives in penning his op-ed, it’s clear Goldman found itself flat-footed when confronted with a pretty predictable P.R. headache.
Rather than ignore the rantings of just one of its 30,000 employees, Goldman put its communications machine into over-drive. A memo from CEO Lloyd Blankfein even outlined the fact that 89 percent of the 85 percent of Goldman employees who responded to a company survey said they believe the firm provides excellent service to its clients. Huh? By my math that means 25 percent of Goldmanites don’t believe that to be the case, or were too lazy to vote. No matter, the firm continued its pattern of protesting too much.
Call it the “you’re not like us” problem. It’s a phenomenon that nearly four years since the global financial system began its implosion still surfaces with regularity in the most high-profile places.
Fortunately for Goldman, it now has a new head of communications, a new spin-meister and one with a sense of humor. Jake Siewert, a press secretary in the Clinton Administration joined the firm on Tuesday, and it’s likely we’ll see his stamp going forward as he tries to re-brand the 150-year old firm. Already, Siewert’s hand seemed to be at work late in the week as Mayor Michael Bloomberg rode to Goldman’s defense and rallied the troops with a message that what is good for Goldman is good for New York. From a bottom line point of view, it’s hard to argue with Mayor Mike.
As for the likely presidential candidates in November, the picture is not as clear. Both President Obama and Candidate Romney face Goldman-like problems connecting with average Americans. But as the Goldman agonistes show, even the best P.R. money can buy can’t change public perception when the public doesn’t buy into the product. Obama and Romney are those products.
The fact that they are each such a hard sell, despite the efforts of the most-expensive spin doctors in the land, is what will keep Wall Street and Main Street on edge well past the summer.