Greg Smith Shined Light on Wall Street

Jews Have Been on Both Sides of 'Toxic' Money World

Alone on the Street: Whistleblowers like Greg Smith of Goldman Sachs call attention to the dubious misdeeds of our financial titans.
getty images
Alone on the Street: Whistleblowers like Greg Smith of Goldman Sachs call attention to the dubious misdeeds of our financial titans.

By Leonard Fein

Published March 25, 2012, issue of March 30, 2012.
  • Print
  • Share Share

On the day after his op-ed piece appeared in the New York Times on March 14, Greg Smith, a mid-level executive in the London office of Goldman Sachs had generated 19 million entries on Google. By three days later, that number had risen to 134 million.

Smith’s announcement of his departure from the storied firm whose culture he describes as “toxic and destructive” set off a shock wave heard ‘round the world. It was brutally criticized as naïve, but far more frequently praised as courageous, an “unprecedented revelation” of the distortions that have come to characterize Wall Street’s behavior. There’s been much discussion of greed, which appears to be the principle lubricant of the financial industry, and debate between those who think greed inherent in the market system and those who believe it can and should be expunged — or, at least, somehow contained. My own view is that what we are talking about here is not greed; it is avarice, in which all sense of proper proportion is lost.

Greg Smith
Greg Smith

Bur relax: I am not about to launch into a disquisition on derivatives and credit swaps and the other arcane arrangements that led to the world financial crisis of 2008 and that have yet to be adequately addressed. Truth is, my own interest in the Smith saga is quirkily more parochial, particularly piqued by Smith’s inclusion among the proudest moments in his life his having won a bronze medal (in table tennis, aka ping-pong) in the Maccabiah games in Israel. (Full disclosure: I am an undefeated ping-pong champion of Eilat, having defeated the army corporal who’d been the local champion back before Eilat was a city, when it was just a lonely army base. I retired immediately.)

The Maccabiah games, together with the fact that Smith hails from South Africa, set me searching — and, sure enough, Smith graduated from the famous King David Schools in Johannesburg, schools whose mission statement says they aim to deliver “an excellent general education together with the study of Hebrew, Jewish Studies and the living of the Jewish calendar” and to produce “graduates who are menschen, confident and equipped to pursue any opportunity they wish to, who are proud of their Jewish heritage and its traditions, who have a love for learning, and a determination to contribute to their society.”

One for our team, I thought. A noteworthy one, since the number of insiders who have volubly called public attention to the endless excesses that characterize the financial industry is tiny. Award-winning journalist Michael Hirsh, author of the much praised Capital Offense: How Washington’s Wise Men Turned America’s Future Over to Wall Street, writes of the “very small group — an absurdly small group — of truth-tellers” who have come forward to bear personal witness to these excesses. He names just two others: Frank Partnoy, who, says Hirsh, described the Morgan Stanley of the 1990s as a “furious profit machine…mainly involved in speculation and scamming, using arcane derivatives and complex new packages of debt obligations and interest-rate payments that Morgan foisted on customers who barely understood them,” and one other, “a former Moody’s managing director [who] revealed in congressional hearings in late 2009 that even into the year after the financial crisis, the firm continued to deceive investors by inflating ratings on dubious securities.”

The Internet is so handy. I tracked down Partnoy, now Professor of Law and Finance and Director of the Center on Corporate and Securities Law at the University of San Diego and widely recognized as one of the world’s leading experts on the complexities of modern finance and financial market regulation. He worked in derivatives at Morgan Stanley and CS First Boston during the mid-1990s and wrote “F.I.A.S.C.O.: Blood in the Water on Wall Street,” a best-selling book about his experiences there. And yes, he grew up in a Conservative synagogue in Kansas City.

I’ve not yet managed to communicate with the Moody man Hirsh mentions, but I did watch a Chris Hayes show on MSNBC devoted to the Smith affair and its larger context, in which all the panelists compellingly called for tougher regulation of Wall Street — and when I say “all the panelists” I include Ezra Klein, Noam Scheiber, William Cohen, Alexis Goldstein, Jared Bernstein and Dan Dicker. It is hard to avoid the conclusion that a responsible social ethic is part of our makeup.

Hard to avoid, that is, until we are reminded of Wall Street titans such as Richard Fuld (Lehman Bros.), Bob Rubin and Lloyd Blankfein (Goldman) who seem quite differently composed. Jews are, in other words, a mixed multitude — saints and sinners, Nobel laureates and fraudsters, wise sons and wicked sons. Some day, perhaps, once sequencing of the individual human genome becomes routine, we may be able to map such differences. In the meantime, the work of bending the arc towards justice — and truth, its handmaiden — awaits. So, too, real regulation.

Thank you, Greg Smith, et al.

Contact Leonard Fein at feedback@forward.com


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • “This is a dangerous region, even for people who don’t live there and say, merely express the mildest of concern about the humanitarian tragedy of civilians who have nothing to do with the warring factions, only to catch a rash of *** (bleeped) from everyone who went to your bar mitzvah! Statute of limitations! Look, a $50 savings bond does not buy you a lifetime of criticism.”
  • That sound you hear? That's your childhood going up in smoke.
  • "My husband has been offered a terrific new job in a decent-sized Midwestern city. This is mostly great, except for the fact that we will have to leave our beloved NYC, where one can feel Jewish without trying very hard. He is half-Jewish and was raised with a fair amount of Judaism and respect for our tradition though ultimately he doesn’t feel Jewish in that Larry David sort of way like I do. So, he thinks I am nuts for hesitating to move to this new essentially Jew-less city. Oh, did I mention I am pregnant? Seesaw, this concern of mine is real, right? There is something to being surrounded by Jews, no? What should we do?"
  • "Orwell described the cliches of politics as 'packets of aspirin ready at the elbow.' Israel's 'right to defense' is a harder narcotic."
  • From Gene Simmons to Pink — Meet the Jews who rock:
  • The images, which have since been deleted, were captioned: “Israel is the last frontier of the free world."
  • As J Street backs Israel's operation in Gaza, does it risk losing grassroots support?
  • What Thomas Aquinas might say about #Hamas' tunnels:
  • The Jewish bachelorette has spoken.
  • "When it comes to Brenda Turtle, I ask you: What do you expect of a woman repressed all her life who suddenly finds herself free to explore? We can sit and pass judgment, especially when many of us just simply “got over” own sexual repression. But we are obliged to at least acknowledge that this problem is very, very real, and that complete gender segregation breeds sexual repression and unhealthy attitudes toward female sexuality."
  • "Everybody is proud of the resistance. No matter how many people, including myself, disapprove of or even hate Hamas and its ideology, every single person in Gaza is proud of the resistance." Part 2 of Walid Abuzaid's on-the-ground account of life in #Gaza:
  • After years in storage, Toronto’s iconic red-and-white "Sam the Record Man" sign, complete with spinning discs, will return to public view near its original downtown perch. The sign came to symbolize one of Canada’s most storied and successful Jewish family businesses.
  • Is $4,000 too much to ask for a non-member to be buried in a synagogue cemetery?
  • "Let’s not fall into the simplistic us/them dichotomy of 'we were just minding our business when they started firing rockets at us.' We were not just minding our business. We were building settlements, manning checkpoints, and filling jails." What do you think?
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.