All the populist outrage in the world won't affect Goldman Sachs if its clients don't blink. Although a New York Times article from about a month ago claimed that the bank's customers were thinking twice about their relationships with Goldman, a new column today in the Times today argues the opposite. It says that Goldman's clients understand what they're getting with Goldman: highly skilled bankers who provide precisely what you expect, but are ultimately looking out for themselves. And their customers don't mind.
The column, by Andrew Ross Sorkin, does a good job of lining up some on-the-record comments by executives from big firms that do business with Goldman. Here are a few snippets:
"We trust them," Jeffrey R. Immelt, the chief executive of General Electric, told an audience at the 92nd Street Y in New York last month. "People need to tone down the rhetoric around financial services and stop the populism and be adults."
"Goldman has been politicized, and it is important to look beyond the demagogy to examine the facts," Joseph M. Zubretsky, the chief financial officer of Aetna, the large health insurer, told me in an e-mail message. "Our experience with Goldman is that they conduct themselves consistent with the values we expect from a close adviser."
And it's not as if executives are blind to times and mores. Thomas J. Pritzker, the chairman of Hyatt Hotels and a long-time Goldman client, says he's wise to Goldman's practices.
"I'm a big boy," Mr. Pritzker told me. "I understand that they are in many businesses. I go into it with my eyes wide open." He added, "I don't feel any outrage, just the opposite."
That comment captures exactly the sentiment of Goldman's clients. When you're dealing with a bunch of very smart people who care about their own hides, you need to be aware of exactly what you're getting. That's why working with a bank like Goldman isn't for unsophisticated firms. If you intend to pay for one of their services, then you will be pleased with what you get -- so long as you have realistic expectations. If you think the bank is going to bend over backwards to help you out to its own detriment, then you're naïve.
Of course, Goldman's bad publicity is probably far from over. The Financial Crisis Inquiry Commission intends to subject the bank to yet another abusive hearing. The SEC case is still outstanding, and there are rumors that additional lawsuits might be filed by regulators. But so far, its clients who understand the business are unfazed. And that's ultimately what's most important to Goldman. Although it would like average Americans to view the firm in a positive light, its customers are the ones who pay their bills.