In the world of financial news, last week’s completely badass op-ed from (now former) Goldman Sachs executive Greg Smith, titled “Why I Am Leaving Goldman Sachs” was, well, pretty huge. Like a real-life Jerry Maguire-ing, minus the pilfering of goldfish or a pleasantly pre-surgery Renee Zellweger. Smith’s diatribe—which you should definitely read—basically lamented the moral unhinging of a firm that, if always greedy, at least used to be that way on behalf of its clients.
“It makes me ill how callously people talk about ripping their clients off,” Smith wrote. “Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes over internal e-mail. Even after the S.E.C., Fabulous Fab, Abacus, God’s work, Carl Levin, Vampire Squids? No humility? I mean, come on. Integrity? It is eroding. I don’t know of any illegal behavior, but will people push the envelope and pitch lucrative and complicated products to clients even if they are not the simplest investments or the ones most directly aligned with the client’s goals? Absolutely. Every day, in fact.”
The op-ed sparked a great deal of backlash, some of it from people who mocked Smith for an alleged naivete about how the banking sector works. NYC Mayor Michael Bloomberg popped over to Goldman’s offices to reassure them—because doesn’t this firm just scream insecurity?—that he’s still their friend, and Bloomberg News (yes relation) published its own opinion piece scoffing at what they considered Smith’s perception of banks as “existing only to bring light and peace and happiness to the world.”
Me, I was riveted by the whole thing. Not only because Smith broke the first rule of Wall Street—you do not talk [honestly] about Wall Street—but because when the op-ed appeared I was smack in the middle of Matt Taibbi’s Griftopia, a book spawned in part by the Rolling Stone reporter’s now-famous article about Goldman (the source of the also-now-famous “vampire squid” moniker.) It was the nonfiction equivalent of reading Twilight and then having a sparkly vampire show up at your front door, bitching about immortality and the wet-dog smell of all those fucking werewolves.
I only vaguely understand the knee-jerk reaction to Smith’s op-ed, which does at times seem to suggest that he simply drank the wrong Kool-Aid (the light-and-peace variety, instead of the lie-and-steal flavor). But in reading Griftopia, it’s difficult not to see where Smith is coming from. Although the book isn’t entirely about Goldman, Taibbi lays out a fairly clear narrative surrounding the firm’s increasingly lackluster attention to banking best practices—namely avoiding the kinds of economic bubbles that take down entire financial systems, housing markets and, you know, countries.
Griftopia is one of many books to come out of the financial crisis, and finds itself in the company of stellar nonfiction like Andrew Ross Sorkin’s Too Big to Fail and Michael Lewis’s The Big Short. But if you’re not the kind of person who starts your day with The Wall Street Journal, Griftopia is the one book about the crisis that you should absolutely read. Not because Taibbi dumbs anything down—Griftopia isn’t very long, but the text is dense—but because he succeeds where many reporters have failed in making financial news seem like not only something we should care about, but something about which we should be extremely pissed off. Some of this is accomplished in a very Rolling Stone type of way—calling Alan Greenspan “the biggest asshole in the universe” and Goldman CEO Lloyd Blankfein a “motherfucker,” for example—but Taibbi also takes the time to explain some of the complex financial instruments that caused (or at least strongly contributed to) the mess we’re in. In fact, the book’s most patently offensive conclusion isn’t that all this batshit financial maneuvering is going on, but rather that it will continue to go on so long as it remains a) complicated enough that only the people executing it can understand what’s being done and b) mostly outside the burden of regulation, a status quo that both bankers and politicians seem content to maintain.
Griftopia is at once hilarious, thought-provoking, scary and infuriating, and all from a guy who until a few years ago had never covered business news. Maybe it takes a fresh perspective to shed some real light on what’s going on in Lower Manhattan, or maybe it takes a Rolling Stone reporter. Either way, Taibbi does it phenomenally. I’d call this book a page-turner, if we didn’t already know how shittily the story ends.
AUTHOR: Matt Taibbi
PAGES: 299 (in paperback)
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SORTA LIKE: Lewis Black writes Too Big to Fail
FIRST LINE: ” ‘Mr. Chairman, delegates and fellow citizens…’ “