The Role of Lloyd C. Blankfein Will Be Played By Mel Gibson.

“Goldman Sachs has agreed to pay $550 million to settle federal claims that it misled investors” according to an article in The New York Times (7/15/10) by Sewell Chan and Louise Story. Yet, their stock has gone up, clients haven’t left and their chairman and chief executive, Lloyd C. Blankfein still has his job. Why?

First, let’s dispense with that fine business. Goldman Sachs acts like Murder Inc. (“Goldfellas” TFT 8/6/09) and they get a slap on the wrist. Not even. Though an historic sum by S.E.C. standards, $550 million, as Graham Bowley writes in the same issue, “Represents a mere 15 days of profits, based on Goldman’s 2009 earnings.” That’s not punishment. That’s sending their profits on vacation.

As for the 5% rise in their stock price, who cares? I don’t own Goldman Sachs stock and don’t know anyone who does. Do you? Warren Buffet cares, but I don’t own Berkshire Hathaway stock and don’t know anyone who does. Do you? (“A New Financial Model For Wall Street” TFT 12/12/09)

What concerns me are the clients of Goldman Sachs. How can they trust a company that agrees, under pressure, not to commit intentional fraud in the future. That’s always against the law. You shouldn’t need the U.S. government to, shall we say, remind you. The one “mistake” Goldman “regrets” is that “marketing materials contained incomplete information.” Suppose you're a client and you decide to trust them? How do you know that your “marketing materials” will be “complete?” That your competition isn’t getting the complete ones or, maybe, no one is except Goldman itself. (“Letter To Our Clients From Gold Ransacks” TFT 1/13/10)

The next business to hire Goldman Sachs will be in the same position as the next woman to date Mel Gibson. By now, everyone knows that he’s a colossal jerk and that his attitude towards women falls somewhere between that of the Roman Catholic Church and the Taliban. (Mel, by the way, is a very religious Catholic. Not that there’s a connection. Not that there isn’t.) Yet, you know there will be a next woman, if not many, because, after all, he’s a movie star! He’s rich, famous, talented and, before he started looking like a dingo’s breakfast, incredibly handsome with blue eyes to die for. In his movies, he still is. The fact that if you displease him – in any way – he’ll twist your head off and have sex with your throat doesn’t seem to bother these women.

It’s the same with Goldman. They’re rich, famous, powerful and have, for many years, been the most profitable financial firm in the country. In the pecking order of Wall Street, they’re the big pecker. How do you know they won't break your corporate heart? Oh, that’s right, you’re too smart and tough to be taken in. You wouldn’t invest in anything as risky as subprime mortages. Not you. That’s for fools like Lehman Brothers or Bear Stearns or AIG.

Still want to ride the tiger? Consider the picture of Lloyd Blankfein that accompanies those articles in The New York Times. The one by Chris Kliponis of Bloomberg News. See that gimlet-eyed expression of skepticism? The last time I saw it was in the movie, The Pawnbroker (1965). Rod Steiger, in the title role, was giving that look to the poor African-American woman trying to convince him that her diamond ring was real.

The point, anyway, is not that you can outsmart your banker, but that it shouldn’t be necessary. You shouldn’t have to worry about him betraying you. If you’re a Hollywood starlet, you shouldn’t worry that the handsome Australian you’re dating could turn into a Tasmanian Devil. I’m not pushing for legislation or punitive fines because both can be subverted. Indeed, an entire political party exists for that purpose. Nor do I expect a radical shift in human nature. As a society, though, we should not reward unethical behavior by giving the companies involved our business and, implicitly or explicitly, our respect. And, as a group, financial firms like Goldman Sachs and CEOs like Lloyd Blankfein, should, at the very least, catch up with the rest of the corporate world. The part of it that uses marketing to compete for customers. They know that a reputation, what they call a “brand”, is a very valuable, but very fragile, asset. It must be cultivated diligently and handled carefully. They know it’s a long trip to the throne and a short one to the toilet. And there’s no turning back.