Poor Goldman Sachs. Now that non-finance people are learning how they've been getting rich by gaming the system like a gambler with knowledge of every card on the table, their reputation is circling the drain. Do they care? Hell no!

Stung by the recent populist uprising against their firm, Goldman Sachs relented to allowing a dreaded journalist, New York's Joe Hagan, inside of their hallowed halls and access to one of their top executives, Goldman chief-of-staff John Rogers. In his massive piece Hagan rehashes much of what took place in recent years that has led the firm to this point, but perhaps the most interesting aspect of the piece were the last two pages focusing on how the bad publicity is affecting the firm and the attitude those inside of Goldman's cultish bubble have towards their firm's tarnished reputation.

Historically, Goldman has been able to translate its reputation into financial leverage. "It's the difference between charging 3 percent on a deal and 4 percent on a deal," says a person who has dealt with the firm. Over time, that difference has added up to the edge Goldman has over its rivals. It also helped the firm attract the best talent-the "chosen ones," as one former staffer put it, who thought of Goldman as a higher calling and had an eye toward a future Treasury post.

Now that the firm is viewed as a virtual rogue state with interests contrary to the greater good, Goldman might attract a different breed of recruit-less Robert Rubin, more Gordon Gekko. Or fewer recruits in general: A human-resources executive at Goldman Sachs, Edith Cooper, says she counted about 20 percent fewer people at recent on-campus recruitment seminars. A Wharton graduate who interned at Goldman Sachs says many fellow finance majors are looking elsewhere. "Before, it had this aura: finance, Goldman," he says. "[Now] it seems to be a little less the case."

Even in Washington, a town populated by tainted whores, Goldman Sachs is currently the one tainted whore nobody wants to get caught in bed with.

Out of political necessity, all of Washington appears to be turning a cold shoulder toward Goldman. A senior Obama-administration official close to Tim Geithner declares that "Goldman has left the building." Onetime Goldman lobbyist and now Treasury chief of staff Mark Patterson has taken a public beating for his connection to the firm. And John Thornton, a former president at Goldman Sachs, was passed over as ambassador to China because his relationship to the firm "concerned" the Obama administration, says a person familiar with the situation. "It used to be if you were a senior Goldman person and you were considered for a position, you'd have an advantage," this person says. "Now it's clearly a disadvantage."

So how are the executives at Goldman taking all of this? Well, as long as the fat bonus checks keeps coming, they really don't give a shit.

In the end, Goldman's reputation is a luxury they may well be able to do without. Robert Rubin has been privately critical of how the firm has handled the threats to its prestige, and Rogers recently addressed the firm's reputation in seminars with Goldman staff. But a person who frequently talks to senior executives at Goldman sums up the company's attitude this way: "If we can push the envelope without D.C. punishing us, we don't care about our Main Street reputation." (CEO Lloyd) Blankfein in particular is said to be dismissive of the firm's critics. According to a person close to him, the CEO believes Goldman's internal problems will disappear once compensation comes back. In other words, money will solve everything.

And the world spins madly on.


Is Goldman Sachs Evil? Or Just Too Good? [New York]