Stop Turning Goldman Into Scapegoat: Opinion

By Spencer Jakab

I have a confession to make. Several hours into Tuesday's Goldman Sachs Show, I could not help but start rooting for the alleged bad guys and against the sheriff. It was not just the spectacle of clueless senators falling over one another to score cheap political points but the sense that outrage against bankers in general, and Goldman(GS) in particular, has reached unhealthy levels.

I have heard the conspiracy theory that inept regulators or the White House timed legal charges for political ends. I will believe it when I see hard evidence.

Rather, my unease has to do with the possibility that Goldman has become a scapegoat for millions of homeowners and investors psychologically unable to admit at least partial fault for succumbing to the madness of crowds and lure of easy money. The one investment bank that hedged appropriately and enjoyed a hugely profitable rebound is an obvious target. "The idea that Wall Street came out of this thing just fine, thank you, is something that just grates on people," said Senator Ted Kaufman. Goldman may or may not have done anything illegal, but most Americans do not give them the benefit of the doubt. Perhaps in part because I worked for years at a Goldman competitor, my image of the firm before the crisis was one of grudging respect. I first heard of Goldman in 1991 as a graduate student when I won a raffle to have dinner with Henry Kissinger and John Whitehead, the bank's longtime chairman. Being far more in awe of Mr Kissinger, I was surprised to find my fellow winners mobbing the other dignitary, with one even shoving her curriculum vitae into his hands. An older and wiser friend later chided me for my ignorance, implying he would gladly part with an appendage for the chance to work there.

As a green banker, an older client joked about his first day in the business in 1982 when Puerto Rican nationalists bombed Merrill Lynch's Manhattan headquarters. "Didn't they know all the money and brains are at Goldman?" Another time, upon informing my boss that a competitor was headhunting me, he said it would be worth my while to stay put "unless it's Goldman, in which case I'll pack your bags myself".