The Bloomberg Move

The decision by New York City’s Mayor Bloomberg to stand behind Goldman Sachs (GS) — in the wake of the negative news commotion raised when former GS employee Greg Smith damned the firm's culture in a major New York Times op-ed piece — was neither unexpected nor inappropriate.
The question is: was it handled properly? And did the mayor best serve all of his constituencies?

He had to show some solidarity with GS, a major taxpayer and possibly one of the biggest customers, globally, for his company’s terminals (which dispense critical financial information by the minute). Further, Michael Bloomberg is himself "part of Wall Street" ... it's where he made his fortune. Goldman, as The Times has reported, citing a variety of sources, has been “down-on-its-luck." Bloomberg went to the GS offices to do a “pick-me-up” and shake hands with the CEO and others. He intended to make them feel better. He did. But that was only the half the job.

Where did Bloomberg go wrong? He quite properly made a statement supporting the importance of GS as an employer and taxpayer.

But he then clearly expressed his contempt for employees who chose to leave an employer, and particularly long-term employees. Was this comment necessary in the very free society in which we live and work? Obviously, he could not support, nor should he, an employee disparaging his or her former employer publicly. But I felt Bloomberg erred in not explicitly acknowledging the reciprocal obligations which employers have in maintaining a strong and vibrant culture for their employees — which is at the heart of any business! That is what attracts and keeps clients. When people and clients start leaving and saying nasty things, it is not a good sign for any business; particularly one like Goldman that has faced an extraordinary level of public scrutiny.

Since the financial crisis, the culture at GS has become a focal point for critics. There is a growing popular concern about the values that Greg Smith — a 10-year insider — expressed in his op-ed piece, which caught the popular fancy, as his were charges that have been leveled against Wall Street time and again. The Mayor of New York represents these folks, who represent a wide range of backgrounds, including disaffected Wall Street employees and shareholders. In my opinion, Bloomberg should at least have acknowledged the legitimacy of their concerns as well.

Perhaps if he had made his statements from City Hall, rather than at Goldman Sachs itself, Bloomberg might have felt freer to objectively address the topic, appealing to both Wall Street and the other 99%. After all, cultural strength is an important issue for all of a company's stakeholders.