The questions--really only one of them, repeated in different forms at least a half dozen times--seemed clear enough: Goldman Sachs, if I have this right, was asked by a client how they managed to feel comfortable with a financial arrangement that was evidently going to turn out badly. They felt comfortable, it appears, because they had a financial interest in the deal going sour--and yet they did not share this information with the inquiring client. Did they not, the senator kept asking, have an obligation to acknowledge what their interest was? After hearing numerous explanations of the issue rather than an answer to his question, the senator gave up, concluding that the executive was simply refusing to respond.
I saw it a little differently--not that the guy was refusing to answer the question, but rather that the question itself came from some other universe than the one that he naturally inhabits. The question came from the sphere of ethics. Truly disturbing was that it ran right past this undoubtedly smart, undoubtedly well-informed, perhaps even well-intentioned businessman, whose head was firmly planted in the world of business. He wanted to give a business answer to an ethical question, and simply could not see that in doing so he was missing the whole point of the question.
I was talking only a little later to a man who for many years has guided our own financial decisions, and who is well-versed in the world of finance. Without, he said, wanting to defend Goldman Sachs, he saw the issue differently. Essentially, as he saw it, GS was in this instance no more than an intermediary in a business deal, with obligations to both parties--the party that wanted to sell the "product" and the party that was willing to buy it. The product was essentially a bet between willing parties, and each side was responsible for acquiring the information needed to make their bet a sound one. The client, my friend argued, in this case, was not your aging grandmother, but a player who should accept responsibility for his own mistakes. (As I understand it--and I admit my understanding is extremely limited--GS was not only the intermediary, but also the creator and seller of the "product.")
My friend further argued, in the same vein, that in the mortgage crisis there were no innocents, that those who took out loans they could not afford were as guilty as those who let them have the money; and that the rot of greed pervaded the system, top to bottom. Okay, I hear that argument. But venality at low end of the financial markets does not excuse the even greater venality at the high end. And what's truly disturbing is not just that venality exists--I'd be surprised, really, if it didn't--but that there are so many in our society, like the executive under questioning from Senator Levin, who simply can't see or recognize it as venality. This was the man who insisted, high-mindedly and with apparent sincerity, in his opening statement, on his personal integrity and that of the firm for which he worked.
The tragedy is that we have created an alternate universe, in which we live our lives and pursue our interests in denial of truths that used to be self-evident. We have come a long way indeed since that "Wonderful Life." We used to be able to believe that the world of business and the world of ethics coincided, in most important respects. Now, though, it seems they have shifted to different, non-communicating universes.