Students at Princeton begin to think about Goldman Sachs in a new way.
My headline is a student’s comment on an article in the Princeton paper. This is how the article concludes:
The charges claim Goldman Sachs led clients to believe that a financial product was high quality while simultaneously betting that the product was low quality. Like a cliche used-car salesman, it sold its clients a lemon. When the housing market collapsed, Goldman got rich and its clients went belly-up.
… [Not] all activities that expand liquidity are good. This point might be easily missed because the people who invented and supported these trades became quite wealthy. And most people who (mis)understand economics believe that it teaches that people get rich because they do valuable work. What the recession shows is that people can earn a lot just by convincing others that their work is valuable, even if it isn’t.
[The gap] between what people think and what is actually true … allowed traders and analysts to do harm to our economy while believing that they were actually doing good.
… So, to my classmates who dream the Wall Street dream, or to those who are willing to defer their own dreams while working on Wall Street, I say only this: Mind the gap.