See also papers in SH Archive Financial Institutions box 3.

Last year I read “The House of Morgan,” by Ron Chernow—a history of J. P. Morgan’s banking empire. I absolutely loved it, and was in the mood again for something similar, and came across “Money and Power.” They both very long books covering a time span from the late eighteen hundreds into the 21st century.

Unfortunately, I can’t say that Cohan’s history lived up to Chernow’s.

Although the book does cover the entire history of Goldman Sachs, starting with Marcus Goldman in 1869 and Samual Sachs in 1885, the early days receive little attention, and the book is heavily weighted towards recent history. Additionally, the quality of the reporting only becomes excellent in recent years, especially surrounding the subprime mortgage crisis. This part of the book is truly fascinating, because we get to hear about the inner workings of this part of the financial system and get into the technical details. Much of the rest of the book focuses more on politics though, and doesn’t get as deeply into business fundamentals.

In my mind, the epitome of Goldman are the stories about, during Hurricane Irene in 2011, how it was the only building that had power and was working around the clock during the crisis. Cohan sometimes describes Goldman associates as “cyborgs,” and this is a description that seems to fit our collective image of the firm.

Goldman is a bit of a paradox; on the one hand, sometimes you encounter testimonials of Goldman as the preeminent client-centric financial firm. And yet there are also countless stories about their heartless (and unethical) pursuit of profit at any cost. In reading this history, it has become clear that there has been a sea change in Goldman’s history, potentially coinciding with the shift in financialization of the US economy during the late ‘70s and early ‘80s. Goldman, in it’s first era, was a client-centric firm. And Goldman today is utterly ruthless, and I wouldn’t blame you for thinking they’re evil.

There were a few striking stories that stood out from the text. One was about a partner who stalked and sexually assaulted a female Goldman employee for years. In the end, it was more damaging to her career than his. The mistreatment of women appears to be part of their institutional culture. Another story involved a holiday weekend. New hires were asked to meet at 5:00pm on a Friday afternoon. By 8:30pm, no senior associates had shown up yet to let people know why they were missing there weekend plans to waste time sitting around, and three people left. At 10:00pm, someone showed up, and dismissed everyone, explaining that it was their job as Goldman employees to blindly follow instructions, regardless of the context. The three people that left early were fired the following week. The company I work for, by comparison, has a five-minute grace period. If someone’s five minutes late, the meeting is canceled and rescheduled. Respect always needs to travel both ways in a relationship.

This theme epitomizes the Goldman ethic of putting the firm's needs before employees' own. In some instances, I could see this being a healthy and good arrangement, such as in an eco village. But in this instance, where no thought is given to employee wellbeing, and where employees regularly work 100 hours a week, I’m left thinking of Goldman as something like modern day North Korea—communism gone horribly wrong.

All in all, Cohan’s book was a mediocre look into the fascinating firm that is Goldman Sachs. ( )

Quite a difficult read, and the themes felt very repetitive in places. I was hoping for a bit more about the GS culture rather than a flat biography of each senior partner. ( )

Goldman Sachs (Subject)