Song of Solomon

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I’m Bill Cohan. Welcome back to Dry Powder.

Few C.E.O.s on Wall Street are scrutinized more closely than the leader of Goldman Sachs. But I wonder if the hyperventilating media narrative attaching itself to David Solomon isn’t overblown. Today, a behind-the-scenes look at the inside conversation within the firm—and some much-needed historical perspective.

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Song of Solomon

The player haters are out for Goldman after a painful quarter, cost-cutting and layoffs. But Goldman historians (like yours truly) have seen this movie before and it always has a happy ending.

WILLIAM D. COHAN

Running Goldman Sachs is a bit like managing the New York Yankees or being the president of Harvard—it’s a job draped in prestige and riches and accomplishment and yet everyone pretty much thinks he or she can do it, or has an opinion about how to do it better. And heaven help you if you make a gaffe, as the garrulous Lloyd Blankfein did in November 2009 when he referred, in an off-the-cuff, tone-deaf remark, to his job as “doing God’s work.” Or when the venerable economy-rescuing Hank Paulson, Blankfein’s predecessor, claimed, in January 2003, that about 20 percent of Goldman’s employees were generating 80 percent of the value for the firm. “I think we can cut a fair amount and not get into muscle and still be very well positioned for the upturn,” he said at an investment conference. The chattering classes had a field day in both instances...

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FOUR STORIES WE’RE TALKING ABOUT