Chapter Content
Okay, so, this chapter, I guess you could call it, is all about this weird disconnect, right? Like, you love the product, but you kinda hate the producer. And it kicks off with this quote from a Senate investigation, you know, where they're grilling some Goldman Sachs CFO. And the Senator's like, "When you hear your employees saying 'God, what a shitty deal' or 'God, what a piece of crap' in emails, do you feel anything?" And the guy, totally deadpan, just says, "I think that is very unfortunate to have on email." I mean, come on!
Then, later, you hear the CEO of Goldman Sachs saying how they're totally focused on client service, always thinking about their needs and interests. But get this, there's this lawsuit going on where investors are claiming that Goldman Sachs misled them with their official ethics statement, which, by the way, starts with, "Our clients' interests always come first."
So, you'd think, right, that Goldman would fight back with all this evidence of how great they are to their clients, testimonials, executives swearing up and down that they always put clients first. But nope. Instead, their lawyers come up with this crazy defense where they point to all these press reports about how Goldman screwed over their customers! And they argue that these reports actually prove that no one takes their ethics claims seriously anyway! I mean, they even compared their ethics statement to like, puffery, you know, like "Heineken refreshes the parts other beers cannot reach!" or "Red Bull gives you wings!" It's like, seriously?
There's even this bit about how someone tried to sue Red Bull 'cause they couldn't fly! Totally a myth, but still, it highlights how ridiculous the Goldman defense is. And, oh yeah, the lawsuit against Goldman? It eventually got thrown out, basically because the court figured everyone already knew Goldman wasn't exactly squeaky clean.
This whole thing kinda bleeds into a bigger picture about the financial sector in general. The financial crisis, the mortgage-backed securities mess, all that stuff... it just trashed the reputation of the banking industry. Banking isn't respected anymore, which, you know, maybe that’s a good thing.
And then there's this example of like, virtue signaling. The CEO of Goldman Sachs announces that they'll only underwrite IPOs for companies with at least one diverse board member. Which sounds great, right? But it's like, is that really ethical behavior, or is it just like, putting on a show?
The chapter brings up Boeing. Remember those 737 MAX crashes? Horrible. The CEO at the time kept saying how safety was their top priority and all that. But then it turned out they'd hidden crucial information about the plane's software from the FAA, from customers, from the pilots! He got sacked, but, I mean, too little, too late, right? And then Boeing had to pay billions in compensation and penalties. Even after all that, they still say they've made "fundamental changes" to their safety processes. But like, are we supposed to believe them?
It really makes you think about "stakeholder capitalism," this idea that companies should consider the interests of everyone involved, not just shareholders. Because the thing is, those interests don't always line up. It’s a conflict of interest! So, should companies try to balance those interests, or is it all about maximizing profits, no matter what?
And it's true, I think, that treating people as just a means to an end, you know, just instrumentally, is bad for relationships. And modern business is all about relationships. So, in the long run, that kind of behavior can really screw things up.
The piece then talks about how business reputation has really taken a hit in the last couple of decades. Enron, the financial crisis, Volkswagen cheating on emissions, Wells Fargo creating fake accounts... and even Silicon Valley stories like Elizabeth Holmes. Like, all these things just erode public trust.
And then there's the whole thing about tax avoidance and the growing gap between CEO pay and worker pay. It's just... it doesn't look good. And the internet giants, the companies everyone used to love, are now the ones everyone loves to hate. Google, Facebook... their reputations are in the toilet.
So you end up with this situation where people love the products, but they really don't trust the companies that make them. Forty percent of young Americans feel good about capitalism, but more feel good about socialism. And, you know, "capitalism" itself, the term, has become this loaded word that people just use to describe whatever they don't like.
But! And this is important, business has also created so much comfort and prosperity. And people still trust their employers more than the government. And there are tons of businesses, the small ones, where people are really trying to do the right thing.
But this book isn't about those small businesses. It's about the big ones, the ones that have a huge impact on the world: Goldman Sachs, Boeing, Google, Apple. The ones that have the power to really make a difference, for better or for worse.