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Saturday, January 9, 2010


Hank Greenberg clearly did nothing legally wrong. Anyone with a brain knew that years ago. Unfortunately he picked his father foolishly because of his real estate feuds with the senior members of the Spitzer family. Why the press has missed this is amazing to me. What Eliot Spitzer did to Hank Greenberg was 100% personal and had nothing to do with the law.

Plus Greenberg's systematic demeaning of his employees is a world famous fact. No amount of his charitable giving can mask the fact that his treatment of his workers made life a virtual hell for thousands of brutalized employees. His treatment of people made them feel terrible about themselves. Even his own two sons quit working for him. But that is not against the law and he never should have been prosecuted.

Hank Greenberg, bright as he is, never really figured out that treating people horribly would have its costs. He is just lucky that the results of his behavior didn't come due until his late 70's. There were thousands of present and former employees who lived for the day they could get even using whatever means were available to them. Well, they did. How much of Greenberg's obituary will be devoted to his insurance business genius and vast charitable giving and how much will be devoted to his legal troubles. My guess is 20% to the former and 80% to the latter.

Goldman Sachs, on the other hand, treats people - their partners, employees, the legal establishment and the Federal Government - superbly and with brilliant foresight as to the LONG TERM results of their actions. Former employees don't spend the rest of their lives trying to get even. Rather they usually keep up a business relationship and their friendships last well beyond their business interactions. Most importantly Gold Sachs people rarely lose their composure. An inappropriate public display of rage that draws attention is definitely considered a possible firing offense at Goldman Sachs. And rightly so. We are a planet of 6 billion people and need to treat each other well for our fragile social contract to work.

Hank Greenberg ruined the lives of the people that worked for him because he thought there would be no costs for the horrible rage he directed at his fellow man when he thought he could get away with it.

He was wrong and his life has been ruined by thousands of people dreaming of a way to get even.

That vast reservoir of good will that Goldman built up drove the current executives to think that they could make the Federal Government pay for their bad trades. And they would have gotten away with it if it had not ruined the world economy.

The last question that NO reporter has asked is how much Hank Greenberg spent out of his own pocket to do his own "getting even" with Eliot Spitzer. If you want to put him on the spot in your next interview, ask him that question.

Graham Arader

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