Seeing recruiters on campus from companies that have increasingly been associated with corporate corruption, one might well wonder how Cornell can remain untainted by the financial crisis. In his column last week, “Throw Goldman Sachs Off Campus,” Sun Associate Editor Tony Manfred ’11 proposed one solution. In his view, it would be unethical for Cornell not to ban this “criminal money factory” from recruiting on campus:
“The bank can hold information sessions downtown and conduct interviews at the Courtyard by Marriott, but it should not, in any way, shape or form, be permitted to use this university’s facilities and resources to enlist Cornell students into its system of economic manipulation and moral abjectivity.”
Although many associate the name Goldman Sachs with corporate corruption, in practical terms there is no accusation we can make that cannot also be leveled at the other major financial firms. Sure, Goldman CEO Lloyd Blankfein, who infamously claimed, “I’m doing God’s work,” seems like a textbook scapegoat for corporate arrogance, but the financial crisis was not caused by Goldman employees alone; rather, the increasingly abstract nature of the financial instruments that were being traded, along with many other systemic factors, led to a widespread failure to take risk seriously. And no one, as Manfred asserts, “knowingly [sold] billions of dollars in crap investments to unsuspecting traders.” Although “crap investments” — more precisely, securities based on risky subprime mortgages — were at the root of the financial crisis, many who traded mortgage-backed securities did not even understand what they were dealing with. And because no one really understood how risky these investments were, and because they took for granted that their mathematical models represented reality, they made risky decisions. But when the housing market plummeted and people defaulted on their mortgages, the value of these securities became completely different from what the mathematical models predicted. From this brief explanation, it becomes clear that there are so many people to blame in this mess that singling out one company would be unethical. We could blame the banks who coaxed homeowners with precarious finances into taking out subprime mortgages; we could blame the traders who packaged the risk inherent to these mortgages and sold it to other companies; we could blame the financial engineers who created the mathematical models that led everyone so astray. But to place all the blame on Goldman Sachs, or on any other company, ignores this complex reality. If Goldman was indeed “consciously inflating economic bubbles,” as Manfred writes in his column, then we could indeed ban them from campus with a clear conscience. But this is not the case. Besides, if we ban this company, in order to be consistent, we would need to ban every other company that had a role in the financial crisis. Not only would this be pragmatically difficult, it might also discourage many intelligent, motivated students from applying to Cornell. However, there are other things Cornell can do to make students more contributing members of society. Exposing students to organizations that try to change the world would undoubtedly broaden their perspectives. Rather than banning anyone from campus, why not make a more concerted effort to bring non-profits onto campus? Even if students ended up working for financial firms, mere exposure to more altruistic alternatives during their undergraduate careers might provide them with a concern for society that would contribute positively to the corporate atmosphere. By promoting organizations like Teach for America with the same enthusiasm that it does Goldman Sachs, the University can send the message that making a difference can be just as important as making millions. The best way to respond to the financial crisis is not by assigning arbitrary blame, but by upholding our core values.
Elisabeth Rosen is a junior in the College of Arts and Sciences. She may be consulted at ethicis[email protected] or [email protected] for all ethical dilemmas, sticky situations, faux pas’ and pickles. The Everyday Ethicist appears alternate Tuesdays this semester.
Original Author: Elisabeth Rosen