William D. Cohan on How Goldman Sachs Came to Rule the World

Tuesday, April 12, 2011

William D. Cohan tells how Goldman Sachs became the most dominant, feared, and controversial investment bank in the world. In Money and Power: How Goldman Sachs Came to Rule the World, Cohan chronicles Goldman's rise and looks at its corporate culture, reputation, and the firm’s cultivation of powerful people. Robert Rubin and Henry Paulson, who both became Secretaries of the Treasury, are two of the powerful people under discussion. Their actions surrounding the financial crisis fueled much controversy and conspiracy theories.


William D. Cohan

Comments [10]

Moona Liza

Great book about an amazing company. I have read two other books about GS and this is superior in terms of (i) comprehensive coverage of the firm's history, (ii) balanced and yet undiluted accounts of the bad behaviours in the firm's history and (iii) clear description of the firm's culture, its evolution and the personalities that shape it from the founding family, Sydney Weinberg, all the leaders up to the current CEO Lloyd Blankfein.

Reading this book educated me about the Street's history as well, from the vantage point of a market leader - how they became one and remained one especially in the recent subprime crisis, where they demonstrated risk management, innovation and cultural strength to ride it out as a winner. The following PR nightmare (investor suits on their CDOs, SEC's settlement, media crucifixion) stole the vindication though, and placed the credit not on the above factors but rather on their alumni network in Government (Hank Paulson, Bob Rubin, etc) who bailed them out via AIG and on their front-running / extortionist trading (cutting value / marking to market of mortgage securities aggressively and calling margin calls on them on their counterparties that arguably triggered the subprime mortgage itself). The balancing argument of course is that they were just protecting themselves and happened to be smart enough to be early in the game in recognising and taking action on the deteriorating mortgage markets.

Dec. 25 2014 11:06 AM
JP Sayles from

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Apr. 13 2011 07:20 PM
Peter Talbot

Seems we tiptoed around the control Goldman Sachs has on the National Democratic Party and it's general control of most Executive side oversight agencies (SEC, etc.) at both Fed and State levels. It isn't just AIG. Paulsen, Bernanke and company all knew that the Government had no choice but to bail them out so they could pay 100 cents on the dollar to foreign sovereign wealth funds: but none of this politically motivated brokering has been

Apr. 12 2011 09:58 PM
Marilyn from NYC

A bit of trivia; Einstein didn't make the comment regard ability to hold two opposing ideas in your head was F. Scott Fitzgerald.

Apr. 12 2011 12:40 PM

Wasn't Paulson caught giving inside information regarding the moves of the Fed to Goldman at a secret, and inappropriate, meeting during the initial stages of the meltdown?

Apr. 12 2011 12:28 PM
Hush hush from NYC

The WJF (Clinton foundation) will be Goldman's newest tenant starting this July at 77 Water St. It's just another fact involving Goldman and their ties that isn't illegal but certainly seems suspect.

Apr. 12 2011 12:16 PM

The reason people hate Goldman is not because it was "more successful" than other firms. It's because it got a free bailout through AIG. All the other banks had to face government intrusion after going on welfare but since Goldman's bailout was "laundered" through AIG they didn't have any penalty. If the government had let AIG fail Goldman Sachs wouldn't be "successful" at all, it would be broke.

Apr. 12 2011 12:10 PM

Paulson may have contributed to the moral hazard, but Greenspan started it in the 1990s by bailing out Long Term Capital Management. Wall Street was prepared to take the hit, but Greenie insisted on a bailout. That seems to have been the beginning of the end. It no longer pays to be responsible, as those who are are constantly robbed to bail out the reckless.

Apr. 12 2011 12:03 PM
bob wade from New Jersey

Hank Paulson was the fellow who convinced American politicians to rescue the banks with all taxpayer monies; he will go down in history as the man who saved the day but at the expense of moral hazard. It was the very same banks, along with GM, AIG, etc..who made terrible decisions that will eventually lead to another magnificent crises. Goldman Sachs is a rogue firm with out many scruples, they also pay out huge bonuses with ill gotten gains.

Apr. 12 2011 11:47 AM

I believe I read that Henry Paulson was required to sell his Goldman Sachs stock upon becoming Secretary of the Treasury. As it was a "forced" sale, capital gains tax were waived. Is this correct? Does it apply to other agencies or departments? If so, it would seem to be a powerful incentive for public service for Goldman employees with significant shareholdings.

Apr. 12 2011 11:14 AM

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