Something strange is stirring. Even the young are joining the chorus of concern that this tarnished giant is part of a financial oligarchy that holds the US in its grip, writes Stephen Foley in New York.
Something strange is afoot when Popbitch – provider of a weekly email beloved of students, stuffed full of celebrity tittle-tattle and links to the silliest miscellany of the web – breaks off from such glorious trivia to encourage readers to support GoldmanSachs666.com, a deadly serious website measuring the political tentacles of the mighty investment bank.
Something strange, too, when Simon Johnson, a former chief economist at the International Monetary Fund, becomes a hero of the internet and the satirical comedy-show circuit on cable TV, promoting his theory that the US is in the grip of a financial oligarchy.
The credit-market catastrophe that has plunged the world into recession is everywhere stirring new ways of thinking about how banking relates to the wider world, but nowhere more so than among a generation coming into political consciousness in these searing times. Something is brewing, some argue, that could make the "regulatory-financial complex" something to rail against in the same way that the military-industrial complex was in the Cold War.
And for all the impression it is giving that it has survived the credit crisis with its pre-eminent position on Wall Street intact, this should worry Goldman Sachs. More so than any other firm, it exists at the intersection of politics and high finance, and therefore has most to lose if this nascent movement turns it into the next ExxonMobil or Wal-Mart – firms whose every move could attract protest, and whose reputation could take years to repair.
"It was listening to the news coming out of AIG that got me fired up," says Mike Morgan, founder of GoldmanSachs666.com. "While politicians were screaming about $165m paid out to AIG executives in bonuses, $180bn was walking out the door."
Goldman, incidentally, has abandoned its attempts to shut the site down.
Mr Morgan is referring to the government bailout of AIG, whose collapse would have sent shockwaves through the markets. The Federal Reserve and the then-treasury secretary, Hank Paulson, decided to funnel public funds to AIG, and its counterparties were paid in full. You don't have to scratch far into the internet to find conspiracy theories: Mr Paulson was chief executive of Goldman before going into government; he appointed Edward Liddy, formerly of Goldman, to run AIG; Goldman was AIG's biggest counterparty, receiving $12.9bn from AIG after the bailout. (It says it was hedged and would not have lost even if AIG did go under.)
Mr Morgan is not the sort of young hot head you find protesting against the G8. He is a 53-year-old registered financial adviser from Florida, but he has attracted a handful of volunteers to beef up the website and to amass information on the Goldman alumni network and its power. "Goldman dipped into taxpayer funds via AIG," he says. "Who gets paid off 100 cents on the dollar these days? Only Goldman it seems. It is all about looking at the connections. Where do all the Goldman Sachs executives go? I see them as running the world. They are like the Standard Oil of the last century, too big and too powerful, with people flocking from Goldman to government and from government to Goldman."
It is a point that is being made forcibly by a growing number of people, from the lowliest bloggers to the most respected economists. Mr Johnson's claims of oligarchy are echoed by Nobel Prize winner Joseph Stiglitz, for example, and the notion is going mainstream. The New York Times devoted acres to a forensic investigation of Tim Geithner's diary from when the Treasury Secretary was running the New York Federal Reserve and appeared to have what it claimed were "unusually close ties with Wall Street executives", including those at Goldman Sachs and Citigroup, thanks to his mentor, Robert Rubin, a former treasury secretary who has been a senior figure at both banks.
Goldman has swung into action to try to arrest a public-relations nightmare in the making, and its chief executive, Lloyd Blankfein, knows precisely what is at stake. He has been most outspoken among Wall Street bosses in speeches and newspaper op-ed columns about Wall Street's need to change. At a speech to the Council of Institutional Investors last month, he said the disasters of the past year have been "humbling", and that pay practices on the Street look "self-serving and greedy in hindsight". He has argued that bonus practices should be changed, to reflect longer-term performance rather than one-year profits, which we all now know can be wiped away in future years. But reducing the psychological primacy of the bonus culture on Wall Street does not appear to be on his corporate agenda, and Goldman's first-quarter results revealed it was setting aside $4.7bn (£3.2bn) to pay salaries and bonuses for the quarter – 18 per cent more than in the same period a year ago, despite a 7 per cent fall in the number of staff.
"It is not about what you say, it is about what you do," says Anthony Johndrow, the managing director of the Reputation Institute, a New York consultancy. "Financial services firms cannot simply run a warm and fuzzy PR or ad campaign. The challenge is to find a way to make a statement and to address the trust that has been violated, to promise action that proves the company 'gets it'. The authentic enterprise takes responsibility for its actions and their impact."
Authenticity has become one of marketing's hottest concepts. Advertising executives insist that any message that does not reflect what a company really stands for is doomed to backfire. In the PR world, the "authentic enterprise" is one that understands how changing its image requires changing the fundamental way it does business. For Goldman, its reputation on Wall Street is that it is the smartest, best-connected and most lucrative place to be. Beyond Wall Street, is that enough to satisfy?
Mr Johndrow's Reputation Institute has just conducted research that suggests it is not – far from it. In its annual survey of the public reputation of 153 of the biggest companies in the US, released a few days ago, Goldman has plunged into the bottom six, in with oil companies and Dick Cheney's old oil-services firm, Halliburton. The survey gives a score based on public ratings of the trust and good feelings they have for each firm, and Goldman's rating fell 17 per cent. Only AIG's fell more.
Goldman Sachs's spokesman, Lucas van Praag, says: "We think our reputation is critically important, particularly in our hiring activities. The Reputation Institute survey is mainly focused on retail brands and we are not a retail firm. Although we were disappointed, we were not particularly surprised."
Mr Johndrow explains: "The world of Wall Street is a small world, and up to now it seems executives have considered that the reputations of the banks only really matter to a few people within that world. The reputation of Goldman Sachs versus, say, Credit Suisse, is the most important thing, and its regard for the general public as a stakeholder has been minimal. But now the public has a stake as taxpayers, yet the banks have not yet done anything to acknowledge what that means."
Reputation is an "intangible asset" whose diminution could have profound business consequences, he adds. Public fury can quickly be channelled through politicians into harsh new regulations and restrictions.
And it could, ultimately, hit Goldman's ability to attract the brightest graduates. As Mr Johndrow explains: "When you go back to your home town or your school, it stops being about how many expensive cigars and yachts and mansions you have. Justifying your job involves talking about its wider impact on society."