So what if Goldman’s apostate was a midlevel guy?

Like a lot of people, my initial reaction to yesterday’s Howard Beale-like public rebuke of Goldman Sachs by a departing executive encompassed several emotions. Amazement at his gall. Anger at the specific behavior he described. Eye rolling at his apparent naivete that deep-seated greed could exist at Goldman in the first place. And so on.

It’s also pretty interesting to watch the company’s response. Tellingly, one of the first things their flacks did via the financial press was to hammer the point that the ex-employee, Greg Smith, was just an executive director, not a partner at Goldman. So how could he really know what he’s talking about?

(Goldman CEO Lloyd Blankfein and President Gary Cohn have since released a statement that’s a bit more diplomatic, but still conveys the same overall impression of Smith’s credibility.)

For my money, this idea is utter b.s. I don’t work for Goldman, so why should I care about its chain of command? What I am concerned about is the basic facts surrounding how this company deals with clients and, more broadly, the practical effect Goldman’s practices have on markets and the economy. By this standard, the important thing is what each eyewitness/insider has a vantage point to observe, not what his title is. And we shouldn’t necessarily assume that someone with a better title has better visibility to make good observations.

Case in point: Who do you think spent more time in the course of a typical work day dealing personally with clients, Smith or Blankfein? My money is on Smith, and I mean that as no criticism of Blankfein. It’s just the nature of being CEO of such a massive organization. You delegate and then spend most of your time dealing with your subordinates — ergo, other Goldman people. You obviously have power to dictate how things should work at Goldman, but the people a few rungs down have a really good sense of how things actually work. At big organizations, there’s often a big gap between those two things.

This is why any good beat reporter who covers a big organization values midlevel sources right alongside the senior ones. The midlevel people have perspective to both the outside world and the senior execs, whereas the senior execs to some degree often work in a bubble.