The chairman and chief executive of Goldman Sachs (GS), Lloyd Blankfein, who arguably runs the best cash-making machine that global capitalism has ever produced, and who has been heavily criticized lately over the size of his staff bonuses soon after the bank repaid $10 billion in taxpayer bailout funds, believes banks serve a social purpose and are doing “God’s work.”
“We’re very important,” Blankfein is quoted as saying in an interview with London’s Sunday Times newspaper. “We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle.”
Goldman Sachs posted Q3 earnings of $3.4 billion and plans to hand out more than $20 billion for salaries and year-end bonuses. Blankfein, who admits to being the focus of public outrage, says he understands that “people are pissed off, mad, and bent out of shape” at bankers’ actions.
“I know I could slit my wrists and people would cheer,” he said.
Asked on whether there should be limits to compensation:
” Is it possible to make too much money? Is it possible to have too much ambition? Is it possible to be too successful? ” Blankfein said. “I don’t want people in this firm to think that they have accomplished as much for themselves as they can and go on vacation. As the guardian of the interests of the shareholders and, by the way, for the purposes of society, I’d like them to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation.”
“We didn’t f*** up like the other guys. We’ve still got a balance sheet. So, now we’ve got a bigger and richer pot to piss in,” is how one Goldman banker puts it.”
“So, it’s business as usual, then, regardless of whether it makes most people howl at the moon with rage? Goldman Sachs, this pillar of the free market, breeder of super-citizens, object of envy and awe will go on raking it in, getting richer than God? An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker “doing God’s work.”
Blankfein seems to purposely miss the obvious point here. Apart from the fact that even if he tried to do “God’s work”, God couldn’t afford him (he only made $68 mil in 2007 alone, a record for any Wall Street CEO, to add to the more than $500 mil of Goldman stock he owns), much of the public’s anger over the bonuses is focused on the fact that without government’s bailout at the end of 2008, Goldman would likely have gone under in the ensuing financial crisis. The public correctly understands that greed and largely incompetence by bankers brought the world to the brink of bankruptcy. The Times sums it up best: “Instead of doing the decent thing and jumping out of the nearest window, they turned up cap in hand to governments to hoover up taxpayers’ money to save their skin. Now, just one year on, they are carrying on as if nothing has happened, gambling, and winning, handsomely, with our cash.”