Hurt us and you hurt the planet, Goldman Sachs CEO says
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The best defense is a good offense, or so the old line goes.
That seems to be the playbook at the moment for Goldman Sachs Group CEO Lloyd Blankfein.
Some in Congress, along with heavyweights such as former Federal Reserve Chairman Paul Volcker, want to break up the biggest financial institutions -- and restore the division between commercial banking and Wall Street -- to lessen the risk of another systemic meltdown.
But twice now this week Blankfein has insisted that the country badly misunderstands his company and its contributions to the well-being of humanity.
‘Most of the activities we do, and you can be confused if you read the pop press, serve a real purpose,’ Blankfein said at a conference today in New York, according to Bloomberg News. ‘It wouldn’t be better for the world or the financial system’ to change Goldman’s activities, he said.
Over the weekend the Times of London published a long feature on Goldman that included an interview with Blankfein. He was self-deprecating but wholly unrepentant about the firm’s power and massive profitability.
From the Times:
‘I know I could slit my wrists and people would cheer,’ he says. But then, he slowly begins to argue the case for modern banking. ‘We’re very important,’ he says, abandoning self-flagellation. ‘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.’ To drive home his point, he makes a remarkably bold claim. ‘We have a social purpose.’
That doesn’t wash with Simon Johnson, a finance professor at the Massachusetts Institute of Technology and former economist at the International Monetary Fund.
In a radio interview with Bloomberg News today, Johnson said that Goldman’s assets had nearly quadrupled over the last decade. ‘What have we gained from a societal perspective from Goldman Sachs becoming four times bigger? Nothing,’ Johnson said. ‘Break Goldman Sachs up into four pieces, let them choose how they break up.’
-- Tom Petruno