Lloyd Blankfein has not had far to travel. As we take our table, Goldman Sachs’ former chief executive points to his apartment block across Columbus Circle, the Upper West Side of Manhattan vantage point overlooking Central Park. “Not a long commute,” he says.
It has taken a while to persuade him to do this. Since retiring from Goldman 17 months ago, he has avoided the media. Aside from the occasional tweet — more often than not to needle Bernie Sanders, the socialist Democratic presidential candidate — he has been keeping a low profile.
During his final years at Goldman, Blankfein underwent 600 hours of chemotherapy to treat an aggressive form of lymphoma. It worked.
The 65-year-old is anxious ahead of our lunch that I will not misquote him. He seems to have lingering trauma from an interview he gave to a British newspaper in 2009 in which he quipped that Goldman Sachs was “doing God’s work.” His aside was taken out of context, he says. The ensuing uproar fueled the outcry over the hefty bonuses his bank was paying out just a year after the bailout of Wall Street.
“Some of you guys in the media are doing God’s work too,” Blankfein told me on the phone. Thank you, I replied. “That was also a joke,” he said.
Goldman earned its role as a lightning rod for popular rage over the 2008 financial meltdown. Insiders spoke of a culture in which Goldman would sell its most sophisticated products — often riddled with disguised subprime mortgages — to the most unsophisticated investors, including small pension funds, which they dubbed “muppets.” Then they shorted their own products, leaving Goldman a winner either way.
Rolling Stone described the bank as a “great vampire squid wrapped around the face of humanity.” Blankfein was paid $54 million in 2007, the year before the crash. In late 2008, his bank received at least $10 billion worth of taxpayers’ money.
Since its heyday as the world’s most profitable group of insiders, Goldman has morphed into an almost — I stress, almost — dull bank holding company, chafing against post-crash restrictions on its leeway to trade on its own account. Goldman’s profit margins have shrunk: Its market capitalization is less than a quarter of JPMorgan’s and it has underperformed its peers.
Partly because of its search for new sources of profit, the bank became embroiled in the Malaysian 1MDB scandal. Malaysia’s former prime minister, Najib Razak, was part of a group that is accused of looting $4.5 billion from the state investment fund and spending it on yachts and artworks.
On Blankfein’s watch, Goldman helped arrange a series of 1MDB bond sales, much of the proceeds of which vanished. For legal reasons, he says, he cannot talk about 1MDB. Goldman’s role is still under federal investigation.
We meet at Porter House Bar and Grill, a steakhouse. Blankfein is in a chipper mood. His only complaint is that he has lost feeling in his left thumb after a minor operation. He needs no persuading to order wine.
“What the hell, I’m retired,” he says. He selects a California Pinot Noir. I take a glass of Sancerre. “You know this conversation would be a lot more fun if it was off the record,” he says. I have a hunch it will make no difference.
Blankfein became a senior Goldman executive in 1994, about a decade after the bank acquired his previous employer, the commodities trading firm J Aron & Co. Before long, he was heir apparent to Hank Paulson, Goldman’s then-CEO. In the last few years, globalization seems to be going into reverse. I ask whether he looks back on his early years at the bank as the golden age of globalization.
“We have two poles right now,” he says. “The first is integration — that’s uncorked. We’re not going to get the cork back in. But then there’s also nationalism and tribalism. There are cycles to history. The Roman empire integrated the world, then we went through the Dark Ages and feudalism.”
That analogy sounds unsettling, I say. Are we now entering the new dark ages? Blankfein, who majored in history at Harvard, tends to see things in cycles. “There are patterns. People forget. People die,” he says. “People repeat these cycles. It’s in the nature of things.”
After some banter with the server — “You guys know me: What should I have?” — Blankfein orders a Bibb salad with chunks of bacon. I follow suit. Blankfein dispatches his with gusto.
As Goldman’s chief executive from 2006 to 2018, he was arguably the world’s most influential financier. He was also one of its richest. His net worth today is estimated at $1.1 billion.
Unlike many of his peers, Blankfein came from the wrong side of the tracks. He was born in the Bronx in 1954 and grew up in public housing. His father worked night shifts at the post office. He was always conscious of his background. “If I’m in an elevator [with other bankers], I am thinking about the elevator operator, or thinking of the taxi driver’s name, and where his kids are from,” he says. “I’m not trying to be cute. I feel a little bit outside looking in.”
Does he worry the elevator that enabled his rise is breaking down? Today is hardly a great time to be middle class in America. “People sentimentalize the past,” he says. “Every time someone waxes nostalgic about how much better it was when America was really great, before we felt the need to make it great again — joke! Not God’s work — I remind them of what it was like.”
He explains that the schools were good only because the women who staffed them were blocked from jobs in business and industry. Half the country was segregated when he was born. “When I went to school you couldn’t go to the bathroom because you were afraid of getting knifed. My high school was on triple session: three shifts a day. We didn’t have air conditioning, either.”
I remind him that Sanders sees things differently. “Did you see my tweet exchange with Bernie?” he asks. I did indeed. Last summer, Sanders published a list of “anti-endorsements” of plutocrats who disliked him, which included Jamie Dimon, JPMorgan’s chief executive, and Blankfein. The latter tweeted at Sanders: “He’s always looked down on me because he grew up in a fancier neighborhood in Brooklyn.” Sanders responded: “Actually, my concern has to do with the fact that you had no problem getting bailed out by working Americans.”
Blankfein also played a starring negative role in an advertisement by Elizabeth Warren, the other left-leaning Democratic candidate, to which he again reacted on Twitter. He clearly enjoys getting under their skin — and vice versa. Blankfein says he is a lifelong Democrat and donated to Hillary Clinton’s 2016 campaign.
Our main courses have arrived. Blankfein has ordered a filet mignon, medium-rare — “I feel guilty because I know you guys are paying,” he says. Mine is a salmon steak. I mention that Sanders is now favorite to be the nominee. Blankfein does a mock frown.
“I’m not sure Bernie likes people — he’s ideological,” he says. “But who am I to characterize these things? It’s like Hamlet with Rosencrantz and Guildenstern: ‘You can’t play this flute, how could you play me?’ In my view Bernie could talk to a 6-year-old kid and he is looking over their heads out to the great expanse.”
We are meeting just two days after Trump was acquitted by the Senate. Many Democrats are warning that a second Trump term would jeopardize the U.S. republic, I say. Some, including Michael Bloomberg, the former mayor of New York and a friend of Blankfein’s, have pledged to support whoever becomes the nominee — even if it’s Sanders. Removing Trump is their overriding priority.
“Look, I am a Democrat, but they said those things in a shrill way to raise the stakes on the outcome,” Blankfein says. “I don’t think it’s unreasonable or cynical for a legislator to have said that what Trump did was wrong, and showed bad character, but it was not at a level where we’re going to overturn an election nine months before the next one.”
But Trump is already taking revenge on those who testified against him, I protest. “Bill Clinton, who I supported, perjured himself,” Blankfein replies. “That’s a literal crime. And he was acquitted.”
Just to be clear, I press, you do not share the Democratic Party’s fears about Trump’s autocratic leanings? “Look, it’s crazy not to acknowledge the economy has expanded under Trump,” Blankfein says. “Some of this is related to tax reform. The cheapest stimulus is getting rid of dopey regulations [including on Wall Street]. All I’m saying is that Democrats would have a far stronger case if they conceded what was good.”
Though Blankfein remains as cheerful as when we sat down, I can feel the thermometer rising a little. Who would you pick if it boiled down to Trump or Sanders, I ask. For the first time in our exchange, he pauses.
“I think I might find it harder to vote for Bernie than for Trump,” he says. “There’s a long time between now and then. The Democrats would be working very hard to find someone who is as divisive as Trump. But with Bernie they would have succeeded.”
But you would say that, I reply, because you are a billionaire. Sanders is proposing a wealth tax on people like you.
“I don’t like that at all,” Blankfein says. “I don’t like assassination by categorization. I think it’s un-American. I find that destructive and intemperate. I find that just as subversive of the American character as someone like Trump who denigrates groups of people who he has never met. At least Trump cares about the economy.”
Having demolished our entrées, we both order coffee. Blankfein asks me to add milk to his — his dead thumb is giving him trouble. “It’s the nerve agent,” he says. He weighs up whether to order more wine and decides against. “I can’t imagine how all this is going to come out when you publish,” he says, looking fleetingly concerned. “If I tried to educate people, and said these things in public, people would go [crazy].”
I am not sure how to respond to this. It has been almost 12 years since the Wall Street bailout, I say. Some people argue that today’s populism is partly an after-effect of that moment. Was the fact that Barack Obama chose not to prosecute senior Wall Street figures a factor in the populist backlash?
“Look, you have to commit a crime to go to jail,” Blankfein says. People accuse Wall Street both of “being too clever by half” and of complete stupidity, he says: “Which is it? I think they [bankers] were stupid,” he continues. “Stupidity isn’t a crime. In fact, it’s a defense. Evil intent is necessary in criminal law. If you’re stupid, how did you have intent?”
Many don’t see it that way at all, I reply. They think Wall Street did very well for itself by exploiting the gullibility of others — the poor, the credit-rating companies, less well-connected investors, and finally the taxpayer. “I had a thick skin vis-à-vis the press,” Blankfein says. “But people misrepresent things. I don’t hate them [the media]. People have their job to do. I watch videos of tigers eating antelopes. I don’t hate the tiger. I feel sorry for the antelope. I don’t use the word ‘unfair’ like Trump does. But I think some of it was disproportionate.”
It feels like a good moment to do something uncharacteristic — quote Queen Elizabeth: Why did no one see this coming? “If something goes right, people will say they saw it coming,” Blankfein says, before switching to a very different analogy. “You are like the samurai and you walk the streets and then you have a war and the samurai lose. We drive the risk, people lavish praise on us, then it blows up on your watch. What are people supposed to think about you?”
I am still trying to digest the image of Blankfein and his peers as antelopes. The idea that they are unfairly dishonored samurai is a mental leap too far. But if all the world’s a stage, as Shakespeare says, doesn’t society need the closure of justice, I press? “People need culprits,” Blankfein says. “Who was responsible for this earthquake? Maybe earthquakes just happen. They [post-crash investigators] went through 250,000 of my emails and they found nothing. If I had had my druthers I would have bought more [of what Goldman was selling].”
What does having so much money do to your head, I ask? Blankfein confesses that he remains an “obsessive” investor, but insists money is not an end in itself. Though he has set up a family foundation, he is increasingly fidgety about his lack of a full-time job.
Most of his peers at Goldman ended up in public service. Robert Rubin was Bill Clinton’s Treasury secretary. Paulson did the same job in George W. Bush’s administration. Gary Cohn was economic advisor to Donald Trump. Hence the moniker “Government Sachs” — or “Death Star of political influence,” as Rolling Stone put it. I imagine Blankfein would be an obvious pick for a Bloomberg administration. “I know Mike, I was a customer of his [for Bloomberg terminals],” he says. “I played golf with him. I like him and admire him. We are lucky Mike is paying the personal price of running.”
Wouldn’t life be simpler if you were just able to enjoy being rich, I ask. Even with a wealth tax he would have enough money to ensure his descendants can be full-time philanthropists in perpetuity. Blankfein insists he is “well to do,” not rich. “I can’t even say ‘rich,’” he insists. “I don’t feel that way. I don’t behave that way.” He says he has an apartment in Miami as well as New York. But he abjures most of the trappings. “If I bought a Ferrari, I’d be worried about it getting scratched,” he jokes. “Ken Griffin [the Chicago-based hedge fund billionaire] buys all these houses. He’s out there every minute, calling the office. It can’t make any sense to people outside.”
Since I have a train to catch, I suggest Blankfein’s time must be running short. He laughs: “You’re the one with the job.”
After settling the Goldmanesque-size meal bill, I squeeze in a last question. Does Blankfein share Bloomberg’s view that global warming matters more than anything else? “I’m not so worried,” he shoots back. “I live on the 16th floor.” After a pause he adds: “That was a joke.” I protest that I had already acknowledged that. “Just wanted to be sure,” Blankfein says.
Then, like a gazelle — or is it a nimble medieval warrior? — he vanishes.
© The Financial Times Ltd. 2020. All rights reserved. FT and Financial Times are trademarks of the Financial Times Ltd. Not to be redistributed, copied or modified in any way.