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Goldman Sachs Doing God’s Work?

Posted by Larry Doyle on November 10, 2009 12:20 PM |

Do you get the sense that Wall Street in general and Goldman Sachs in particular are getting overly miffed at the disdain heaped upon it by the American public? I do.

In a spirited defense put forth by Goldman Sachs CEO, Lloyd Blankfein invokes the Lord’s name in promoting the virtues of Goldman Sachs’ work. Aggressive move by Mr. Blankfein. The Wall Street Journal highlights this story in writing, Goldman Sachs’ Blankfein on Banking: ‘Doing God’s Work’:

The Times of London’s mammoth 6,900-word piece on Goldman Sachs over the weekend contains plenty of fodder for those that see the investment bank as Wall Street’s top dog, as well as those that see it as a creepy, conspiratorial vampire squid of finance.

But the key quote that’s getting attention comes in Goldman Chief Executive Lloyd Blankfein’s exchange with a reporter after a question 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 shoots back. “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.”

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”

Wow!! Let’s navigate.

I will readily admit that there are numerous individuals on Wall Street who are exceptionally charitable. The charity extends from financially adopting disabled veterans to subsidizing the educational expenses of underprivileged youth to funding soup kitchens and many other stops along the way. In fact, one of the most admirable programs at Bear Stearns was the mandatory charitable giving of 4% of pre-tax earnings by every Senior Managing Director at the firm.

That said, having worked at five separate investment banks I will categorically tell every reader here at Sense on Cents that none of them established ‘God’s work’ as a firm priority. Each and every one of them would promote the virtues of excellence, integrity, respect, and innovation all with an eye toward maximizing revenues and profitability. Not that there is anything wrong with that. In fact, protecting shareholder interests and maximizing shareholder returns should be the goal of  every corporation. In the process of that pursuit, it is incumbent on management to maintain standards of excellence in corporate behaviors. Regrettably, all too often the pursuit of profitability has come at the expense of the behaviors.

The inherent conflicts faced everyday at Wall street firms all too often are resolved at the expense of principle over profit. I’m not sure God would be all too pleased about that.

Over and above that, I was always under the impression that God likes the ‘quiet giver.’ The fact that Mr. Blankfein feels beholden to bring attention to himself and his firm in this manner strikes me as both arrogant and offensive.

What do you think?

LD






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