Hurt us and you hurt the planet, Goldman Sachs CEO says

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.

To many Americans, Goldman has become the preeminent symbol of Wall Street arrogance and greed -- the great vampire squid, as Rolling Stone’s Matt Taibbi famously labeled the firm.

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

Photo: Goldman Sachs CEO Lloyd Blankfein. Credit: Spencer Platt / Getty Images

Comments

[b3sci]

The argument for restoring Glass Steagall is not that banks do nothing of value; it's that they are too important to let them fail all at once (that's why taxpayers had to bail them out). Letting them do whatever they want, then having taxpayers bail them out when they fail is unacceptable. If they are on the public dole, there have to be rules.

[jONNY rEb]

The old, "when a butterfly flutters it's wings..." arguement.

Really, Mr. Blankfein? We already know that you know, that we don't believe you.

If the "social purpose" is to make the the the rest of us take it in the gut while the rich get richer, than you're more of a tool than I thought.

Social purpose, maybe. Social conscience, NO.

[Bob Foolery]

Yes, Goldman Sachs is very important. So important that it has in itself the power to "hurt the planet." That is not a good thing, and breaking it up can prevent hurting the planet, without hurting the planet, though it may hurt Mr. Blankfein.

Mr. Blankfein is confused with the idea that BANKS serve a purpose and the idea that Goldman Sachs is the sole provider.

[Matt Jones]

Too big to fail is too big to exist - period.