(Quite sharp from the gray lady.)
NY Times, November 22, 2009
Editorial
Goldman’s Non-Apology
“Certainly, our industry is responsible for things. We’re a leader in
our industry, and we participated in things that were clearly wrong and
we have reasons to regret and apologize for.”
—Lloyd Blankfein, chairman and chief executive, Goldman Sachs, Nov. 17,
2009.
•
We’ll give this to Mr. Blankfein: On some level, he seems to understand
that an apology is in order. But his remarks do not come close to an
apology. Even if he had said, “we’re sorry,” it would have been hollow
since he never actually said what he was sorry for (“things” doesn’t cut
it) or to whom he was apologizing.
Outside Wall Street, those blanks are not so hard to fill in. It is
widely and correctly understood that Wall Street, with Goldman as a
leader and with regulators in thrall, helped to inflate and profited
from a credit bubble that burst and cost tens of millions of Americans
their jobs, incomes, savings and home equity. American taxpayers
continue to stand behind the bailouts and other government interventions
that have stabilized the financial system, including Goldman, enabling
the firm to post blowout profits in 2009 and to set aside $16.7 billion
for bonuses so far this year.
Goldman does not see it that way. It says it never really needed
government aid to survive the financial crisis. In that telling,
taxpayer dollars have not helped to generate its post-crash profits, and
anger over bonuses is jealousy over the good fortune of others.
That is absurd. Goldman has repaid its initial $10 billion bailout
allotment, but that is only a sliver of its taxpayer support. The firm
was paid $12.9 billion, for example, in the bailout of American
International Group, and a report by the bailout’s inspector general
refutes Goldman’s claim that it did not need the money. Perhaps the
biggest continuing prop is that the government clearly considers Goldman
too big to fail, which means that taxpayers are on the hook if Goldman
faces the abyss again.
On the day of Mr. Blankfein’s non-apology, Goldman pledged $500 million
over five years — crumbs from its table — to help 10,000 small
businesses. It is hard to take seriously Goldman’s claim that the
program was not motivated by its public relations problems. The money
will be welcomed by the recipients, but if Goldman wants to make a
meaningful contribution, it would have to be in the billions and aimed
more directly at taxpayers.
So, here’s a thought: A multibillion-dollar gift to the federal Bureau
of the Public Debt, which accepts tax-deductible donations to reduce the
national debt. The donation can come from the bonuses; that way, it
would not harm shareholders, because they only get their cut after the
bonuses are paid. Goldman’s tax savings from the donation could help
finance the small-business initiative.
And a contribution might help Goldman ward off the alternative: serious
calls for a windfall tax on bonuses, which would be justified since the
profits they are based on are in large part the result of government
efforts. One way or another, the taxpayers will demand their due, and
one way or another, they just might get it.
Checks can be made out to the Bureau of the Public Debt and sent to
Bureau of the Public Debt, Dept. G, P.O. Box 2188, Parkersburg, W.Va.,
26106-2188.
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