http://www.bloomberg.com/apps/news?pid=20601039&sid=ahD2WoDAL9h0
Arming Goldman With Pistols Against Public: Alice Schroeder
Commentary by Alice Schroeder
Dec. 1 (Bloomberg) -- “I just wrote my first reference for a gun
permit,” said a friend, who told me of swearing to the good
character of a Goldman Sachs Group Inc. banker who applied to the
local police for a permit to buy a pistol. The banker had told
this friend of mine that senior Goldman people have loaded up on
firearms and are now equipped to defend themselves if there is a
populist uprising against the bank.
I called Goldman Sachs spokesman Lucas van Praag to ask whether
it’s true that Goldman partners feel they need handguns to protect
themselves from the angry proletariat. He didn’t call me back. The
New York Police Department has told me that “as a preliminary
matter” it believes some of the bankers I inquired about do have
pistol permits. The NYPD also said it will be a while before it
can name names.
While we wait, Goldman has wrapped itself in the flag of Warren
Buffett, with whom it will jointly donate $500 million, part of an
effort to burnish its image -- and gain new Goldman clients.
Goldman Sachs Chief Executive Officer Lloyd Blankfein also
reversed himself after having previously called Goldman’s greed
“God’s work” and apologized earlier this month for having
participated in things that were “clearly wrong.”
Has it really come to this? Imagine what emotions must be
billowing through the halls of Goldman Sachs to provoke the firm
into an apology. Talk that Goldman bankers might have armed
themselves in self-defense would sound ludicrous, were it not so
apt a metaphor for the way that the most successful people on Wall
Street have become a target for public rage.
Pistol Ready
Common sense tells you a handgun is probably not even all that
useful. Suppose an intruder sneaks past the doorman or jumps the
security fence at night. By the time you pull the pistol out of
your wife’s jewelry safe, find the ammunition, and load your
weapon, Fifi the Pomeranian has already been taken hostage and the
gun won’t do you any good. As for carrying a loaded pistol when
you venture outside, dream on. Concealed gun permits are almost
impossible for ordinary citizens to obtain in New York or nearby
states.
In other words, a little humility and contrition are probably the
better route.
Until a couple of weeks ago, that was obvious to everyone but
Goldman, a firm famous for both prescience and arrogance. In a
display of both, Blankfein began to raise his personal- security
threat level early in the financial crisis. He keeps a summer home
near the Hamptons, where unrestricted public access would put him
at risk if the angry mobs rose up and marched to the East End of
Long Island.
To the Barricades
He tried to buy a house elsewhere without attracting attention as
the financial crisis unfolded in 2007, a move that was foiled by
the New York Post. Then, Blankfein got permission from the local
authorities to install a security gate at his house two months
before Bear Stearns Cos. collapsed.
This is the kind of foresight that Goldman Sachs is justly famous
for. Blankfein somehow anticipated the persecution complex his
fellow bankers would soon suffer. Surely, though, this man who can
afford to surround himself with a private army of security guards
isn’t sleeping with the key to a gun safe under his pillow. The
thought is just too bizarre to be true.
So maybe other senior people at Goldman Sachs have gone out and
bought guns, and they know something. But what?
Henry Paulson, U.S. Treasury secretary during the bailout and a
former Goldman Sachs CEO, let it slip during testimony to Congress
last summer when he explained why it was so critical to bail out
Goldman Sachs, and -- oh yes -- the other banks. People “were
unhappy with the big discrepancies in wealth, but they at least
believed in the system and in some form of market-driven
capitalism. But if we had a complete meltdown, it could lead to
people questioning the basis of the system.”
Torn Curtain
There you have it. The bailout was meant to keep the curtain drawn
on the way the rich make money, not from the free market, but from
the lack of one. Goldman Sachs blew its cover when the firm’s
revenue from trading reached a record $27 billion in the first
nine months of this year, and a public that was writhing in
financial agony caught on that the profits earned on taxpayer
capital were going to pay employee bonuses.
This slip-up let the other bailed-out banks happily hand off
public blame to Goldman, which is unpopular among its peers
because it always seems to win at everyone’s expense.
Plenty of Wall Streeters worry about the big discrepancies in
wealth, and think the rise of a financial industry-led plutocracy
is unjust. That doesn’t mean any of them plan to move into a
double-wide mobile home as a show of solidarity with the little
people, though.
Cool Hand Lloyd
No, talk of Goldman and guns plays right into the way Wall-
Streeters like to think of themselves. Even those who were bailed
out believe they are tough, macho Clint Eastwoods of the financial
frontier, protecting the fistful of dollars in one hand with the
Glock in the other. The last thing they want is to be so
reasonably paid that the peasants have no interest in lynching them.
And if the proles really do appear brandishing pitchforks at the
doors of Park Avenue and the gates of Round Hill Road, you can be
sure that the Goldman guys and their families will be holed up in
their safe rooms with their firearms. If nothing else, that pistol
permit might go part way toward explaining why they won’t be
standing outside with the rest of the crowd, broke and humiliated,
saying, “Damn, I was on the wrong side of a trade with Goldman again.”
(Alice Schroeder, author of “The Snowball: Warren Buffett and the
Business of Life” and a former managing director at Morgan
Stanley, is a Bloomberg News columnist. The opinions expressed are
her own.)
To contact the writer of this column: Alice Schroeder at
[email protected].
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