Lloyd Blankfein, the head of Goldman Sachs and Molester Mole imitator, spent a long time last week assuring the U.S. Senate that GS was merely acting as a market maker when it sold crap securities to sophisticated investors (“shitty” was their internal description for these instruments of mass deception).
This was about the best face Lloyd could put on such a loathsome deal: “What the hey, we don’t know why they want our junk but a market’s a market, right?”
This week LB has come to the Lord with his clients, telling them that GS is going to “put clients first” from now on. He acknowledged that his super-rich base is getting a little tired of all the boo-hoo press, and that “the last few weeks have been a difficult and disappointing year [sic] for the firm.”
Well, shut my mouth.
Every time another player in this epically corrupt financial story gets hauled into the spotlight, they promise to do better. “Mistakes were made” is about as close as they come to accepting blame. It’s not me, it’s the market. It’s not me, it’s the regulators. It’s not me, it’s those bad guys down the street. And if I don’t keep my millions, it will be a bad example to those who come after.
Could someone, anyone, simply give away 95% of their ill-gotten gains, put on a potato sack and barbed-wire belt, and drag a sledge of dead mortgages down Broadway? Just for us? Just for some old-timey remorse, some acceptance of responsibility for the millions of innocent lives ruined because they were willing to sell junk to pension funds?
Lloyd’s bonus in 2009 (when the people were bailing him out) was $9 million. This is a serious comedown for a man who made a bonus of $68.5 million in 2007. If he ditched 95% of both, he’d be left with just $4 million in bonuses. From two years. That’s pain, people.
Never happen. Because taking blame would say “I failed.” And failure, on Wall Street, is worse than death.
It’s not everyone. I worked at Fidelity Investments for a time. We had simple rules: no short selling. No conflicts of interest. Customer first, always. And so far, Fidelity’s looking pretty good in all this. In fact, with the exception of about five bad players a while back (the dwarf-tossing bachelor party), Fidelity’s been clean. Fidelity head Ned Johnson is a tough competitor but his good values pervade the shop. It can be done.
I don’t see the Blankfeins of the world changing. We have to keep them honest, and that means making what they did a crime. We did pretty well with a highly regulated banking system for 60 years. Have the past 20 deregulated years been an improvement?
As Ronald Reagan said: “There are simple answers.”
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