Letter #4 to Goldman Sachs‘s Lloyd Blankfein
Posted: 25 Jun 2013 07:18 AM PDT
In this book of letters written by ordinary people affected by the fallout from the financial crisis is a chapter devoted to Goldman Sachs starting on page 91.
The fourth letter is from page 95 in The Trouble is the Banks: Letters to Wall Street, edited by Mark Greif, Dayna Tortorici, Kathleen French, Emma Janaskie and Nick Werle, printed in paperback edition by n +1 Research Branch Small Books Series #4, 2012, New York, NY.
Here is letter #4:
To: Lloyd C. Blankfein, Goldman Sachs
Dear Mr. Blankfein,
We are writing to you to interest you in a fantastic new opportunity for you and your loved ones. We are offering you the once in a lifetime opportunity to refinance all of your many homes and/or jets for the wealth–oops, did I say wealth–equity that you are holding in them.
Did you know that the property you bought for millions is actually worth gazillions of dollars under this plan? Yes! Gazillions! With our excellent and trustworthy panel of advisors we can help you truly capitalize on your investments and really make the most of what life has to offer.
What we do is: take the money you “earned” during those fantastic boom years, and invest it in schools, hospitals, housing and jobs for the poor, educate feed and clothe people before their brief yet worthy lives extinguish.
There really is nothing to lose from your side: just take the money backed by the assets of the houses, jets, boats and jewelry, sign your name, and we can provide you with short-term aspirations! It really is that simple. And don’t take our word for it, talk to many of our other customers in the 1% base range. Plenty of satisfaction all round!
With Such Sincerely Tepid Regards,
A Letter to Goldman Sachs‘s Lloyd Blankfein
An Open Letter to Goldman Sachs CEO Lloyd Blankfein
To: Lloyd C. Blankfein, Goldman Sachs
So, I’ve been writing these letters to bank CEOs where I gently rib them about stuff like “being abysmally terrible at their jobs” and “openly stealing from the general populace” and “having the morality of a supervillain” and stuff like that. You know. The usual. And so I was writing one to you about what a terrible businessman you are, and how you had to get your old boss to give you $64 billion because of how badly you suck at being a CEO. Ha, ha. It was going to be funny.
So I was doing research to find more things to make fun of you about. But I kept reading more and more about what a hive of scum and villainy your company actually is, and the more I read the less I felt like being funny. Because, you know, whatever. Any jackass can illegally accept naked short sales or underwrite bonds and encourage people to short those bonds or help Greece hide the true nature of its debt in order to make some extra cash, causing long-term damage to not just Greece but the whole Eurozone and therefore the world economy–which is at risk of going under (again!) partially because of your nefarious deeds (again! I guess you can fool people twice!). Hell, I could do that.
But really it was in finding out that your company’s creation of the Goldman Sachs Commodity Index helped literally starve millions of people that I stopped feeling jokey and started actually feeling pity for you.* That’s the worst thing to feel for somebody, Lloyd, because it means I consider you less than me. You know what? I do!
I’m asking this honestly: How do you sleep at night? I know that sounds all melodramatic, but when I’ve, you know, inadvertently hurt somebody‘s feelings, I have trouble getting any rest at all. I can’t imagine ever getting a bit of shut-eye again if I found out I helped artificially drive up the price of wheat in the greatest year of plenty the world had ever known, pushing 250,000,000 more people to the breaking point and causing food riots in thirty countries.
You must either have a really comfortable bed or a metric boatload of Ambien. Or no conscience whatsoever, and such broken morality that you don’t realize what damage your little money games are causing the planet
No, I’m just playing, I’m sure you’re a great guy. Ha, ha.
New York, NY 10039
Goldman Sachs‘s Predations Redux
“The clear theme is that Goldman Sachs loves its clients with the same lip-smacking love that any predator has for incautious prey. If Blankfein is right that Goldman Sachs is doing God’s work it follows logically that God hates Goldman’s clients.” (quoted from William K. Black, New Economic Perspectives)
What kind of predation does Goldman Sachs engage in? Here’s a brief list from Black’s article:
1. Goldman used derivatives to help the Greek government hide its deficit;
2. Goldman was sued for assisting in Enron‘s control frauds which helped Enron avoid paying taxes;
4. Goldman has had numerous regulatory actions and investigations that culminated in their paying $550 million to settle SEC charges in 2010;
5. Goldman settled with regulators and paid fines for illegal foreclosures and robo-signing forgery;
6. The FHFA had evidence of “pervasive” appraisal fraud by Goldman during its securitiations of subprime mortgages;
7. Goldman disregarded underwriting guidelines in order to increase profits;
8. Goldman purchased fraudulent mortgage originators’ loans and resold them to Fannie and Freddie;
9. Goldman leveraged information in its warehouse lending business to increase its profits;
10. Goldman forced lenders to repurchase defective loans that were still on Goldman’s books;
11. Goldman realized that the securitizations they had helped create were no longer safe and began to “short” the “junk” mortgages;
12. By shorting the market, Goldman profited from its clients’ losses;
13. Goldman knew about the devastation that its securitizations would inflict on the economy but, rather than warn everyone against the coming crisis in the mortgage market, it stayed quiet and profited enormously by shorting the market!
We all now know that no executive of a bank will ever be investigated or prosecuted for the accounting control frauds he committed that resulted in the financial crisis of 2008. Human beings have a craving for justice to be rendered to those who commit fraud and especially to those who have become super-rich by poaching the savings and pensions of others. The human mind is fully capable of making up a recipe to remedy that injustice.
Take, for example, the story from Norse mythology about the father who decided to divide his sons’ shares of his inheritance by the amount of gold each son could hold in his mouth (from The Globe and Mail, Saturday, May 11, 2013, p. R12). Gold as a “mouth-tale” is an effective metaphor and suits our fantastical purposes.
We are often told by the world of commerce that we are all “consumers” no matter what we buy even if it is not digestible as food: we consume resources; we consume products; we consume wealth–all very involved with the mouth and its greedy ingestion of “things.”
What better way for the gods to reiterate their rating of Goldman’s value (long-term avoid) than by how much gold Blankfein can literally hold in his mouth and consume! What better way to depict the character of Blankfein than by his “consuming his own gold.”
A yearly salary of $21 million for 2012 is a lot of gold to “mouth!”
Thus the fantasy world, where there is justice, metes out the painful digestion of justice on those who deserve it.
When Blankfein says that the UK has no other choice but to stay with its austerity plan or it will (here’s the threat): “face a negative reaction from global investors,” he knows that Goldman Sachs will benefit from austerity at the expense of the rest of the public:
Austerity gives Goldman opportunities to privatize and financialize the economy further;
Austerity allows Goldman to continue to be a parasite sucking on the lifeblood of the economy;
Austerity will guarantee more bailouts when Goldman takes big risks and fails;
Austerity will keep the 1% wealthy and the wealth accumulation for the rich will continue apace;
Austerity keeps wealth within the financial sector where Goldman can enjoy it;
Austerity guarantees Goldman’s “rentier” status, i.e., it collects unearned money via debt;
Austerity is financial warfare against labor, against industry and against the government;
Austerity will increase the role of the bank and lead to an increase of power and wealth over the rest of society while citizens suffer from low wages, low or no pensions, high debt and fewer entitlements.
Goldman Sachs as Advisor to the President
How do think things get done by the US government? What information can Obama glean from an investment bank like Goldman Sachs? Do you agree with Chris from Paris that Obama’s “[r]elying on the expertise of a CEO from Wall Street is bizarre?”
Obama cannot run for another term in office and does not need a Super PAC, so what is he learning from Blankfein?
Obama’s bankster bromance by Chris in Paris
The White House is holding a meeting today with a number of business leaders to discuss the President’s economic agenda, including immigration. This is encouraging, as it will be important to get leaders on board with reforming immigration rules.
What’s less encouraging is that the President continues to treat Goldman Sach’s CEO Lloyd Blankfein like he’s royalty.
Even if you put aside the bailout “taker” receiving billions of tax dollars indirectly via AIG during the industry bailout, the relationship is strange. Goldman may not have been the worst offender (or at least, the most costly) of the Wall Street banks responsible for trashing the US economy, but they were certainly in the thick of the problem. Relying on the expertise of any CEO from Wall Street is bizarre.
Lloyd Blankfein, CEO of Goldman Sachs. Source: Financial Times
Even though Obama did plenty of campaign fundraisers on Wall Street, including with Blainkfein, the President should have more consideration for the Americans who carried the heavy load and paid for the sins of Wall Street. This is what happens when Democrats allow the unions to be cut to pieces. The only counter-balance to GOP money is banker money, and lots of it.
More recently, Lloyd Blankfein has been one of the usual voices calling for gutting the social system that most Americans need, like and want. For the Taker-Class like Blankfein, receiving trillions for his industry and billions for his company makes perfect sense and is fair. Your Social Security and Medicare? Sorry granny, you’re just being greedy and you will have to accept cuts.
Lloyd Blankfein wants his money and he’s first in line. Tough luck that there’s little left after he’s grabbed what he wants. Supporting the Blankfein’s of the world somehow is always the first priority of far too many politicians in Washington.
Get it? Blankfein is your better. In another era, he’s the type that would insist on you removing your cap while in his presence and calling him “sir.” (NOTE FROM JOHN: He’s Mary’s ex-fiancé, Richard, on Downton Abbey.) In the UK, he probably would have received a Knighthood by the Queen like Fred “The Shred” Goodwin. The poor guy was born in the wrong century, but he still gets his point across.
Even more recently Blankfein decided to hand out bonuses in the US early – unusually early – so that Goldman workers, himself included, could avoid any tax increases in the US. Yes, the tax dollars that saved their collective asses was so long ago and that memory has escaped them.
Blankfein tried doing the same thing in the UK, by pushing out payouts to avoid higher tax rates – but thankfully, Goldman was called out and forced to retreat. When government wants to do something, and stand up to this kind of corporate greed, it can. But it has to want to.
This brings us to today’s meeting at the White House. Of course it makes sense to round up support for immigration and other issues that will impact business, but why Lloyd Blankfein? I just don’t get it. Even more strange is that like the rest of Wall Street, this is a company that is cutting jobs. It’s not as profitable as it used to be, now that there are a few regulations (that protect taxpayers). The trend in banking is obvious.
Somehow though, year after year, Lloyd Blankfein keeps getting the special treatment and the special invites and the special respect from President Obama. Whether it’s bailout money, or being an expert on job creation (despite being a destroyer of jobs), Blankfein keeps getting the invitations.
Most Americans have had enough of the “Taker Class,” including Blankfein. But Washington just can’t get enough.