More Dogs on Main Street
November 20, 2009
As the nation’s economy is trying to sputter back to life, there are touching stories of great generosity out there. Acts of kindness abound, as those who still have some security attempt to help those who have lost theirs. A homeless vet in California was given a house to live in; medical bills for a family crushed by an unexpected illness get paid by others. It really gives you some faith in humanity. But among all the stories of good works out there, I can’t think of any that is as moving as that of Goldman Sachs.
Goldman Sachs is one of the few Wall Street banking houses to survive the great crash. They survived in large part because the taxpayers shoveled an uncountable amount of money into AIG, which owed an equally uncountable amount of money to Goldman. AIG paid Goldman back, and collapsed. Goldman, which had placed bets on AIG going down, cashed in those chips, but was happy to accept the payment from AIG anyway. Goldman made huge profits this year, and has a pool of $20 billion (with a "b") from which to pay bonuses to its employees who have performed so well under trying conditions. Wall Street as a whole this year has made nearly $60 billion in net profits. That’s nearly double the amount it made in the good old pre-crash days of 2007. A rising tide lifts all yachts, as they say.
Anyway, Goldman, the head profiteer, has been receiving some criticism of late. So the head of Goldman, Lloyd Blankfein, has been on a charm offensive, trying to defend Goldman’s image. In one speech recently, he said, "We’re doing God’s work" in helping to spread capital around. "God’s work." That’s a real quote. Then last week, he did the unthinkable, and apologized for the role Goldman played in the financial collapse. He said, "We participated in things that were clearly wrong and we have reason to regret and we apologize for them." Blankfein did not state what "things" on advice of counsel. He did not provide an address where you could submit your claim.
Well, I don’t know about you, but I was deeply moved by that. It’s not often that the head of a company whose efforts wrecked the world’s economy, and racked up record profits in the process, will buck up and take responsibility for it. God works in mysterious ways. His show of humility brought a tear to my eye, and I felt the need to respond to Lloyd on a personal basis:
As I struggle to adjust to a life in which cat food plays an important nutritional role, I have to say that I was touched to read that Goldman Sachs is sorry for what has happened. I know the apology is sincere because you didn’t use the passive voice. You could have said, "Mistakes were made. Dreams were crushed. Lives were ruined. Record profits were made and bonuses were paid." But no, you came right out and said that "we" had been naughty. It was not clear if "we" meant Goldman Sachs in a sort of general way, or if there were some specific officers and directors who would be held accountable. Just kidding.
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I saw on TV the other day that as an act of contrition, you are going to take $500 million (with an "m") from your billions (with a "b") in profits and do some philanthropic work. This benevolence appears to be a program that will stretch over five years, and consist mostly of making loans, at market interest rates, to small business you normally wouldn’t let past security to get to the elevator. The saints must be weeping. If that isn’t doing God’s work, I don’t know what is. You probably spend that much on postage.
So many charities waste their efforts running free medical clinics in Third World places like Africa or Arkansas. Their efforts are noble, but the people there are still sick. Who knew that that $100 million a year in market-rate loans could relieve all that suffering?
I’m not sure what you could do to rectify the situation. You said you did things that were clearly wrong and regret them. That doesn’t quite replace the half of my life’s savings that vanished a year ago. It doesn’t do a whole lot in terms of replacing the trillion dollars of tax money that has been thrown at the crisis. At least you’re making some money on it all.
But you said you are sorry, and I guess we have to take you at your word.
It’s the thought that counts.
Tom Clyde served as Park City attorney in the 1980s and is the author of "More Dogs On Main Street." He has been a columnist at The Park Record for more than 20 years.