Tag: Steve Bannon

Why Care About Goldman Sachs?

A note on Goldman Sachs alumni in the Trump administration: “Goldman Sachs” was thrown around enough as an insult during the presidential campaign that it’s perhaps lost its meaning, or become flavorless as anything but a rally flag. So it’s worth taking a second to remember exactly why so many of us on both sides of the aisle are skeptical of the motives of Goldman Sachs ex-employees – including Gary Cohn (chair of National Economic Council), Steve Mnuchin (Treasury Secretary), Steve Bannon (chief strategist), and perhipheral figures like Jay Clayton, Anthony Scaramucci, and Dina Powell (and Bush treasury secretary Hank Paulson).

Goldman Sachs was very involved in the banking crisis of 2008 (the lead-up to which started in 1997). Particularly from 2005-2007, Goldman benefited inordinately from risky investments that collapsed the housing market, at a point when there were ample warning signs that they were unstable. A lot of people who worked there could have raised the alarm. They didn’t. They chuckled and got the money while they could.

Rather than suffering when those bets tanked (the way those of us with mortgages do), they got bailed out to “save” the structurally important banking system. Their leadership never faced criminal charges, even though a lot of really ugly e-mails came out during the SEC investigation that painted a picture of a corporate culture that cared a lot more about making fees for the bank than taking care of clients (acting as fiduciaries) in ways that were dubiously legal and definitely not ethical.

Thanks to the bailout, not only didn’t they lose their money – the top guys used the bailout money to give themselves bonuses. And the guys who didn’t get bonuses whined about it.

That’s the corporate culture we’re talking about. It’s a culture of already wealthy people who think they deserve lots more money no matter whether they do a good job, and don’t care much about anybody else except as marks. (The bank, though not the individuals, finally admitted to as much in a legal settlement last year.)

I want you to watch this video of Goldman CEO Lloyd Blankfein testifying in 2010 in front of congress about how he didn’t do anything wrong and deserved that bonus. It’s three hours long. But you don’t have to watch much of it to see that this is a man with no regrets other than annoyance that anybody would question him.

Sure, it’s possible Trump’s Goldman appointees are nothing like that. I do have a friend that works as a midlevel manager in a peripheral Goldman joint venture (a business that was taken over in a merger) in a totally different state from the main headquarters, doing a totally different thing than the main investment business, and, well, she wouldn’t be my friend if I didn’t think she was a good and honest person.

But what are the odds you could work long hours at Goldman headquarters for years, rise to the very top ranks, make lots of money there, and not internalize this cancerous model of rapacious profit-taking as normal? Has that been your experience as an employee, that it’s easy to build a successful career someplace you fundamentally disagree with, and that your work doesn’t reshape how you view the world? I’m not so comfortable handing over the keys. It went really badly last time.

Details of the recent settlement: “Goldman Sachs Finally Admits it Defrauded Investors During the Financial Crisis,” by Lucinda Shen, Fortune

A summary I wrote of Lloyd Blankfein’s testimony back in 2010 if you don’t feel like watching all of it –

Lloyd Blankfein's Testimony

They are the market makers
who sell what you buy and buy what you sell
indifferent as a weather system.

They are smart money, well trained
with models and degrees and degrees of modeling.
They work with investment banks, 

with other investment banks, with companies
and countries. Not you.
Someone else holds your credit card.

Someone else runs the bank on the corner.
Retail, you're called, They don't take your money.
You'd know if you knew them

which you don't. They have been



except for the bonus.

They never reached out. When the rain hit you
you looked at the clouds.
But clouds are just fog and these are just smart men

who could be more personal. That was their failure
not taking you out. Not buying you coffee.
We should have talked sooner.

The problem is not derivatives. The problem is not
day trading. The problem is not gloating, not greed
not computers or liquidity

or mortages. There is no problem you'd understand
just people. Smart people who did well because.
And were not hurt because.

Would I lie to you
and can you graph a poker face?

My Money’s On Stupid

Trump’s immigration fiasco might be more premeditated than we think” by Kevin Drum at Mother Jones

I think this is an interesting take, but I don’t necessarily co-sign it, for a little reason I like to call recent Gallup polls Bannon has to be aware of. This administration doesn’t seem to care much about doing things people like, and has opted pretty consistently to take the OPPOSITE of a hearts-and-minds approach, so I’m not sure why this one thing would be different.

Frankly, I find it difficult to imagine anyone could do something like this as a “play” rather than an expression of sincerely held belief and conviction. They might think more people agree with them, butt I don’t believe, and have never believed, that they were race-baiting yet not themselves furiously racist. That doesn’t fit with my definitions of “not racist.”

But, you know, just in case: keep an eye on this.