Opinion

Felix Salmon

Fire the lot of ‘em!

By Felix Salmon
November 19, 2009

John Hudson has an interesting round-up of responses to the signs of humanity from Goldman Sachs on Tuesday: I’m definitely the outlier in a sea of commentators saying that they’re tiny, meaningless, and an attempt to deflect attention from the bigger issues surrounding the bank.

Leave it to Charlie Gasparino, then, to veer wildly in the opposite direction:

Goldman is putting aside a whopping $500 million — the largest such donation in company history — to help small businesses.

I wondered if it ever dawned on Blankfein or his partner in this charity binge Warren Buffett — also a Goldman shareholder — that this money may be theirs to do as they please. Such a major donation like this one, I am told by one prominent Wall Street CEO, should have been approved by all shareholders…

The last thing shareholders need is such overt do-gooderism… what say did the rank and file shareholder have in such a major cash layout? None, which should spark plenty of debate among shareholder rights advocates…

I think it’s about time for Lloyd Blankfein to step down and resign as CEO of Goldman, and really start doing God’s work by sparing the rest of us the stupidity of listening to his excuses.

Let’s put this in perspective, here. $500 million is less than a buck a share; Goldman, which is trading at $177, moves more than that on an average day just thanks to market noise. And a large part of the $500 million is coming from the Goldman Sachs Foundation, which already has the money: it isn’t fresh shareholder funds. Blankfein runs a bank making $3 billion a quarter, and Gasparino thinks he should resign over a commitment to spend $500 billion over five years? Very odd.

But clearly calls for resignation are in the air these days, what with Rep. Peter DeFazio calling for both Larry Summers and Tim Geithner to be fired. Maybe it’s the Palin book which is sending everybody scurrying to these corner positions. Whatever it is, it isn’t helpful.

Comments
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The more important issue is that GS took an approach that is blame the victim or deflects from the problem at hand: Namely, that they are saying that small business owners simply need “education,” “training,” etc. There is also money for CDFIs, which is better.

Meanwhile, banks across America are zapping the credit of small business. And GS helped make that happen.

Posted by Bill | Report as abusive
 

“commitment to spend $500 billion over five years? Very odd.”

Typo.

Posted by zach | Report as abusive
 

Agree with Bill above. Emotionally, I think a lot of us just want to reboot, and control-alt-delete isn’t apparently doing anything, so we are yelling for things like hit the power button or even take out the neighborhood transformer.

Posted by SelenesMom | Report as abusive
 

Oh PS — I went to school with a lot of people who now work at GS, as did many other small business owners. Not that they were the class dummies or anything, but also it\’s not like Goldman hired the top 25 people out of each top school, left the next 25 for McKinsey, and now here comes brand manager jobs and small business bringing up the rear.

Posted by SelenesMom | Report as abusive
 

Felix, the whole world has been headed for corner positions for the last year. Look at just about any election result around the world; look at the invention of the non-abortion-related conservative protest in the US.

I kind of see what Gasparino is getting at, but GS, when it went public, made a point that it intended to continue with its history of spending money on its conception of social projects — under Paulson, that tended to be environmental stuff, under Blankfein more educational stuff — and that, if you didn’t like that, you were welcome not to buy the stock. I appreciate the idea of a fiduciary duty to the shareholders, but I think Blankfein has the confidence of most of the shareholders, and any minority of shareholders who oppose this sort of thing has effectively “come to the nuisance”.

 

I agree – Gasparino’s hyperbole is just silly.

If you further delve into the math – $500M over five years to help up to ten thousand businesses – it works out to roughly $50 per business altogether.

And that’s from the total amount, before it’s been filtered through these ‘foundations’ and community groups, etc. and ignoring that the bulk of it would be for ‘education’ and the amount that would turn out to be a tax dodge as well. This is the REAL story lost in the noise – it’s just more GS PR BS but it’s enough to impress some of the headline writers.

For some reason it reminds me of that crude saying… something about trying to warm up the ocean by peeing in it??

Posted by Jessica6 | Report as abusive
 

Jessica, if you divide $500 million by 10,000, you get $50,000, not $50.

Posted by Felix Salmon | Report as abusive
 

I tend to lean more in the GS PR BS direction that Jessica is pointing to — The Economist tells me that GS has set aside $16.7 billion for pay and compensation so far this year…

 

Idiots abound when it comes to anyone currently or once associated with CNBC. Let’s talk to Goldmans shareholders to see if they felt that the same form of betrayal when Buffet and the rest of the Goldman team consulted with our government (and in a few instances actually part of the government)when crafting the bailout of AIG thus saving Goldmans arse. This is a form of embezzlment perpertrated on the American taxpayer. Imbeciles!

Posted by csodak | Report as abusive
 

Many, though not all, Americans are 100% pure imbeciles! It goes without saying that this situation is a problem when we know that “every vote counts”… Viva le Francia!

Posted by jean john jane | Report as abusive
 

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