May the Lloyd Be with You: Blankfein Doing 'God's Work'?

May the Lloyd Be With You

That’s how my friend Jeff described the most recent flap over a banker allegedly using religion to defend the industry.

If you haven’t caught it, Goldman Sachs (GS) CEO Lloyd Blankfein was quoted in the Sunday London Times as saying “we have a social purpose,” in referring to the banking industry. What caught everyone’s eye was the headline: “I’m doing ‘God’s work’. Meet Mr. Goldman Sachs,” something sure to inflame already raw feelings against bankers worldwide. And this comes after John Varley (the CEO of the soon-to-be-considered-vampire-squid of Britain when it shows record profits) invoked religion in talking of banking – in an inappropriate defence of British banks at church.

Quite frankly, Blankfein’s comments are not what I would consider good PR for the banking industry or Goldman in light of the recent flap over Goldman's Lord Griffiths’ inflammatory comments on how Britons must:

"tolerate the inequality as a way to achieve greater prosperity for all."

Remember, this is the same company pejoratively labelled Government Sachs and a vampire squid.

But, what did Lloyd Blankfein actually say? Here’s the quote from the Times.

Luckily for him and his firm, he’s a damn good salesman. He starts with a little humility. He understands that "people are pissed off, mad, and bent out of shape" at bankers’ actions. Goldman played its part in the meltdown that almost destroyed the global financial system. It, like most other banks, lent too much money, made its first quarterly loss for more than a decade last year and ended up taking bail-out cash from Washington. "I know I could slit my wrists and people would cheer," he says. But then, he slowly begins to argue the case for modern banking. "We’re very important," he says, abandoning self-flagellation. "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle." To drive home his point, he makes a remarkably bold claim. "We have a social purpose."

Do you see anything in this quote about God’s work? I clicked on this article expecting to see something outrageous of the Lord Griffiths variety. I don’t. So, why is the headline pointing to these statements as ‘God’s Work?’ I think the headline is reckless and misleading. Its sole purpose is to inflame anti-Goldman sentiment. The language of the article is construed to cast Blankfein and Goldman in a negative light. This is not what I consider the best of journalism in the least.

So, let’s look at the actual merits of what was said.

• “people are pissed off, mad, and bent out of shape” – I’m glad you realize this. But paying record bonuses doesn’t sound like you understand the gravity of the situation or how pissed off people are.
• “I know I could slit my wrists and people would cheer” – exactly. So you should be as meek as a mouse right now.
• “We’re very important" – poor choice of words, my friend. See the previous statement.
• "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle." – YES! That’s the bloody point here. I see this as an accurate statement of the social purpose of investment banking.
• "We have a social purpose." – In fact, you do.

Later, in the same article comes the money quote:

An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker "doing God’s work"

This looks to be a very damning quote, doesn’t it? Three little words. What was the context here? I’d like to see this quote contextualized like the paragraph I deconstructed above.

So, how do I see this issue? Investment banking does indeed have a social purpose. In fact, it is the one stated quite well by none other than Lloyd Blankfein. Whether bankers are fulfilling this purpose and how much they should earn for doing so are wholly different questions (see Bookstaber’s question “Why do bankers make so much money?”). But, trying to turn this statement into a polemic against banking is despicable.

As for Blankfein’s other statements, it does not seem from what has been written that he is demonstrating the necessary contrition or humility in this particular situation which is going to cast him in a favourable light. Those three words could make him infamous. Perhaps he thought he could speak on the record in his own voice and explain away the bailout followed by the record profits and bonuses. If so, he’s deluding himself – and this piece of biased journalism and the dozens of pieces in multiple languages sheepishly picking up on the ‘God’s work’ part show why.

May the Lloyd be with you. And also with you.

Sample sources

Goldman-Sachs-Chef: "Banken verrichten Gottes Werk" – Spiegel (Germany)

Banker mit Gottes Segen – tagesanzeiger (Switzerland)

Goldman Sachs boss says banks do "God’s work" – Reuters

Topman Goldman: banken doen werk van God – NRC Handelsblad (Netherlands)

Goldman Sachs boss: ‘bankers do God’s work’ – Telegraph

Comments

[Tom Armistead:]

Very good point - investment banking does have a social purpose. Very good questions - are "investment banks" fulfulling this purpose? and how much should they be paid?

I would add a question - are "investment" banks involved in activities that do not have a social purpose - that in point of fact undermine the financial system on which society depends?

Then we could start looking at the social utility of CDS, other derivatives, high frequency trading, weekly "huddles," etc. From there the suspicion might arise that the investment banks are blackmailing us by making the performance of their legitimate functions dependent on a continued license to run a casino on Wall St.

The whole God bit is a red herring - the result, whether intended or not, is to introduce questions of anti-semitism into what should be an informed debate about the social purposes of the diverse and esoteric financial operations performed by GS and other investment banks.

Nov 09 07:21 AM

[buyitcheap:]

I understand a rebranding effort is underway Goldman Sancti(?)

Nov 09 08:14 AM

[WMBANZAI7:]

" 'For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away, even that he hath'.

This passage of course refers to the acquisition of more knowledge of the truth as theologians tell us; but the Money Kings of Wall Street like to give its interpretation a little twist in their favor, and say that it refers to the acquisition of more greenbacks, by the big fellows from the little ones.

In fact this class of people appear to hold the opinion that if they would succeed in anything questionable or crooked, there is nothing like misinterpreting the scriptures their own way, so as to apparently justify them in their rascality before the public.

The connection of such men with churches...has done more to spread infidelity and cast ridicule upon the good cause of the church than almost anything else.

The success of this class of gamblers has an influence for evil upon the business world that is little realize, success through their methods being a contradiction to the good old business maxim that 'Honesty is the best policy' and a travesty upon it."

FRANKLIN KEYES ESQ. 1901

Nov 09 08:31 AM

[rich168:]

GS is a trader masquerading as a bank...

The FEDs should have never allowed GS to convert into a bank....
Arrogance is the word...

GS is not a bank
its not lending money to businesses
But it gets cheap funds from the Federal Reserve and use it to BUY commodities and stocks.

Nov 09 08:42 AM

[WMBANZAI7:]

GOLDMAN SACHS, BAILOUT SUPER STARS
(Jesus Christ Superstar)
WilliamBanzai7

Sing along: www.youtube.com/watch?...

VOICE OF ADAM SMITH JR.

Every time I look at you in disgust I don't understand
Why we let Wall Street just get so out of hand.
You could'nt have managed better if you'd had it planned.
Why'd you choose to sink AIG in derivative quick sand?
If you'd come today you would be lynched by a whole nation.
The result of your insatiable greed would be mass extermination.
Don't you get me wrong.
I only want to know.

CHOIR

Goldman Sachs, Goldman Sachs,
Who are you? What have you sacrificed?
Goldman Sachs Bailout Super Stars,
Do you really believe you're what you say you are?

VOICE OF ADAM SMITH JR.

Tell me what you think about your former friends at the top.
Who'd you think besides yourselves's the pick of the subprime crop?
Lehman, was that where it was at? They are not where you are now?
Could Bear have found use for Bernanke's magic mountain, or was that just bad PR?
Did you mean to go like that? Was it a mistake, or
Certainly you know your messy death would have been a record Wall Street breaker?
Don't you get me wrong.
I only want to know.

CHOIR

Goldman Sachs, Goldman Sachs,
Who are you? What have you sacrificed?
Goldman Sachs Bailout Super Stars,
Just who the Hell do you think you are?

Nov 09 09:35 AM

[Graham and ...:]

"Investment bankers have a social purpose."

So do police and firemen. (I consider investment bankers financial "police and firemen.")

But the blue collar versions don't get paid to the point where their wealth is a threat to society.

The white collar versions, unfortunately, do.

Nov 09 10:36 AM

[Old Rick:]

"Investment bankers have a social purpose."

So, according to some, do prostitutes!

Nov 09 02:35 PM