On CNBC this week, Goldman Sachs CEO Lloyd Blankfein expressed dismay that Bernie Sanders has no interest in 'compromising' with Wall Street. (photo: Adam Jeffery/CNBC/Getty Images)
06 February 16
Lloyd Blankfein charges for investment advice — but his political wisdom is free
loyd Blankfein, Chief Executive Cephalopod of Goldman Sachs, issued a warning about the Bernie Sanders campaign this week.
"This has the potential to be a dangerous moment," he said on CNBC's Squawk Box.
The Lloyd was peeved that Sanders, whom he's never met, singled him out in a debate last week. "Another kid from Brooklyn, how about that," he lamented.
He ranted about how frightening it is that a candidate like Sanders, who seems to have no interest in "compromising" with Wall Street, could become so popular.
"Could you imagine," he asked, "if the Jeffersons and Hamiltons came in with a total pledge and commitment to never compromise with the other side?"
The slobbering Squawk Box hosts went on to propose firing all the academics in the country, because clearly it is their fault that so many young people are willing to support a socialist.
"I'm ready," said co-host Joe Kernen, "to send my daughter to Brigham Young or Liberty or something."
Then Kernen, Becky Quick and Blankfein all made jokes about how socialism doesn't work and how all those Berniebots should take a trip to Cuba.
"The best real-time experiment is, I went to Cuba," said Lloyd.
"I haven't been," Kernen said proudly.
"You should go," said Lloyd. "You go there, stop in Miami and you just see the Cuban community and how much wealth they've generated.
Of course the politics of Sanders is closer to what you'd find in Sweden or Denmark than Cuba, but they were rolling by then.
Lloyd added that the current popular discontent with Wall Street was just something that happens randomly, like the weather. "There's a pendulum that happens in markets and it happens in political economy as well," he said.
He added that he didn't want to pick a candidate because "I don't want to help or hurt anybody by giving an endorsement."
For people who so very pleased with themselves for ostensibly being so much smarter than everyone else, people like Blankfein are oddly uncreative when it comes to deflecting criticism.
The people who don't like them are always overemotional communists. All those young people who are flocking to the Sanders campaign? Dupes, misled by dumb professors who've never been to Cuba.
And their anger toward Wall Street? Causeless and random, just a bunch of folks riding an emotional pendulum that brainlessly swings back and forth. Don't take it personally, people are just moody that way.
Bill Clinton apparently agrees. A story about the former president's thoughts on the subject appeared in Stress Test, the vile battle memoir of the financial crisis penned by infamous Wall Street toady and former treasury secretary Tim Geithner.
In the book, Timmy goes on at length about how sad it made him that the public was so upset about the bailouts and other policies he engineered to make the Blankfeins of the world whole again. Looking for a way to not feel so hated, he went to Clinton to "discuss the politics of populism with the master practitioner."
It's an important detail. Geithner's instinct for figuring out how to deal with ordinary people was not to go talk to any, but instead to talk to someone who'd had success marketing himself to them.
This squares with accounts I heard after 2008, about the Treasury Department in the Geithner years. In one story I remember, it took a presentation from a major retail company about expected lower holiday spending levels to enlighten Geithner's staff as to the level of economic pain in the population. Until they saw the graphs from executives, they had no clue.
Anyway, according to his book, Geithner got good advice from Clinton. The former president advised him to press for tax hikes on the rich, but to "make sure I didn't look like I was happy about it." Then Clinton added that Timmy shouldn't take the public-anger thing too hard:
"You could take Lloyd Blankfein in an alley and slit his throat, and it would satisfy them for about two days," Clinton said. "Then the blood lust would rise again."
Ordinary people aren't just overemotional and dumb, they're also zombies! They don't have grievances, just blood lusts.
The attitude shared by Lloyd and Geithner and Bill Clinton is that the mindless quality of public discontent means that there's no point in worrying about it, or negotiating with it. This is funny because Blankfein is the one complaining that people like Sanders and his followers don't want to compromise with him.
Lloyd apparently thinks politicians should naturally reside in a state of more or less constant accommodation with Wall Street. Thomas Jefferson would have compromised with us, he says!
One can assume that his model of a "compromising" politician is Hillary Clinton, who took $675,000 to give three speeches to his company. "Look, I make speeches to lots of groups," Hillary explained. "I told them what I thought."
Asked by Anderson Cooper if she needed to take $675,000 to tell Goldman what she "thought," Hillary shrugged. "I don't know," she said. "That's what they were offering."
Even more significant than the $675,000 Hillary took from Goldman, or the $30 million in speaking income she and her husband received combined in the last 16 months, is the account of what Hillary apparently told Goldman she "thought" during those speeches.
According to Politico, who spoke to several attendees, Hillary used the opportunity to tell the bankers in attendance that the "banker-bashing so popular within both parties was unproductive and indeed foolish."
She added that the proper attitude should be, "We all got into this mess together, and we're all going to have to work together to get out of it."
This squares with Geithner's account of what Bill Clinton said. The former president told Geithner that slitting Lloyd's throat would only satisfy "them" for about two days. Them was all those pissed-off regular people, and the we or us were politicians like himself and Geithner.
In her speech, Hillary's we included the executives in her audience. Her message was basically that It Takes a Village to create a financial crisis. This was the Robin Williams breakthrough scene in Good Will Hunting, with Hillary putting a hand on the Goldmanites' shoulders, telling them, "It's not your fault. It's not your fault."
But it was their fault. The crash was caused by a tiny handful of people who spent years hogging fortunes through a bluntly criminal scheme in the home lending markets. The FBI warned back in 2004 of an "epidemic" of mortgage fraud that could have an "impact as big as the S&L crisis," but those warnings were ignored.
What the FBI was talking about back then mainly had to do with smaller local lending operations that were systematically creating risky home loans, falsifying credit applications to get unworthy borrowers into mortgages they couldn't afford.
What they didn't understand back then is that the impetus for that criminal activity was the willingness of massive banking institutions on Wall Street to buy up those bad loans in bulk. They created a market for those fraudulent loans, bought billions' worth of them from local lenders, and then chopped up and resold those bad loans to pension funds, unions and other suckers.
The "village" didn't do this. Lloyd Blankfein and his buddies did this. (Goldman just a few weeks ago reached a deal to pay a $5.1 billion settlement to cover its history of selling bad loans to unsuspecting investors, joining Bank of America, Citi, JP Morgan Chase and others).
People aren't pissed just to be pissed. They're mad because a tiny group of crooks on Wall Street built themselves beach houses in the Hamptons through a crude fraud scheme that decimated their retirement funds, caused property values in their neighborhoods to collapse and caused over four million people to be put in foreclosure.
And they're particularly mad that they got asked to pay for this criminal irresponsibility with bailouts funded with their tax dollars.
What the Clintons have done by turning their political careers into a vast moneymaking enterprise, it's not a value-neutral activity. The money isn't just about buying influence. The money also physically moves people, from one side of an imaginary line to another.
You will never catch Bernie Sanders standing in a room as a paid guest of a bank under investigation for ripping billions off pensioners and investors, addressing the audience in the first-person plural. He doesn't spend enough time with that kind of crowd to be so colloquial.
The Clintons meanwhile have by now taken so much money that when they stand in a room full of millionaires and billionaires, they can use the word "we" and not have it sound odd. The money has irrevocably moved them to that side of the ropeline. On that side of the line, public anger isn't legitimate, but something to be managed and waited out, just as Lloyd suggests.
When people like Blankfein tell us they don't take criticism personally, what they're saying is that it's too brainless and irrational to be taken any other way. He means to be insulting. And we should all take it that way.