Enough of the Goldman Bashing

Yesterday Goldman Sachs CEO Lloyd Blankfein issued a statement describing the compensation packages for the companies thirty highest paid executives. They will be paid entirely in company stock with added provisions of a five year hold time and conditions for clawbacks (these allow for the shares to be taken back if the executive behaves in a manner contrary to the well being of the company or its clients). These executives will undoubtedly be compensated to a degree unfathomable by most folks, and as such there has been a multitude of assaults on the company by everyone from your local plumber to your congressional representative. Politicians posturing and members of the general public frothing at the mouth have excoriated Goldman to the point Mr. Blankfein had to cancel holiday parties at the company, and even issue a memo to employees to be less public in their personal lives and not gather in large groups for fear of their personal safety.

It’s time to stop this nonsense.

There is a “mob mentality” that has arisen and is being fostered by the politicians and fanned by media reports showing angry protesters screaming into bullhorns. I have seen old west style wanted posters with Mr. Blankfeins image on them along with insulting and slanderous text. Conspiracy theorists paint the company as some sort of satanic cult bent on world domination.

I won’t go into the fact that Goldman Sachs as a company and it’s employees are amongst the most generous supporters of charities in the U.S. and that the past executives of the company are famous for entering into public service upon leaving the company. The latter, instead of being looked upon as a meritorious action, is seen by the conspiracy theorists as evidence of their position as previously stated.

What really set me off on this was a statement made by Senator Bernard Sanders (I-VT) who described the banks compensation plan as obscene.

Here’s my opinion on what’s obscene:
Obscene is a bunch of politicians whose main talent is winning popularity contests, and a bunch of rabble rousing alleged social activists attacking the most successful firm in the ultimate meritocracy. Goldman Sachs has won their position as the best of breed in the highest stakes game on the planet by being the best, hiring the smartest, and maintaining a corporate standard of excellence unparalleled in the history of finance and in fact commerce itself. The fact that it is a private company should be enough for them to be allowed to compensate their employees as they see fit, but not for these politicians or activists.

I would note here that the congress routinely votes themselves pay raises and often does this right before the end of sessions to protect against political fallout. Hardly the high moral ground they want to appear to hold. I would further note to these politicians that Goldman plays within the rules you yourselves set up, if you don’t like the outcome maybe you should do a little more thinking and a little less grandstanding when you make them.

It is worthy of mention that recent statements by Mr Blankfein, the “doing Gods work” comment especially, are not going to win any fans, and add only fuel to the fire. This doesn’t in any way justify the antagonists however. Not liking the public statements of Mr. Blankfein is not justification of a witch hunt mentality.

Goldman Sachs has 31,000 employees, some who do the menial tasks and gruntwork of the corporation. These folks do not have the resources to live behind the walls of the gated communities of Greenwich or the doorman buildings of the upper west side, but they have to fear the backlash the politicians and activists have stirred up.

I urge the detractors and pot stirrers to mediate their comments with restraint and take a little time to analyze the whole picture. Establish a modus vivendi if only for the safety of some of our fellow citizens. Perhaps a little introspection and a little less bluster would be a more appropriate course of action. Sadly this is more likely to be followed by Goldman than by its detractors.

Disclaimer:
The Author and The Wallingford Trust hold positions in GS