When John D. Rockefeller was feared and famous as the master monopolist of American industry, he used to hand out shiny new dimes to the urchins gathered around him on the street. Most Americans were not charmed by this philanthropic gesture. Rockefeller became a living symbol of miserly indifference. Nor will Lloyd Blankfein, CEO of Goldman Sachs, win much public affection for his charitable capitalism.
Goldman and the other big dogs of Wall Street are afflicted with the stink of greed, having harvested swollen fortunes from the calamity they caused for the rest of the country. Blankfein made it worse by recently telling a British interviewer that, when you consider all the good things Goldman Sachs does for the economy, "we're doing God's work." God evidently rewards such good works up-front. Goldman executives expect to collect more than $20 billion in bonuses at year's end. The rest of the economy is still waiting for its reward.
To soften the sting, Blankfein announced the firm will devote $500 million to assist small businesses, either as loans or grants to help the little guys learn better managerial skills. More to the point, Blankfein spoke the words that financial titans have avoided. "I apologize." The firm, he acknowledged, did some bad stuff, though he did not say what. "We participated in things that were clearly wrong and have reason to regret." Maybe federal investigators should subpoena Blankfein, put him under oath and demand the details.
Wall Street is belatedly responding to its public relations problem. But this is really a political problem because public anger is gathering force and focus and scaring the bejeesus out of Washington pols. A few days before, throngs of citizens gathered outside the DC offices of Goldman Sachs, chanting and demanding. The demonstration was organized by National People's Action and joined by Andy Stern, president of SEIU. One of their flavorful demands was that Goldman executives should forego this year's bonuses and devote those billions to preventing home foreclosures. Blankfein's alternative looks like a cruel response, given the present reality facing millions of families.
If Wall Street wants really to win back public respect, there is a more substantial gift it can make that does not involve money. Goldman Sachs and the other banking behemoths can take their foot off the Congress and free servile politicians to enact true financial reforms. Call off your lobbyists, let democracy function in behalf of the public interest, not yours.
So far, the legislative results are predicably disappointing and for an obvious reason. The financial-industry lobbyists are swarming over the legislators, demanding clever evasions and egregious loopholes to new laws. After all, Wall Street's gift-giving starts in Washington. Before Goldman Sachs gave its contribution to small business, it gave a bundle to the elected representatives. This wicked charity buys results.