The head of Goldman Sachs. This produced raised eyebrows even on Wallstreet and subscriptions are cancelled..
The wider public might view investment bankers as ‘vampire squid’, as one commentator put it, but the newspaper of the business world has made him its ‘person of the year’
Hats off to the Financial Times for refusing to pander to lily-livered liberals. The pink paper has opined that its “person of the year” for 2009 is none other than Lloyd Blankfein, chief executive of the widely reviled Wall Street bank Goldman Sachs.
In the parallel universe inhabited by the FT, Blankfein is a hero – a “master of risk”. The FT accepts that Blankfein has struggled to find an effective rebuttal of a deluge of public criticism unleashed on his bank.
But it says the former gold trader from the Bronx has “steered Goldman adeptly through the crisis, betting correctly that the global investment banks would survive the turmoil (with government help) and not be dismantled by regulators”.
The FT’s John Gapper continues: “The bank has stuck to its strengths, unashamedly taking advantage of the low interest rates and diminished competition resulting from the crisis to make big trading profits.”
How charitable. This is the bank that intends to distribute about $22bn in remuneration to its employees this year – more than $700,000 each – at the height of the worst recession since the war. Money, of course, partly earned through government support of the US banking sector paid for with taxpayers’ funds.
And Goldman was the bank widely credited with bringing down the insurer AIG through billions of dollars of collateral calls in September 2008 – all, of course, for sound self-interested business reasons but perhaps with little reference to the broader impact of its actions on the financial system.
Blankfein, who is described by a rival, Morgan Stanley’s boss John Mack, as “smart, really engaged, funny and quick – very quick”, has been tone deaf to the public mood, bizarrely telling the Sunday Times recently that his merry band of bankers were carrying out “God’s work” (a “joke”, his PR man later assured the financial media). In response to a barrage of outrage, he recently made modest changes to Goldman’s widely pilloried compensation policies, shifting certain payments from cash into shares.
Writing in Rolling Stone magazine back in July, Matt Taibbi summed up public anger with Goldman by comparing the bank to a “vampire squid wrapped around the face of humanity”.
Even on Wall Street, not everybody is impressed with the FT’s contrary worldview. The Huffington Post reports that an influential US banking analyst, Christopher Whalen, has cancelled his subscription to the paper.
“Mr Blankfein and his colleagues at Goldman Sachs, in my view, have done more to damage the reputations of global financial professionals than any other organization in 2009, yet you applaud them,” wrote Whalen, founder of Institutional Risk Analytics, in a letter to the FT. “Not only is your suggestion ridiculous and repugnant, but it illustrates to me the fact that the FT is part of the problem in global finance, not as one would hope and expect, part of the solution.”