Goldman Sachs CEO recounts the financial crisis


The conventional wisdom when it comes to Goldman Sachs and the financial crisis is that the bank has weathered the storm. It has put the bad news and ill effects behind it, which has allowed its top executive to adopt a more statesman-like persona as he basks in the glow of a fully recovered, rehabilitated bank.

But CEO Lloyd Blankfein was nevertheless asked to relive the crisis recently at the Clinton Global Initiative meeting, when the moderator had him to respond to the two-year anniversary of the Occupy Wall Street protest movement.

One of his responses concerned the controversial bonus payments the firm made in the wake of the crisis. "If we hadn't paid our people we wouldn't have had a stable population at the firm," he was quoted by CNBC. "I work at the company. I don't own it. I'm not entitled to blow it up" by not paying bonuses.

Blankfein also suggested that the country deserved praise for accepting "a higher unemployment rate" over the past few years, even as the government bailed out the banks. "The United States is in a position where the banks are recapitalized and companies are more efficient, not because they kept people on but because they let them go. It was a social decision we made," Blankfein was quoted.

That may seem harsh, but I can't think of an executive who would disagree. All in all, this touches on a broader issue---one that we can't delve into here---about how corporate morals have shifted over the years, in ways that have elevated shareholders over other constituencies, such as employees and communities. A very interesting issue.

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