Dear Mr. Blankfein,
I usually delete emails sent to me as a Goldman Sachs alumnus unread but I was curious to read your recent letter to shareholders since I suspected that it would address the large presence of past and present Goldman employees in the Trump administration, including Steve Bannon who by most accounts is serving as Rasputin to Trump’s Czar Nicholas.
I really have no idea who the typical Goldman shareholder is but I suspect most of them would be okay with Bannon being exposed as a serial killer if the value of their stock increased handsomely in the next quarter, as I am sure it will with a White House having such incestuous relations with your firm.
You put the best possible spin for your second-in-command becoming one of Trump’s top economic advisers:
This past December, then–U.S. President-elect Donald Trump appointed Gary Cohn, then our president and chief operating officer, director of the National Economic Council. Gary was responsible for developing and leading many of the firm’s most important initiatives, and demonstrated a deep commitment to our clients, our people and the culture of Goldman Sachs.
We have been criticized for the fact that some of our colleagues, after long careers at the firm, have moved to work in the public sector. The charge is that Goldman Sachs is able to extract certain advantages that others cannot. In fact, the opposite is true. Those in government bend over backward to avoid any perception of favoritism.
This, of course, is nonsense. Cohn was hired by Trump to gut financial regulations, including Dodd-Frank that was Obama’s weak-tea answer to Wall Street greed and criminality. To illustrate what a con job the Democrats were involved with in “taming Wall Street”, mogul banker Anthony Scaramucci, who was a fundraiser for Obama and then joined Cohn as a Trump economic adviser, has compared a regulation that required investment firms to act in the best interest of their clients to the Dred Scott decision. That’s almost as crazy as Stephen Schwarzman comparing Obama’s proposal to increase taxation on “carried interest” profits to Hitler invading Poland. Did working on Wall Street make these people crazy or were they crazy to begin with?
To reassure your shareholders that you are not complete knuckle-dragging, mouth-breathing Breitbart.com reactionaries, you point out that you have joined the tech industry in opposing Trump’s Islamophobic immigration bans. While nobody would gainsay the right of Microsoft or Goldman Sachs to hire a top software engineer or investment banker from Somalia or Yemen, I doubt that there’s much of a pool of such talent to begin with.
Once you penetrate through other bromides about how Goldman Sachs is the next best thing to the Catholic Workers, you get to the statement that is what they call the takeaway:
Putting aside one’s individual politics, the outcome of the U.S. election raises the possibility of more stimulative tax and regulatory policies, as well as plans for more infrastructure spending. This represents a substantial change in direction for the U.S., and offers many investors and companies a reason for optimism.
A reason for optimism? My god, are you are out of your mind, Mr. Blankfein? Scientists have concluded that climate change is threatening a sixth extinction. You really need to read Naomi Klein or even watch Al Gore’s documentary. By seeing everything through the cash nexus, you are losing the thread.
In 2012, Forbes reported that despite a $50 billion loss, Hurricane Sandy that some scientists link to climate change may end up being “beneficial” for the American economy according to Goldman Sachs. Why? Because, among other things, it will be good for the construction industry that will be rebuilding flooded away houses. This is like saying WWII was a good thing because it allowed American investors to reap huge profits from rebuilding Japan and Germany.
In terms of stimulative tax policies (ie., cuts), the result will be another step in the direction of “starving the beast”, as Grover Norquist put it. Back in 2015, Norquist stated that Trump’s tax plan was consistent with his Taxpayer Protection Pledge. As should be obvious from Trump’s proposed budget, just about everything except the military and police will lose funding. Among the hardest hit victim be the Department of Education, which is facing a 14 percent cut as opposed to the military that is getting a 10 percent raise.
It is through the Department of Education that students receive Pell Grants and other forms of financial aid. Don’t you understand that the U.S. needs an educated work force to support medical research, technological innovation including robotics and other missions critical to the functioning of a capitalist economy including a fresh supply of managers loyal to your values?
We’ve certainly come a long way from the Morrill Acts of 1862 and 1890 that established land-grant universities that established the flagship universities such as the U. of Wisconsin and U. of California, Berkeley. That Trump’s ally Scott Walker, who does not have a college degree, has laid siege to the U. of Wisconsin and that Trump himself has threatened a cut in funding to Berkeley for its stance on protecting undocumented immigrant students should give you some idea of how little interest the “stimulative” White House has in defending the long-term interests of American capitalism.
Furthermore, the assault on environmental standards will only lead to an outbreak of illnesses caused by toxins in the water we drink and the air we breathe. The EPA’s new chief Scott Pruitt has a long record of opposing environmental regulations. Not only is he a climate change denialist; he dissolved the Oklahoma Environmental Protection Unit after becoming the state’s Attorney General in 2014. He also sued the EPA to block its Clean Power Plan and Waters of the United States rule. Aren’t you aware that your children and your grandchildren are vulnerable to illnesses caused by pollutants? Since you have been stricken with lymphoma, I’d think you’d be up in arms over a corporate pollution defender like Pruitt looking after our interests. The U. of California at Irvine conducted a study that linked heavy air pollution in a Canadian area with cancer spikes. They found that the number of men with leukemia and non-Hodgkin’s lymphoma spiked in areas closer to heavy pollution. Is a “stimulative” economy worth all that?
One of the questions I have discussed with leftist friends over the years is why billionaires like yourself have so little interest apparently in the long-term prospects of capitalism. I’ve said in these chats that if I were a hedge fund billionaire, I’d not be able to sleep at night worrying over the threats to future profits posed by an environmental crisis that is being fueled by short-term profit seeking. You seem to symbolize this conundrum more than any member of the capitalist class I can think of. Your inability to understand and act on this speeding, out-of-control locomotive filled with a pandora’s box of ills, including nuclear weapons, has one benefit, I guess. It will prove so alarming that many young people will make the decision I made in 1967 when the war in Vietnam was out-of-control: to become a socialist and change the system in order to prevent a catastrophe not of our making.
Louis N. Proyect (Goldman Sachs 1987-1990)