Goldman's Blankfein: Not a Socialist

The CEO of Goldman Sachs says he's not a socialist. But his views on wealth distribution have just a bit of that flavor.

Matt Koppenheffer
Matt Koppenheffer
Sep 20, 2012 at 12:00AM
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How do we know that Goldman Sachs (NYSE: GS) CEO Lloyd Blankfein is not a socialist? Because he said so. As quoted by The Wall Street Journal, Blankfein told a Toronto audience in no uncertain terms:

I am not saying... I am a socialist. I am not.

Of course such an admission from a fellow who's been paid more than $30 million over the past two years isn't all that surprising. What's more interesting about Blankfein's admission, however, were the comments that led him to assert that he's not a socialist. Prompted by a question from Royal Bank of Canada (NYSE: RY) CEO Gordon Nixon, Blankfein said:

The two goals of a financial system and an economic system ... should be to expand the wealth of the world and to distribute it fairly ... In the United States, over the last generation or two, we have been much better at generating wealth and much less good at distributing it.

Now that's juicy.

This could, of course, simply be part of Goldman's campaign to shed the evil-bank-cum-vampire squid image that was thrust on it after the financial crisis. On the other hand, this also could be Blankfein -- a very wealthy guy himself and the head honcho at one of the world's premier investment banks -- seriously acknowledging the problems posed by the growing inequality in this country.

What problems, you ask? Consider these to get you started:

  • Economic research has suggested that higher levels of inequality can lead to lower economic growth over the long term.
  • Capitalists don't typically enjoy the effects of political and social instability. Crank up the level of wealth inequality and guess what you end up with?
  • It's not just bankers that should be concerned over inequality. When wealth is concentrated in a small group, there are fewer consumers willing and able to be customers of businesses across the economy.

Don't hold your breath expecting to see JPMorgan's (NYSE: JPM) Jamie Dimon or other prominent bankers to step up and say something similar, but for the 99%ers out there, hey, it's something.

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