Congrats Goldman Sachs! You're the New Symbol of Banker Greed
Goldman Sachs earned $3.5 billion in profits last quarter. Also, it earned a huge fucking target on its back.
The prospect of a firm that is alive today literally because of the largesse of recession-addled taxpayers—to the tune of $13 billion in taxpayer dollars funneled to Goldman through AIG, $10 billion in TARP funds, and $28 billion in cheap debt issued by the FDIC—distributing $18 billion in bonuses to its entitled overclass of excrably wealthy employees is beginning to stir the blood of the people, AIG-bonuses-style.
Bill O'Reilly, of all people, railed against the firm last night, calling them "swine," for avoiding federal income taxes last year. A routine insider-trading investigation has gained a good deal of attention because one of the targets was employed as recently as last year at Goldman. And people are making noises about reparations: Janet Tavakoli, president of Tavakoli Structured Finance, wrote yesterday on CNN.com that "U.S. taxpayers should insist that a large part of Goldman's revenues and profits belong to the American public."
Goldman's recovery couldn't have happened at a worse time for the company, coming as it does on the heels of Rolling Stone's mammoth indictment of the firm for engineering, and profiting from, a series of economic collapses over the past 130 years. UPDATE: And here's that story's author, Matt Taibi, laying out new charges in light of Goldman's newfound profits. Its stunning and swift turn-around merely confirms that narrative—that a cadre of plugged-in bankers who migrate in and out of government have gamed the system to enrich themselves. That was all well and good during the gravy years. But as unemployment creeps up and desperation continues to take hold among the poors, it's less and less clear that what's good for Goldman is good for America.
JPMorgan's record-breaking $2.7 billion profit last quarter could take some of the heat off of Goldman as the prime candidate for the next villain of this long apocalypse. But as more banks start recording profits, it will become clearer that what's going on as fairly straightforward harvesting of bailout dollars for private profits—a game that Goldman plays better than anyone, and for which it will serve as a suitable surrogate.
So even if Goldman is not alone, it's still advisable for the firm to avoid any ostentatious displays of wealth and success. Which it's doing fairly well for now. But two circumstances militate against Goldman's ability to keep its head down for long: It employs horrible people who only care about money, and will therefore spend it conspicuously. And it is compelled to publicize the bonuses that it will pay to those horrible people come December, right around the time you will be telling little Donny that Santa Claus had to take the year off. All $18 billion. Lloyd Blankfein—what better name for a villain!—should get ready for his close-up.