Goldman Sachs abandoning kittens in lower Manhattan was a pretty sick trick. But it seemed to serve as a metaphor for how many Americans perceive the firm: they leave us to perish while they uncork the champagne. Case in point: it just came out that Goldman Sachs didn't think it was paying execs quite enough while the rest of America is suffering. So it doubled the pay of CEO Lloyd Blankfein to a dizzying $19 million. On top of that little fortune, he received $27 million from investments in private equity and hedge funds managed by the firm. Party time!
The Sisters of Saint Joseph of Boston, Sisters of Notre Dame de Namur, the Sisters of St Francis of Philadelphia and the Benedictine Sisters of Mt Angel -- who all happen to hold investments at the bank - have signed a proposal to review how it doles out the cash to execs following revelations that the top five Goldman fatcats collectively raked in nearly $70 million last year. Never mind that the firm's earnings plunged 38 percent.
Goldman Sachs has become the emblem of the excesses of the financial sector. Charges of fraud and betting against its own clients have tarnished its reputation -- but they don't seem to dampen its greed. But the question is, are we so deadened to those excesses that we shrug our shoulders and accept them as normal? If we do this, we are acknowledging our distrust in society's rules and our lack of faith in government to correct imbalances that harm us all. And that's not good for democracy. The famous revolving door between Goldman Sachs and the halls of government slowly breaks down our trust and gives credence to the Reagan-inspired anti-government stance that allowed the financial sector to turn from a servant of the people into a predator. As Roosevelt Institute Senior Fellow Rob Johnson wrote on this blog, "Goldman Sachs' uncontested success blurring the boundaries between market and state is symbolic of a tremendous malfunction in finance, politics and civil society."
Those boundaries need to be reestablished, but when Goldman lobbyists write the rules of financial regulation, they all but disappear. The continued compensation bonanza shows that they don't give a hoot what the public thinks: they are counting on that money to buy them more than yachts. And it will take more than a prayer to stop them.
Lynn Parramore is the editor of New Deal 2.0, Media Fellow at the Roosevelt Institute fellow, co-founder of Recessionwire, and the author of Reading the Sphinx.
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