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Dear Lloyd Blankfein:
You know it, don't you? You know that it doesn't matter. You can't win.
You could shed tears in an hour-long mea culpa on Oprah! You could pay yourself no more than one dollar for the next ten years. You could pledge $5 billion to a hundred of Barney Frank's favorite charities.
And it still wouldn't matter. The public anger towards Goldman is just too hardened. In an economy full of losers, everyone is fixated on hating the winner.
And that kind of hate doesn't just go away. It takes time to dissipate. And, unfortunately, the time-space continuum may be the one thing that Goldman Sachs can neither buy nor control.
I understand that being “an enemy of the people” isn't good for business. After all, I spent a decade at Goldman. And I get what you're doing with Tuesday's big PR exercise. But in fact, too many people get it. Really effective PR rarely tries so hard.
In the past 24 hours, we've had your confession: “We participated in things that were clearly wrong and have reason to regret. We apologize.”
We've had your big act of contrition: the $500 million charitable contribution for America's suffering small businesses and communities. And we've had the benediction: who better to bless your noble efforts than Warren Buffett?
But the exercise is so sequenced and packaged that it's bound to come across as disingenuous, even deeply cynical. And let's face it, the timing stinks.
Just this week, the TARP special inspector general produced facts that appear to contradict your version of the AIG bailout. Looking back, I bet you now wish your CFO had shown a little more humility about Goldman's ties to AIG.
And the TARP report comes out just as another bonus season bonanza is getting underway. It's amazing. According to the New York State Comptroller, 2009 will be a record year for Wall Street profits – even better than 2007.
But while Wall Street booms, Main Street suffers. And the American public knows it. And it knows that you will soon pay your people some of the biggest bonuses in Wall Street history.
The American people not only resent that. They hate you for it. They hate you for taking the TARP money. They hate you for making money in hard times.
And, unfortunately, there's not much you can do with that hate. Almost anything you do, any act of largesse, will be greeted by cries of “too little, too late”. The only sure PR maneuver would be to donate all your profits to the city of Detroit.
And here's the really unfortunate aspect of your current predicament: it's undeserved. Sure, there was some clumsy PR out of Goldman over the past year. But I still can't figure out why and to whom you're apologizing.
“We participated in things that were clearly wrong”, you said yesterday. But what “things” were you referring to? Leveraging up the balance sheet? Selling CMOs and CDOs to sophisticated investors? Trading credit default swaps with AIG?
And what specifically was “clearly wrong” about these things? If it was so clear, I doubt folks at Goldman would have done them.
Not that it matters. You'll never please the public. This is a public that doesn't demand apologies from Franklin Raines or Angelo Mozilo or Barney Frank. Nor does it demand apologies from the millions of Americans who have walked away from their mortgages.
It's much easier for the public to point the finger at the great Goldman conspiracy than to point it at itself.
And that's why, Lloyd, you're apologizing. You're apologizing because the American public wants you to. You're apologizing because you want to have as many friends in Washington as you can.
And you're apologizing because nobody can handle the real truth: Goldman Sachs exists solely to make profits for its employees and shareholders. The rest is just PR.
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