Goldman Sachs CEO: Fiscal cliff a test of trust for U.S. investors
(CBS News) As the so-called "fiscal cliff" -- or deadline to prevent sweeping cuts and tax hike -- approaches, CBS "Evening News" anchor Scott Pelley has been asking America's top CEO about how to avoid it.
Lloyd Blankfein, the chairman and CEO of Goldman Sachs, is among the world's most influential bankers but he rarely does interviews. Goldman Sachs is the most successful investment bank on wall street with earnings last year of 4.4 billion dollars.
Scott Pelley asked Blankfein about the consequences of failure.
PELLEY: If we go over the fiscal cliff, as it's called, what happens to the economy?
BLANKFEIN: Look, if we go over the fiscal cliff it'll be very bad, hugely negative for the stock market which is, you know, a source of people's wealth. People will feel poorer. If we go over for a short period of time and adjust it we can repair some of those things. But what you won't repair is people's attitudes towards the United States as a responsible debtor, and that's very important. If we show that we're so irresponsible that we can't imagine our affairs, people have no recourse but to invest with us today, but they're gonna work awfully hard to find alternatives very quickly.
PELLEY: Is Washington playing with fire?
BLANKFEIN: Yes. Yes, Washington is playing with fire. And you don't get -- it's not like a football game where you get the two minute warning. They don't tell you when you have -- you know, you only get one more chance. And in some ways the fact that we're able to fund ourselves, finance ourselves, people willing to lend to us so cheaply lulls people into a false sense of security.
Blankfein told CBS News if it weren't for uncertainty in Washington, there would be lot of strength in the economy. He said U.S. will soon be the world's largest oil producer, American universities draw the brightest around the world, and American companies have more than one trillion dollars on hand to invest.
PELLEY: If you had the president and the speaker of the House in this room and they asked for your advice, you would tell them what?
BLANKFEIN: In general, I'll tell you I think I'm supportive of whoever is the most likely to lead us to a consensus that will unify the country and get us all moving forward in the same direction. To me, whether the tax rate is 2 percent lower or higher or the cutoff age on some entitlement is one year less or more is secondly or tertiary to the fact that this country is focused on its future.
(Watch: Lloyd Blankfein tells Scott Pelley that entitlements must be contained and some tax hikes are necessary in order to avoid the fiscal cliff.)
- Calif. dollars add to growing Powerball jackpot
- WH Benghazi emails have different quotes than earlier reported
- 8-year-old fights to get WWII vet recognition he deserves
- 5/17: Congress grills acting IRS commissioner: the student and the vet
- Domestic violence victim: "I was a prisoner in my own home"
- 5/16: Texas tornadoes leave path of destruction; Are Afghan troops ready to take over?
- Preview: The student and the vet
- Congress grills acting IRS commissioner
- The power of a uniquely American song
- Boston bombing victim's battle for recovery just beginning
- On the road: The student and the vet
- Military's abuse victims struggle to find justice
- Judgment against alleged Fla. bully surprises everyone
- Motive discovered for Boston marathon bombings
- Texas tornadoes leave path of destruction
- Texas tornado survivor found neighbor's house in backyard