Goldman CEO Tells Employees to Tone Down Spending

(AP Photo/David Karp)

Goldman Sachs CEO Lloyd Blankfein is telling employees of the powerful bank to avoid displays of conspicuous consumption, the New York Post reports.

Goldman has faced a spate of bad press of late, including a Rolling Stone article casting it as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money" and a New York magazine piece asking if the company is "evil." (See "The Shine Comes Off Of Goldman Sachs" for more.)

Blankfein appears to be trying to stem the tide by convincing employees to keep a low profile – and maybe put off buying that fancy new mansion until the economy has improved.

"This is a sensitive time for us, and [Blankfein] wants to make sure that we're not being seen living high on the hog," a source told the Post.

Goldman quickly repaid the $10 billion in government aid it received directly from the government. But it also helped orchestrate the AIG bailout that resulted in a $13 billion infusion into the company not long after a Goldman competitor, Lehman Brothers, was allowed to die. The company is now reaping record profits – $2.3 billion in the second quarter alone.

Spurred by outrage over outside bonuses paid at companies that were bailed out by the government, Washington is now considering limits on executive pay.

Goldman's total bonus pool in 2008, when the current economic crisis was in full swing, was $4.82 billion, according to a report last week from New York Attorney General Andrew Cuomo. More than 953 employees were reportedly paid more than $1 million.

[dallasurbanologist]

Let's state the obvious: Carl Marx was correct about Capitalist and their various supporters -- that they simply control the rest of us lesser working souls. No matter the econimic model, the elite do what they desire and pass the costs off to the ALL of the lower classes. What we are learning in the current U.S. is this hard truth: the majority of the middle-class just found out that they have NEVER been as elite as they were led to believed; they too are just drone worker bees. Welcome to the reality! Your "good life" has been taken and now you'll work to you die. Stop thinking you'll retire and simply relax.

[debinok1]

You people are funny. Getting all bent out of shape over the financial industry. The real crooks are in washington. They ALLOWED this to happen. Both parties allowed this, both parties signed off on deregulation and less oversight. You don't blame the child for getting in the cookie jar when you are the one who left it sitting in reach. These people did what our government gave them permission to do. Stop getting mad at the industry for having the permission and get mad at the government over the last 30 years who gave it to them.

[debinok1]

P.S. Don't expect the current government to do anything different. I have yet to hear them say anything about putting those regulations and oversights back in place to protect us from future fiascos like this one. They talk a big game like the "limit executive pay", but there will be no teeth in all that talk. Geez, I voted for this administration and I see what they are doing.

[wzrobin]

You act like Wall Street and the government are separate entities. The one thing that has been made abundantly clear in this whole fiasco is that the whole Republican / Democrat thing is just puppet theater to distract the masses, they both do whatever the banks tell them to do.

[mary-miami]

By all means, please limit executives pay. They're earning outrageous amounts of money in a time of Depression. That is an insult to the common worker.
Thank goodness we have freedom of speech and press, because otherwise we never would have found out about them showing up at the hearings in private jets after laying people off and about their "spa" visits.

[gunnyh1]

Goldman Sachs needs to be brought to its knees and people like Henry Paulson and the others that allowed this gangrape of the economy need to be sent to the chair...PERIOD. Break out the pitchforks...the tar...the feathers....and it will happen before all is said and done.

[grabandgo]

the president and alien head tax cheat turbo timmy are an embarrassment to All hard working, middle class Americans'

[antoniof123]

You know what we are all sick of people like you sore loser get over it.

If you keep this up you will see a blood bath again. In fact I think for the GOP it is too late they will see more loses in 2010.

[robindallas-2009]

Yes, good thinkin'. In the old west, after a bank robbery the clever robbers kept a low profile. Otherwise they would get caught and hanged on the town square. End the private Federal Reserve ponzi scheme. Audit the Fed to see if they are using proxies to buy their own T-bills. End the insider revolving door between the private Fed, the banks, and the US Treasury. The game is rigged. We lose. The robber class wins.

[erasmus111]

by gold_standard August 4, 2009 12:55 PM EDT
Its okay to steal from us, just don't flaunt it.


If you have insurance companies or ANYBODY stealing from you, it's your own damn fault. You ALLOWED it to get to this point to begin with.

[gunnyh1]

Looks like someone is censoring the posts. I guess CBS is scared of offending the big bad bankers too much. Now where did that lynch mob go?

[blindersoff]

Remember that scene in Goodfella with Robert Deniro as "Jimmy". He took the fur coat off the lady and sent them back outside to their pink caddy. "It's in her mothers name", "Didn't I tell you not to buy NOTHIN! But it's in her mother's name!".

[grabandgo]

And the exec's at Goldman Sachs should receive the same fate!

[dwilson59]

Blindersoff

Then you find the two dead in the pink caddy.

[Zaylyn]

Goldman Sachs was the biggest packager and seller of collateralized debt obligations (CDOs), packaging thousands of mortgages together, 75% subprime, yet passing them off as AAA paper. When the market deteriorated, Goldman made profit by selling them short.

And many retirees, mutual funds, and city governments who bought these bonds with assurances of Goldman sales people were badly hurt.

Goldman Sachs also was a large purchaser of credit default swaps (CDSs), many from AIG. Representatives from Goldman placed pressure on Hank Paulson for government bailout funds for AIG. And where did billions of those bailout funds go? To pay off Goldman!

And we the taxpayers are picking up the tab.

Goldman Sachs developed computer algorithms for high frequency trading. As such, they insert themselves in rising or falling stocks, buying and selling with lightening speed and making huge profits.

As a result, the individual investor buys these stocks at higher prices and sells them at lower prices.

Goldman Sachs is profiting from the financial crisis recovery by taking the same huge risks with a bonus-driven culture.

And they have covered this risk by changing their designation from an investment bank to a bank holding company, which enables them to get FDIC protection and almost free Fed money.

So, please tell me how Goldman Sachs? activities and business model benefit our society as a whole by creating financial products that contribute to the growth of American financial industry? What do they do that is valuable to other people? Or does Goldman merely create financial gimmicks to make money for Goldman, leaving the crumbs for the rest of us, and subjecting individual investors to a stock market with a casino mentality?