Mr Lloyd C. Blankfein
Chairman and Chief Executive Officer
Goldman Sachs Group Inc.
Dear Mr Blankfein,
Congratulations on the stupendous third quarter results of Goldman Sachs, you announced yesterday. To achieve some of the best ever results in the firm’s long and distinguished history, just one year after its worst crisis, is a remarkable achievement indeed.
We are writing this letter to make a humble suggestion for your consideration.
As we all know, the financial crisis over the last two years has affected millions of people worldwide. We think you would agree that the financial services industry, and therefore Goldman Sachs, had some part to play in this. The United States government had to step in to provide assistance and guarantees to you last year to tide over the crisis.
I would suggest that some humility and just a hint of remorse, might serve the bank well. Arousing public anger, however fair or unfair the anger may be, is not in the bank’s best interests. We suggest that you consider donating the last quarter’s profit of $ 3bn, that the bank made, to a fund that can help those who lost their jobs in the recession or were directly affected. This will not make a significant financial impact on your bank, considering that its just one quarter’s profits. It can however make a significant impact on the lives of many people who have been devastated over the last two years. It would be an extremely graceful gesture of a large hearted organisation – its an opportunity for your bank to demonstrate that it has both those qualities. You may want to consider convincing your shareholders that such a move is their own long term interests.
It is unlikely that your bank will become the most loved organization as a result of the act, but it might prevent it from becoming the most hated.
With best regards
Bloggers Anonymous.
Chairman and Chief Executive Officer
Goldman Sachs Group Inc.
Dear Mr Blankfein,
Congratulations on the stupendous third quarter results of Goldman Sachs, you announced yesterday. To achieve some of the best ever results in the firm’s long and distinguished history, just one year after its worst crisis, is a remarkable achievement indeed.
We are writing this letter to make a humble suggestion for your consideration.
As we all know, the financial crisis over the last two years has affected millions of people worldwide. We think you would agree that the financial services industry, and therefore Goldman Sachs, had some part to play in this. The United States government had to step in to provide assistance and guarantees to you last year to tide over the crisis.
I would suggest that some humility and just a hint of remorse, might serve the bank well. Arousing public anger, however fair or unfair the anger may be, is not in the bank’s best interests. We suggest that you consider donating the last quarter’s profit of $ 3bn, that the bank made, to a fund that can help those who lost their jobs in the recession or were directly affected. This will not make a significant financial impact on your bank, considering that its just one quarter’s profits. It can however make a significant impact on the lives of many people who have been devastated over the last two years. It would be an extremely graceful gesture of a large hearted organisation – its an opportunity for your bank to demonstrate that it has both those qualities. You may want to consider convincing your shareholders that such a move is their own long term interests.
It is unlikely that your bank will become the most loved organization as a result of the act, but it might prevent it from becoming the most hated.
With best regards
Bloggers Anonymous.
Posts
17 comments:
Mr Lloyd C. Blankfein- Sir are you listening?
Wow ... I agree totally with the letter! Show some shame and share some wealth.
I see where you are coming from but the issue of corporate charity is tricky. What about the retiree who saw his life time savings get ravaged but who miraculouly held GS directly or through some index or fund. Would he want the company to give away his hard earned savings? Can the company decide his charitable contributions on his behalf?
But the whole issue sounds like the robber barons of past like Rockefeller, Carnegie, JP Morgan,etc, who are seen as big philanthropists but who got rich through similarly unfair business practices. But in those cases, they gave away personal wealth. In the case of GS, can all the employees be shamed into drawing more modest salaries and putting away the rest of the fat bonuses in this fund that you suggest?
Otherwise the government should come in tax "supernormal" profits in the banking sector. Well then good luck getting reelected... (sorry about the long comment)
Letter probably encapsulates what many of us have would love to see. But I tend to agree with J above. Its not as easy as just being charitable.
The best help in my view probably is to find ways and means to provide avenues for employement. After all if you provide a job you provide a lasting solution to a number of problems.
A direct hit on the face.
PS: Ramesh,You are an unusal combo of business and compassion-salutes!!
@AJCL - Thanks for asking the question.
@thethoughtful train - I am arguing that, from pure self interest, even without the shame, this is worth considering. For if public anger is aroused, no business can survive.
@Sandhya
Dear Mrs Sriram
Thank you for your kind words. As the bonus and salary that bankers draw is already a highly emotive issue, I have refrained from throwing oil on the fire. While you may be petite literally, you are tall and big figuratively and therefore I suggest you must broadcast your name and views loudly !
With best regards
A Fan
Deleted Sandhya's comments by mistake. repeating it here
Mr. K. Ramesh
Needs no Introduction
Dear Mr. Ramesh
Congratulations on your bang-on subject letter to Mr. Lloyd on this very appropriate. But would have been more factual if you would have congratulated Mr.Blankfein for the hefty bonus he and his deserving coleagues are going to draw rather than an advise which is never going to be read
Regards
Not big enough to write a name
@J - I am more arguing that the bank does it out of self interest than charity. The Board must take such a proposal to the shareholders and make them get uncomfortable with the live grenade. My guess is that if they do this, their share price wouldn't get affected at all, so the retiree should be fine.
The windfall tax is appealing, but then since politicians are worse than bankers, it is not safe to trust them with the idea at all. Great idea for the bank to suggest to its employees that they donate their bonuses - that will make them confront the issue (like what happened with AIG executives)
@Exkalibur - Very well said. there's no better way of helping anybody that providing the opportunity of a job. Maybe they can fund self employment ventures.
@athivas - That is so sweet. Thanks very much. My Diwali is made.
I agree that it may be a issue of self preservation for them. There are a lot of angry people (and wackos) out there. It is silly to incur the wrath and illwill of so many....
-J
Why is there so much of venom and vitriol in the media/cyberspace about profits by Goldman - did they profit from drugs or arms trade? No. Did they do any thing illegal (illegal defined as breaking any law technically or intentionally) No. They made profits by trading in investments. All investments have a reward/risk associated with it. If we blame them for 'greed' what about the 'greed' of every T,D&H and every two bit mom and pop investor (we call them retail investors) on the road (aka punters) who took part in this game? What is wrong in making money? By that logic most of the products/services that are sold pander to ones "wants" and gratifying ones vanity rather than cater to a basic need. Disappointing that blogger after blogger seems to be hauling these guys over coals. I am fine with them making profits or rather, it's great that they made profits.
cheers
Kiwi
Hi Ramesh,
Happy Diwali.
I am sure there is more to come this quarter from India when they will sell off some of their holdings (I think).
They first made the markets crash in panic selling to cover the sub-prime losses then bought back the same shares at low values and are now ready to sell I guess (Dollar is also depreciating - makes it even better for them).
I hope that they will repay the US govt some dividend for bailing them out as the US government currently looks like they need bailing out.
@kiwi - Making money is fine of course; but this situation is not "normal". They are making money by taking huge risks. When they win, they make such profits. When they lose, they can't be allowed to go bust and have to be rescued. Not only did Goldman get TARP, they also recovered large dues from counterparties like AIG, who could pay only because of the government bailout. Had it not been for governments stepping in last year, Goldman would also have gone bust. They seem to have learnt little - if they made so much money last quarter, imagine the principal amounts they would have had to invest notionally. What if there was a dip in the markets - we would have been back to the situation exactly of an year ago and a bailout would have had to happen. This is not business. Either we allow financial firms to go bust and take all of us down with them or we limit their risk taking ability so that there can never be another blackmail of being too big to be allowed to go bust.
@Mahesh - I don't think the crash of last year and what followed was deliberate strategy, but good firms like Goldmans have definitely taken advantage of the situation. The fact that governments have been guarantors of last resort and have saved these banks, undoubtedly makes a strong case for a dividend. Its called taxation, and see how they all protest even at the whiff of such a move.
The Wall Street model seems to have evolved into - take risky bets, get bonus or bailout. And at our own Dalal Street, while speculation forms a big part of investment strategy, at least they've stayed away from exotic derivatives and other such stupid schemes that lead to economic ruin.
"Apdiye enakku oru 2 kodi vaangi kudutheenganna :) "
Also get me 2 crores from him please :)
@Ashish - Absolutely right.
@Sri - Ask for more Sri !
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