Recently, Lloyd Blankfein, CEO of Goldman Sachs, has been admitting the need for regulation while at the same time his bank is fervently lobbying against that regulation. He is reported as saying that "tougher regulation of financial institutions and higher capital ratios at banks are necessary." We are familiar with such misrepresentation from Goldman through their CDOs which were rated as triple A when they were actually toxic and worth nothing after investors bought them. The comparison is an apt one here also.
Blankfein now sees financial regulation as "evolving" as it did during the Great Depression. His audience for such pronouncements were lawyers and bankers in Toronto. Of course, he adds that over-regulation is a threat and that bankers should be made responsible for spelling out the consequences and trade-offs for regulation. Yes, bankers making contributions to their own regulation sounds like a win-win!
He did, however, concede that austerity would not help economic growth and advised against budget cuts but did not mind the inflation of asset prices.
There are many people who believe that Goldman Sachs should be regulated out of existence or nationalized because of their insolvency. There is a real need to get rid of the financial system as it works now and to start over with a clean slate. Jailing a few pivotal bankers would also be nice.
What are we to make of this seeming about-face on regulation by Blankfein? Is he finally realizing that as the economy goes so eventually will the banks? When banks gain control of both the economy and the government, they may be inclined to traverse the whole rocky road until it reaches the dead-end--i.e., the demise of both the economy and the banks that financialized it.
Maybe Blankfein sees this as the future reality for Goldman as their revenues continue to decline, as shareholders begin to demand lower compensation for executives and as employees are being fired on an ongoing basis in order for the bank to maintain its profits. We haven't even mentioned the bank's bad reputation for fraud and continued lawsuits against its fraudulent practices.
It would be a wonderful thing if Lloyd Blankfein could really see what Goldman Sachs has done to the American people.
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