Lloyd Blankfein: $100 Million Man?

The folks at Goldman, and Blankfein in particular, really do not get it. From Times Online:

Goldman Sachs, the world’s richest investment bank, could be about to pay its chief executive a bumper bonus of up to $100 million in defiance of moves by President Obama to take action against such payouts.

Bankers in Davos for the World Economic Forum (WEF) told The Times yesterday they understood that Lloyd Blankfein and other top Goldman bankers outside Britain were set to receive some of the bank’s biggest-ever payouts. “This is Lloyd thumbing his nose at Obama,” said a banker at one of Goldman’s rivals.

Bill Gates thought he could treat the government with impunity, and the only reason he escaped the likely outcome of having Microsoft brought to heel was an amazing gaffe by judge Thomas Penfield Jackson (speaking to a reporter while it was still in progress) that led to his removal. Jackson had formed a very dim view of Microsoft’s business practices (no doubt worsened by its conduct in court; the dissembling by Bill Gates was painfully obvious). He was prepared to mete out a harsh sentence, but was replaced by the comparatively clueless Kathleen Kollar-Kotelly.

Too bad no one (save maybe SIGTARP) has the inclination and the nerve to take this crowd on.

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  1. attempter

    One thing we know from history is that a psychopath will never be able to stop short of destroying himself, so as angry as I get I still say through gritted teeth, just keep going there, boys. Just keep doing what you’re doing.

    Obama’s not really doing them (or himself) any favors by letting them run wild until they destroy the system and themselves. If the likes of Obama and Blankfein had any sense of measure, they could probably keep the zombie staggering along for longer than it’ll actually be able.

    (I’m of course not just talking about one obscene “bonus”, but it’s exemplary of the whole demented, doomed program.)

  2. doctoRx

    If Larry Summers was worth $5.2 M for an alleged one day of work a week to DE Shaw, who knows what Mr. Blankfein is “worth”?

    The Quiet Coup continues to demonstrate its existence.

  3. craazyman

    Don’t you whining peasants understand that we live in a different reality than you do. You are swarming crawling ants in the dirt, and we are gods that stride the earth like giants. What can an ant even say to a giant? When you scream, we hear nothing.

    -Jolly B. Banksterino, Director of Something that Requires Talent and Going to Meetings Alot, LLC, LLD, BYOB

    1. i on the ball patriot

      Dear Mr. Banksterino,

      Please accept this Toyota, with a full tank of gas and unmodified gas pedal, from we ants as a gift for Mr. Blankfein.

      Sincerely, and happy motoring!

  4. kievite

    I respectfully disagree with the characterization of Microsoft lawsuit. Microsoft for sure is no saint, but the real question was whether it abused its dominant position to prevail in browsers war. I think the case was really weak and controversial. It might be that there were other charges against Microsoft which have had better chances to prevail in court but the narrow change of killing Netscape was pretty stupid.

    The accusation that bundling IE with Windows had been responsible for Microsoft’s victory in the browser wars was patently false. I would actually support Microsoft position that it was the result of innovation and competition: Windows help system was revamped as html and removal IE would make it useless. Also Microsoft make IE in some areas (including, paradoxically, support of the standards) better then Netscape, beating Netscape on its own turf with IE 4.0. Nobody prevented installing Netscape or other browser on Windows and at the time Netscape has a huge first comer advantage so two browsers configurations were dominant.

    What happened to Netscape is that the revenue from is server division proved to be insufficient for sustainable growth due to some architectural mistakes and weak marketing.

    Attempt to charge Microsoft with releasing IE for free actually bring in spotlight Linux vendors tactic on the marketplace in which Microsoft is in completely opposite position, but still is able to survive and prosper.

    Also Linux already emerged as a dangerous competitor to Windows. It utilized all the advantages on the hardware platform which was standardized and developed by Microsoft (commonly called PC) at great cost (some call this parasitic synergy). It also was competing with Microsoft on zero price which it cannot and would not match. That provided the growing platform for Netscape were it has no competitor. Netscape failed to utilize this advantage and was unable to compete with Apache on the server side of the business.

    All-in-all the case was weak and controversial and defeat of the government at the end was pretty logical outcome.

    1. Yves Smith Post author


      Your reading of the case is counterfactual.

      1. Linux was hardly a significant OS at the time of the suit. And the implications of his finding of fact went well beyond browsers:

      Most harmful of all is the message that Microsoft’s actions have conveyed to every enterprise with the potential to innovate in the computer industry. Through its conduct toward Netscape, IBM, Compaq, Intel, and others, Microsoft has demonstrated that it will use its prodigious market power and immense profits to harm any firm that insists on pursuing initiatives that could intensify competition against one of Microsoft’s core products. Microsoft’s past success in hurting such companies and stifling innovation deters investment in technologies and businesses that exhibit the potential to threaten Microsoft. The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft’s self-interest.

      2. Appeals courts cannot retry the facts of the case. The appeals court would normally have sent the case back to Jackson, but they replaced him due to his impropriety.

      3. Had Judge Jackson not erred by talking to a reporter, the outcome would have been very different. Most commentators think Microsoft got exceptionally lucky when Kathleen Kollar Kotelly, a judge who seemed very much at sea and accordingly was almost timid in her rulings, was selected (supposedly at random).

      1. Eagle

        I’m sure it’s just a coincidence that the judge that didn’t agree with your take on the case was “out at sea” and clueless.

        1. Yves Smith Post author

          I suggest you read the reporting on the case at the time. My view here is hardly controversial.

        2. Francois T

          Why don’t you read both Penfield and Kotelly’s opinions?

          You could then (and only then) emit an informed opinion, instead of insinuating that Yves has an attack of sour grapes.

    2. TigerPaw

      The idea that MS follows standards “better then Netscape” is nothing short of comical. Internet Exploder is known far and wide as taking a very strange approach to standards.

  5. fajensen

    They get it perfectly: They got the nod to loot, pillage and defraud with no consequences so they carry on with impunity.

  6. Kid Dynamite

    i’d be happy to make a friendly wager with anyone here, you included Yves, that Blankfein does not receive $100MM in comp this year. This Times Online story was just more sensationalized journalism from them.

    1. NotTimothyGeithner

      The guy should be in chains and tried for economic terrorism. Whether he is compensated $100 million or $1, its irrelevant. He is a danger to society.

  7. sherparick1

    By the way, the money Lloyd is taking as the Prince of the realm of Goldman Sachs is money that could either be paid out to shareholders (also known as “chumps”) or kept in the bank for its capital base (but who needs capital or retained earnings when one is TO BIG TO FAIL and is able to play with the taxpayers money.

    It was interesting watching John Thune and other Republicans defend “private market” and this looting of companies on the Sunday talk show. A weak President, and opposition that is even more in the tank for the current elite.

    Watching the shows from Davos this past week, it was interesting to see what the elite thought was important (sovereign debt, need for Fiscal austerity, and “avoiding overregulating the banks” and what did not appear as blip on their radar, the massive and perhaps now structural unemployment in the United States. They just assume that the mass of Americans will either remain for the most part passive or will focus their anger on those lower on the economic rung. The United States does not have the social safety net of other OECD countries, and if the Republicans gain a majority in the next election, you can expect that the cuts will focus on the “lazy” and “moochers.” It is a bit of joke that CNBC, which famously did not see the current crisis coming (see Jon Stewart) would be debating what will be the next one and unemployment does not even get a mention. http://skekoa.wordpress.com/2010/01/29/cnbc-2010-davos/

  8. craazyman

    In all seriousness, I wonder if there’s a tipping point when a critical mass of corporate clients, municipalities, states, etc. will simply stop doing business with Goldman Sachs.

    Not that GS is unique in its looting, but any boycott has to have a symbolic target as a metaphor for the whole.

    It may be the American collective consciousness is incapable of principled ethical actions, such as we saw during the civil rights movement. It may be we are too far gone, down the road of money uber alles.

    Still, I would think the GS Board of Directors and some senior executives, if any have a lick of common sense (which may be doubtful given the probable complete possession of their minds by demons) would pause at the thought of such a “tipping point”.

    That their CEO doesn’t seem to is remarkable.

    1. i on the ball patriot

      Seriously, about tipping points …

      Galbraith coined a conceptual term — the Bezel — that describes the amount of money that’s been embezzled where the embezzler hasn’t been caught yet.

      i on the ball patriot has coined a conceptual term — the Ception — that describes the total amount of deception that’s been created in a societal system but has not yet been perceived by all of those who have been deceived.

      It is all inclusive and includes for example; belief in Guardian angels, all criminal activity, husbands and wives cheating on each other, the self deception of drug abuse, the scam that cops protect and serve you when they are really jack booted thugs, the scam ‘rule of law’, financial derivative products, religious beliefs, even little white lie deceptions about how good you look when you really look like crap, etc., i.e., it includes all deceptions within the sphere of influence of the aggregate societal grouping, and, most importantly, it even includes the aggregate generational deceptions that have been passed down through time, like the corrupt creation of the FED, the scam SCOTUS ruling that gave corporations person hood, the purchase of government by the wealthy ruling elite, etc.

      The good news is that I have developed a simple formula to express the effects of the relationship of the individual components involved in the Ception. The formulas is …

      Ception = Deception x Perception

      The formula clearly shows that Ception is a product of Deception times Perception, and that; Deception equals Ception divided by Perception, and further that; Perception equals Ception divided by Deception.

      The bad news is that after careful analysis, and running the formula a few times with varying relatively solid i on the ball derived quantification models, one can clearly see that the Ception is extremely high in scamerica today.

      This is because the ability to perceive a deception has diminished in the population. This is primarily due to unregulated wealthy ruling elite propaganda which has made most people a lot less perceptive and even changed the behavior of the people towards being more deceptive themselves. Unless perception increases rapidly, an unregulated explosive tipping point of pure Deception will be reached where there is nobody left to deceive and the Ception formula no longer applies.

      That could be good news, depending on your viewpoint, because it will cause the total societal system to fail and it will all have to be rebuilt.

      Deception is the strongest political force on the planet.

  9. Esteban

    I agree with Kid Dynamite — $100M will never happen. This is an old tactic — leak the $100M figure so that when it’s announced that Lloyd will be paid *only* $50M, it doesn’t cause as much outrage, i.e., it’s the old false contrast technique — human psychology 101.

      1. VacantHomes

        Good points. Also, it may be that Lloyd is aware that the gig is going to be up at some point in the not-too-distant-future (whether by the oncoming depression or Japan-style malaise), so he’s going for one or two final big bonuses while he still can.

  10. gnk

    Some say the Emperor Nero allowed the great fire to spread in Rome to clear land to accomodate his plans for his Domus Aurea (Golden House).

    It was a fantastic structure – no, more of a compound, it had a 120 ft statue of the Emperor at the entrance, parts of the house were overlaid with gold and precious stones, a giant pool surrounded by buildings… it was one of the most lavish homes in history.

    And what did the Emperor Nero say when he was ready to move in?

    “Good, now I can at last begin to live like a human being.”

    This is the mentality Wall Street elites have. It’s a sickness. I can now appreciate the Robber Barons of old. At least they were creating tangible empires (though often unscrupulously) of tangible results – vast railroads, steel mills, refinieries…

    These modern plutocrats only have office buildings to show for their efforts. And what are these buildings? Locations from where they rob the masses thru backstopped speculation. If they create fires – they come out stronger and expand, like Nero.

    After all, they want to live like “human beings.” I think these guys are mentally unstable. I really do.

    1. NotTimothyGeithner

      Absolutely, at least at the end of the day, the old robber barons made stuff. The current robber barons are nothing more than glorified thieves.

  11. Bob Morris

    Good point on the Robber barons. At least they built stuff. A while back, Barron’s profiled Commodore Vanderbilt. He paid his employees well and after he got a monopoly on railroads he *lowered* prices to more would use them.

    When he died, there was a parade by the common man in NYC, Barron’s said, concluding, it’s hard to imagine that happening to any tycoon now.

    But what’s that gathering strength, starting to howl, why I do believe it’s a populist storm.

    The US has a long history of populism. The Populist Party of the 1890’s had real power for a while and was started by Midwest farmers who were getting screwed by banks.

  12. mock turtle

    Bob Moris observed…”Good point on the Robber barons. At least they built stuff”

    well the bankstas build stuff too

    you just cant touch it,

    or even be sure you see it

    but you may be able smell it as it burns

    if several years worth of community college and

    4 yr university graduates

    go 5 or 10 years with high unemployment and

    under employment

    as inflation renders the dollar worth-less

  13. tpn

    When the house is burning down, one removes as many valuables as they can in as little time as possible–perhaps even before the fire department knows there is a problem.

  14. Francois T

    If this 100M$ is effectively paid to Blankfein, quite a few people may start to appreciate again the wisdom (and quite frankly, the obviousness) of a truly progressive tax system.

    Think Lloyd would be OK with a real take-home pay of say, hmmm, 15 millions?

    *evil grin*

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