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'Sorry' still seems to be the hardest word on Wall Street

Goldman Sachs Chairman Lloyd Blankfein seems to consider himself a bystander during the nation's economic crisis and bank bailout.
Goldman Sachs Chairman Lloyd Blankfein seems to consider himself a bystander during the nation's economic crisis and bank bailout. (Pablo Martinez Monsivais/associated Press)
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By Dana Milbank
Thursday, January 14, 2010

Goldman Sachs Chairman Lloyd Blankfein still doesn't get it.

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Unemployment is at 10 percent and Americans are suffering because of the meltdown he and his colleagues helped create. But Blankfein's firm, generously bailed out by taxpayers, has already returned to its ways of greed.

Next week, Goldman, the most powerful firm on Wall Street, will report its bonuses for 2009, and through the first nine months of the year it had set aside nearly $17 billion for compensation -- roughly on par with 2007, when Blankfein was paid a record $68 million as his firm led the country off an economic cliff.

Blankfein, called to Washington on Wednesday to testify before the federal Financial Crisis Inquiry Commission, made it plain that he was done apologizing.

"Would you look back on some of the financings as negligent or improper?" asked the commission chairman, former California state treasurer Phil Angelides.

"I think those were very typical behaviors in the context that we were in," Blankfein replied.

Angelides pointed out that others regarded Goldman's behavior -- in which the firm sold mortgage securities to customers and then placed bets against those same securities -- was "the most cynical" of practices. "It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars," observed the chairman.

Blankfein treated the chairman to a patronizing account of Goldman's function. "That's what a market is," the CEO explained.

"I do know what a market is," Angelides replied sourly. He tried again to get Blankfein to acknowledge that "excessive risk was being taken."

"Look, how would you look at the risk of a hurricane?" the man from Goldman retorted.

"Acts of God we'll exempt," Angelides said. "These were acts of men and women."

But Blankfein seems to exempt himself from the rules of man. Last month, he blew off a meeting with President Obama at the White House because his plane was delayed by fog in New York; evidently he couldn't bring himself to fly in the night before.


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