Goldman Bonus Season: Gird Your Loins

Goldman Sachs cuts the holiday merriment, lobbies shareholders, and stocks up on ammunition--have things gone too far?

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Populist bullseye Goldman Sachs is meeting with shareholders to head off backlash over end-of-year bonuses--"a first" for the company. That's not the only anti-outrage measure the company is taking heading into the holidays: winter festivities are being curtailed sharply, and according to a recent Bloomberg report, some employees are even buying guns. CEO Lloyd Blankfein's apology for the bank's role in the financial crisis and pledge of $500 million to help small businesses, apparently, did little to defuse the situation. The image of bankers packing heat as they brace for bonus backlash begs the question: is the Goldman mess getting so hot that bankers pre-emptively fear pitchforks?

  • Has It Really Come to This? Alice Schroeder's Bloomberg piece started the discussion. She wonders "what emotions must be billowing through the halls of Goldman Sachs to provoke the firm into an apology." She also writes that "talk that Goldman bankers might have armed themselves in self-defense would sound ludicrous, were it not so apt a metaphor for the way that the most successful people on Wall Street have become a target for public rage." She seems to think populist rage justified, though. Examining a statement from Treasury Secretary Hank Paulson, she decides it's clear that "the bailout was meant to keep the curtain drawn on the way the rich make money, not from the free market, but from the lack of one."
  • Guns Won't Work "I'm afraid," writes Peter Cohan at Daily Finance, "the guns won't protect these Goldman partners." His suggestion, instead: Goldman should "pay reparations for its role in securitizing sub-prime mortgages ... maybe it could deposit five years of bonuses in a fund to help people who have been displaced due to foreclosure."
  • Newbies With Bullets and No Self-Awareness Former Goldman Sachs employee Yves Smith says that, from her experience around avid hunters in her youth, she "[gets] nervous when people who have little or no history of using firearms start toting them. There are rules most people who use guns routinely are taught, and my experience is that those individuals are far more careful than newbies who have seen way more movie and TV gunplay than real world use." She, like Schroeder, isn't cutting the bank any slack:
Goldman ran afoul of one of Machiavell's big rules: "Men sooner forget the death of their father than the loss of their patrimony." Or its 21st century variant: "You can take from all of the people some of the time, and some of the people all of the time, but you cannot take from all the people all of the time." But the banksters, and Goldman in particular, have been determined to push the limits of those formulas, and are learning, much to their surprise, that they neglected to consider the intensity of the backlash that might result from their considerable success in extracting rents from the populace.
  • This Story Is Baloney Janet Tavakoli thinks Schroeder sensationalizes the situation a bit too much: having previously worked for a man whose father was shot dead by an investor after the 1987 crash, Tavakoli insists that "Bloomberg has the ability to uncover facts that may help us get monetary justice not of the violent variety." But this gun business is "gassy gossip" with little research behind its unverifiable claims.
  • 'I'm with Goldman'--This Is Too Much Marla Singer at Zero Hedge likewise scoffs at the piece, deriding Schroeder's apparent ignorance of handguns as well as the subtext of the story. She's ready to put the kibosh on the Goldman bashing:
Apparently, we are expected to take the fact that some unspecified number of Goldman employees have applied for handgun permits as some sort of harbinger of an impending coup d'├ętat by Goldman employees, or perhaps merely some sign of their close personal and financial connections to the antichrist ... On this point I have to say, just personally, as a long time, avid and law abiding handgun owner, and carrier, I'm with Goldman on this one. Moreover, I'm ready to make that call that, yes, when we heap abuse and threats on them and then finally chastise them for preparing to defend themselves in response to a public threat so pervasive and obvious that we would gloat at them after the fact for not "seeing it coming" should something actually happen, it seems pretty obvious that the Goldman bashing has, finally, gone just a wee bit too far.

A quip from Erick Erickson at RedState rounds out the response: "At least with the nationwide shortage of ammunition Goldman Sachs execs will be able to use taxpayer bailout money to load up their 9 mms with."

This article is from the archive of our partner The Wire.