12 Leaders The EconomistFebruary 1st 2020
2 Goldman has been on the wrong side of these trends. Consid-
er its performance relative to JPMorgan Chase, a giant full-ser-
vice firm. Goldman is still wrestling with past compliance mis-
takes—it is expected to pay billions of dollars in penalties for the
1mdb scandal in Malaysia. Its funding costs are higher than
JPMorgan Chase’s (1.95% compared with 1.25% in 2018). Its ratio
of expenses to revenues is worse. Not surprisingly, its return on
tangible equity, a measure of profitability, was just 11% in 2019,
compared with 19% for its rival. For Goldman’s shareholders the
only consolation is that it has done better than Europe’s flailing
banks—in the most recently reported quarter Barclays managed
10%, Credit Suisse 9%, and Deutsche Bank made a loss.
Mr Solomon’s new plan is, in part, to become more like
JPMorgan Chase, with a broader range of services and funding.
Goldman wants to expand Marcus, its fast-growing consumer
arm, and also to build out its transaction-banking division that
ships money around the world for companies. It plans to attract
more deposits, which are typically the cheapest way to fund abank. It has hired an army of tech experts. All this, Goldman
hopes, will raise its return on tangible equity to 14%.
Goldman says it recognises the need for fundamental reform.
It boasts of transforming its macho culture with a more diverse
intake of recruits. But you can question how much it has really
changed. It continues to allocate half its capital to its once-
famed trading operation, despite its drab returns. And it still
spends a lavish $12bn a year on rewarding its staff, even as the
firm earned only $8bn for its shareholders in 2019. So far inves-
tors remain sceptical, with its shares priced at their book value.
If Goldman’s reinvention fails it may ultimately have to do a
deal. Uniting Wells Fargo and Goldman, for example, would
create something more like JPMorgan Chase (and with a similar-
sized balance-sheet). In America regulators and some politi-
cians are sceptical about bigger banks. In Europe, where the in-
dustry is more desperate, the mood has already changed, with
matchmaking now encouraged. At least Goldman’s mergers-
and-acquisitions advisers will be in on any action. 7A
rising number of girls wish to be boys and boys wish to be
girls and a rising number of them are taking drugs to block
puberty. In Britain cases of children being treated for gender dys-
phoria by the National Health Service remain rare, but in the past
decade they have climbed at a rate of 50% year on year (see chart).
In America the number of gender clinics treating children has
increased from just one in 2007 to perhaps 50 today.
This has bothered lawmakers. In America several states want
to ban giving puberty-blocking drugs to children (see United
States section). In Britain the high court is considering the judi-
cial review of a clinic which complainants believe has been
handing out puberty blockers too freely (see Britain section).
The use of such drugs raises thorny questions about who de-
cides what can happen to a child’s body and why.
Put aside the culture wars, if you can. This de-
bate should be settled in the interests of the
child. Yet those can be very hard to discern.
Puberty blockers prevent adolescents from
developing secondary sexual characteristics
like breasts or a beard. They almost always set
off a cascade of interventions that involve
“cross-sex” hormones and later may also in-
clude gender-reassignment surgery. The main purposeofpuber-
ty blockers is to bring comfort to people with gender dysphoria,
by sparing them the experience of, say, becoming more like a
woman if they are a girl who wishes to be a boy. They also make
most future surgery less severe.
However, the combination of puberty blockers and cross-sex
hormones also leads to irreversible changes which, if they start
early in puberty, include sterility. About a dozen studies of gen-
der-dysphoric children who did not take puberty blockers have
found that most of them, if supported by counselling, are happy
with their sex once they emerge from puberty. The share often
cited is 85% and many of them turn out to be gay. One sign that
something is wrong is that more people are “detransitioning”—re-identifying with their biological sex. Most of them are girls
who wanted to be boys when they were in their teens. If they took
puberty blockers and then cross-sex hormones early they would
be sterile for life, even if they did not have hysterectomies.
As of now, there is no way to distinguish the 15% or so of chil-
dren who will transition successfully from the 85% who might
have been happy with the gender of their birth if they had re-
ceived counselling alone. Some claim that withholding puberty
blockers adds to the burden on vulnerable children with gender-
dysphoria and may lead to higher rates of suicide.
Choosing whom to treat is a judgment of Solomon. The deci-
sion to intervene is made harder by a reckless disregard for data.
The academic studies purporting to show the higher suicide risk
among trans children are unconvincing. Clinics
do not publish enough studies on the effects of
various treatments on their patients. Too little
research compares children who have had treat-
ment with those who have not. The field needs a
better understanding of the long-term effects of
puberty blockers and cross-sex hormones. Ev-
ery child who is treated should be enrolled in a
long-term follow-up study.
Thisshould be with their informed consent. But so should the
treatment itself. Today children and parents are not always fully
informed about the potentially grave consequences of starting
on puberty blockers. Their effects are often described as largely
reversible—and the effects of cross-sex hormones that are al-
most always taken with them are not.
To ban puberty blockers in all circumstances would be unjus-
tified. Not only would it be harsh on some children, but it would
also leave the issue permanently obscured for lack of new re-
search. However, today’s rush into treatment smacks of a fad.
Many adolescents feel unhappy with the way they were made.
Transitioning will be solace for some. But for others it will be a
dreadful mistake. 7Pill-pushers
Drugs offered to transgender children need to be used more cautiouslyPuberty blockersGender-identity clinic referrals
Britain, under-18s, years ending March
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