22 February/23 February 2020 ★ FT Weekend 3
Life
L
loyd Blankfein has not had far
to travel. As we take our
table, Goldman Sachs’ former
chief executive points to his
apartment block across
Columbus Circle, the Upper West Side
vantage point overlooking Central
Park. “Not a long commute,” he says.
It has taken a while to persuade him
to do this. Since retiring from Goldman
17 months ago, he has avoided the
media. Aside from the occasional tweet
— more often than not to needle Bernie
Sanders, the socialist Democratic pres-
idential candidate — he has been keep-
ing a low profile.
During his final years at Goldman, he
underwent 600 hours of chemotherapy
to treat an aggressive form of lym-
phoma. It worked. The 65-year-old is
anxious ahead of our lunch that I will
not misquote him. He seems to have lin-
gering trauma from an interview he
gave to a British newspaper in 2009 in
which he quipped that Goldman Sachs
was “doing God’s work”. His aside was
taken out of context, he says. The ensu-
ing uproar fuelled the outcry over the
hefty bonuses his bank was paying out
just a year after the bailout of Wall
Street. “Some of you guys in the media
are doing God’s work too,” Blankfein
told me on the phone. Thank you, I
replied. “That was also a joke,” he said.
Goldman earned its role as a lightning
rod for popular rage over the 2008 melt-
down. Insiders spoke of a culture in
which Goldman would sell its most
sophisticated products — often riddled
with disguised subprime mortgages — to
the most unsophisticated investors,
including small pension funds, whom
they dubbed “muppets”. Then they
shorted their own products, leaving
Goldman a winner either way. Rolling
Stone described the bank as a “great
vampire squid wrapped around the face
of humanity”. Blankfein was paid $54m
in 2007, the year before the crisis. In late
2008, his bank received at least $10bn
worth of taxpayers’ money.
Since its heyday as the world’s most
profitable group of insiders, Goldman
has morphed into an almost — I stress,
almost — dull bank holding company,
chafing against post-crash restrictions
on its leeway to trade on its own
account. Goldman’s profit margins have
shrunk: its market capitalisation is less
than a quarter of JPMorgan’s and it has
underperformed its peers. Partly
because of its search for new sources of
profit, the bank became embroiled in
the Malaysian 1MDB scandal. Malaysia’s
former prime minister, Najib Razak,
was part of a group that allegedly looted
$4.5bn from the state investment fund
and spent it on yachts and artworks. On
Blankfein’s watch, Goldman helped
arrange a series of 1MDB bond sales,
much of the proceeds of which van-
ished. For legal reasons, he says he can-
not talk about 1MDB. Goldman’s role is
still under US federal investigation.
We meet at Porter House Bar and
Grill, a steak house. Blankfein is in a
chipper mood. His only complaint is
that he has lost feeling in his left thumb
after a minor operation. He needs no
persuading to order wine.
“What the hell, I’m retired,” he says.
He selects a Californian Pinot Noir. I
take a glass of Sancerre. “You know this
conversation would be a lot more fun if
it was off the record,” he says. I have a
hunch it will make no difference.
Blankfein became a senior Goldman
executive in 1994, around a decade after
the bank acquired his previous
employer, the commodities trading firm
J Aron & Co. Before long, he was heir
apparent to Hank Paulson, Goldman’s
then chief executive. In the past few
years, globalisation seems to be going
into reverse. I ask whether he looks back
on his early years at the bank as the
golden age of globalisation.
“We have two poles right now,” he
says. “The first is integration — that’s
uncorked. We’re not going to get the
cork back in. But then there’s also
nationalism and tribalism. There are
cycles to history. The Roman empire
integrated the world, then we wentcase if they conceded what was good.”
Though Blankfein remains as cheer-
ful as when we sat down, I can feel the
thermometer rising a little. Who would
you pick if it boiled down to Trump or
Sanders, I ask. For the first time in our
exchange, he pauses. “I think I might
find it harder to vote for Bernie than for
Trump,” he says. “There’s a long time
between now and then. The Democrats
would be working very hard to find
someone who is as divisive as Trump.
But with Bernie they would have suc-
ceeded.” But you would say that, I reply,
because you are a billionaire. Sanders is
proposing a wealth tax on people like
you. “I don’t like that at all,” says Blank-
fein. “I don’t like assassination by cate-
gorisation. I think it’s un-American. I
find that destructive and intemperate. I
find that just as subversive of the Ameri-
can character as someone like Trump
who denigrates groups of people who he
has never met. At least Trump cares
about the economy.”H
aving demolished our
entrées, we both order cof-
fee. Blankfein asks me to
add milk to his — his dead
thumb is giving him trou-
ble. “It’s the nerve agent,” he says. He
weighs up whether to order more wine
and decides against. “I can’t imagine
how all this is going to come out when
you publish,” he says, looking fleetingly
concerned. “If I tried to educate people,
and said these things in public, people
would go batshit.”
I am not sure how to respond to this. It
has been almost 12 years since the Wall
Street bailout, I say. Some people argue
that today’s populism is partly an after-
effect of that moment. Was the fact that
Barack Obama chose not to prosecute
senior Wall Street figures a factor in the
populist backlash? “Look, you have to
commit a crime to go to jail,” says Blank-
fein. People accuse Wall Street both of
“being too clever by half” and of com-
plete stupidity, he says: “Which is it? I
think they [bankers] were stupid,” he
continues. “Stupidity isn’t a crime. In
fact, it’s a defence. Evil intent is neces-
sary in criminal law. If you’re stupid,
how did you have intent?”
Many don’t see it that way at all, I
reply. They think Wall Street did very
well for itself by exploiting the gullibility
of others — the poor, the credit rating
agencies, less well-connected investors,
and finally the taxpayer. “I had a thick
skin vis-à-vis the press,” Blankfein says.
“But people misrepresent things. I don’t
hate them [the media]. People have
their job to do. I watch videos of tigers
eating antelopes. I don’t hate the tiger. I
feel sorry for the antelope. I don’t use
the word ‘unfair’ like Trump does. But I
think some of it was disproportionate.”
It feels like a good moment to do
something uncharacteristic — quote
Queen Elizabeth: why did no one see
it coming?
“If something goes right, people will
say they saw it coming,” says Blankfein,
before switching to a very different
analogy. “You are like the samurai and
you walk the streets and then you have a
war and the samurai lose. We drive the
risk, people lavish praise on us, then it
blows up on your watch. What are peo-
ple supposed to think about you?”I am still trying to digest the image of
Blankfein and his peers as antelopes.
The idea that they are unfairly dishon-
oured samurai is a mental leap too far.
But if all the world’s a stage, as Shake-
speare says, doesn’t society need the clo-
sure of justice, I press? “People need cul-
prits,” says Blankfein. “Who was
responsible for this earthquake? Maybe
earthquakes just happen. They [post-
crash investigators] went through
250,000 of my emails and they found
nothing. If I had had my druthers I
would have bought more [of what Gold-
man was selling].”
What does having so much money do
to your head, I ask? Blankfein confesses
that he remains an “obsessive” investor,
but insists money is not an end in itself.
Though he has set up a family founda-
tion, he is increasingly fidgety about his
lack of a full-time job.
Most of his peers at Goldman ended
up in public service. Robert Rubin was
Bill Clinton’s Treasury secretary. Hank
Paulson did the same job in George W
Bush’s administration. Gary Cohn was
economic adviser to Donald Trump.
Hence the moniker “Government
Sachs” — or “Death Star of political
influence”, as Rolling Stone put it. I
imagine Blankfein would be an obvious
pick for a Bloomberg administration. “I
know Mike, I was a customer of his [for
Bloomberg terminals],” he says. “I
played golf with him. I like him and
admire him. We are lucky Mike is pay-
ing the personal price of running.”Wouldn’t life be simpler if you were
just able to enjoy being rich, I ask. Even
with a wealth tax he would have enough
money to ensure his descendants can be
full-time philanthropists in perpetuity.
Blankfein insists he is “well-to-do”, not
rich. “I can’t even say ‘rich’,” he insists.
“I don’t feel that way. I don’t behave that
way.” He says he has an apartment in
Miami as well as New York. But he
abjures most of the trappings. “If I
bought a Ferrari, I’d be worried about it
getting scratched,” he jokes. “Ken Grif-
fin [the Chicago-based hedge fund bil-
lionaire] buys all these houses. He’s out
there every minute, calling the office. It
can’t make any sense to people outside.”
Since I have a train to catch, I suggest
Blankfein’s time must be running short.
He laughs: “You’re the one with the job.”
After settling the Goldmanesque-sized
bill, I squeeze in a last question. Does
Blankfein share Bloomberg’s view that
global warming matters more than any-
thing else? “I’m not so worried,” he
shoots back. “I live on the 16th floor.”
After a pause he adds: “That was a joke.”
I protest that I had already acknowl-
edged that. “Just wanted to be sure,”
says Blankfein.
Then, like a gazelle — or is it a nimble
medieval warrior? — he vanishes.Edward Luce is the FT’s US national editor‘I can’t even say “rich”. I
don’t feel that way. I don’t
behave that way. If I boughta Ferrari, I’d be worried
about it getting scratched’As chief executive of Goldman Sachs,
he was the face of global capitalism — anda lightning rod for banker-bashing. Over
filet mignon in New York, he talks toEdward Luceabout the crash, the criticism
— and sparring with Bernie SandersP O R T E R H O U S E
B A R A N D G R I L L
10 Columbus Circle, 4th floor
New York, NY 10019Bibbsalad x 2 $48
Filet mignon $65
Salmon steak $46
Glassof Williams
Selyem Pinot Noir $36
Glassof Dauny Sancerre
‘Caillottes’ $21
Coffee $6
Double espresso $7
Total (inc tax and
service) $309.12through the dark ages and feudalism.”
That analogy sounds unsettling, I say.
Are we now entering the new dark ages?
Blankfein, who majored in history from
Harvard, tends to see things in cycles.
“There are patterns. People forget. Peo-
ple die,” he says. “People repeat these
cycles. It’s in the nature of things.”A
fter some banter with the
server — “You guys know
me: what should I have?” —
Blankfein orders a Bibb
salad with chunks of bacon.
I follow suit. Blankfein dispatches his
with gusto.
As Goldman’s chief executive from
2006 to 2018, he was arguably the
world’s most influential financier. He
was also one of its richest. His net worth
today is estimated at $1.1bn. Unlike
many of his peers, Blankfein came from
the wrong side of the tracks. He was
born in the Bronx in 1954 and grew up in
public housing. His father worked night
shifts at the post office. He was always
conscious of his background. “If I’m in
an elevator [with other bankers], I am
thinking about the elevator operator, or
thinking of the taxi driver’s name, and
where his kids are from,” he says. “I’m
not trying to be cute. I feel a little bit out-
side looking in.”
Does he worry the elevator that ena-
bled his rise is breaking down? Today is
hardly a great time to be middle class in
America. “People sentimentalise the
past,” he says. “Every time someone
waxes nostalgic about how much better
it was when America was really great,
before we felt the need to make it great
again — joke! Not God’s work — I remind
them of what it was like.”
He explains that the schools were only
good because the women who staffed
them were blocked from jobs in busi-
ness and industry. Half the country was
segregated when he was born. “When I
went to school you couldn’t go to the
bathroom because you were afraid of
getting knifed. My high school was on
triple session: three shifts a day. We
didn’t have air-conditioning, either.”
I remind him that Sanders sees things
differently. “Did you see my tweet
exchange with Bernie?” he asks. I did
indeed. Last summer, Sanders pub-
lished a list of “anti-endorsements” of
plutocrats who disliked him, which
included Jamie Dimon, JPMorgan’s chief
executive, and Blankfein. The latter
tweeted at Sanders: “He’s always looked
down on me because he grew up in afancier neighbourhood in Brooklyn.”
Sanders responded: “Actually, my con-
cern has to do with the fact that you had
no problem getting bailed out by work-
ing Americans.” Blankfein also played a
starring negative role in an advertise-
ment by Elizabeth Warren, the other
left-leaning Democratic candidate, to
which he again reacted on Twitter. He
clearly enjoys getting under their skin —
and vice versa. Blankfein says he is a
life-long Democrat and donated to Hil-
lary Clinton’s 2016 campaign.
Our main courses have arrived.
Blankfein has ordered a filet mignon,
medium-rare — “I feel guilty because I
know you guys are paying,” he says.
Mine is a salmon steak. I mention that
Sanders is now favourite to be the nomi-
nee. Blankfein does a mock frown. “I’m
not sure Bernie likes people — he’s ideo-
logical,” he says. “But who am I to char-
acterise these things? It’s like Hamlet
with Rosencrantz and Guildenstern:
‘You can’t play this flute, how could you
play me?’ In my view Bernie could talk to
a six-year-old kid and he is looking over
their heads out to the great expanse.”
We are meeting just two days after
Trump was acquitted by the Senate.
Many Democrats are warning that a sec-
ond Trump term would jeopardise the
US republic, I say. Some, including
Michael Bloomberg, the former mayor
of New York and a friend of Blankfein’s,
have pledged to support whoever
becomes the nominee — even if it’s
Sanders. Removing Trump is their over-
riding priority.
“Look, I am a Democrat, but they said
those things in a shrill way to raise the
stakes on the outcome,” Blankfein says.
“I don’t think it’s unreasonable or cyni-
cal for a legislator to have said that what
Trump did was wrong, and showed bad
character, but it was not at a level where
we’re going to overturn an election nine
months before the next one.”
But Trump is already taking revenge
on those who testified against him, I pro-
test. “Bill Clinton, who I supported, per-
jured himself,” Blankfein replies. “That’s
a literal crime. And he was acquitted.”
Just to be clear, I press, you do not share
the Democratic party’s fears about
Trump’s autocratic leanings? “Look, it’s
crazy not to acknowledge the economy
has expanded under Trump,” Blankfein
says. “Some of this is related to tax
reform. The cheapest stimulus is getting
rid of dopey regulations [including on
Wall Street]. All I’m saying is that
Democrats would have a far strongerLunch with the FTLloyd Blankfein
‘I don’t hate the tiger. I feel
sorry for the antelope’
FEBRUARY 22 2020 Section:Weekend Time: 20/2/2020 - 18: 16 User: matthew.brayman Page Name: WKD3, Part,Page,Edition: WKD, 3 , 1