Monday, November 23, 2009

Does Wall Street Do God's Work?

Wow... that's a loaded title for a blog post, isn't it? Lloyd Blankfein, CEO of Goldman Sachs, apparently used the phrase "God's work" in this interview with John Arlidge of the London Times. Here is a quote from Blankfein from that article:

But then, he slowly begins to argue the case for modern banking. "We’re very important," he says, abandoning self-flagellation. "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle." To drive home his point, he makes a remarkably bold claim. "We have a social purpose."

You can imagine many people's reaction to the phrase "God's work" used in conjunction with investment banking these days. However, John Tamny at offers a defense of Blankfein's comments in this article. While I think that I would have chosen a different phrase to make my point, I do agree that many people, including most journalists, do not understand the value created by bankers. They do not understand that helping entrepreneurs raise capital is one of the most critical functions in our economy.

Now, before you all recoil in horror, please understand that I'm not arguing all is right with behavior, incentives, and compensation on Wall Street. I am arguing that it's simply wrong to not recognize the social purpose achieved by those in our banking sector.

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