Does Goldman Sachs have a God problem? A God complex? An ungodly headache?
Goldman, once a venerable institution known for keeping close counsel, is now a lightning rod for populist criticism of the financial sector. And its latest public relations efforts don’t seem to be helping.
The bank’s very success – turning a profit in excess of $3 billion last quarter – is exacerbating the problem. Americans are in no mood to celebrate Wall Street success. With deepening bonus pools and bulked up compensation packages, Goldman isn’t winning any friends.
Goldman is also facing scrutiny over its neighborly relations with US officials. Revelations that former Treasury Secretary and Goldman chief Hank Paulson met with his former colleagues last year in Moscow didn’t ease anyone’s concern that the Treasury-led financial sector bailout was a little too convenient for Goldman.
Even though Goldman Sachs has paid back its TARP funds with interest – and professes to never having needed the money in the first place – the perception is taking hold that even when Goldman Sachs doesn’t get direct help from the government, it benefits tangentially from other federal action, for instance the AIG bailout or the Federal Reserve’s asset stabilization policies.
Given the increased scrutiny, Goldman has been on a bit of a media blitz, with CEO Lloyd Blankfein talking up the bank’s positive social benefits and his own working-class roots. For a while, Blankfein was doing a decent job of it in an interview with John Arlidge of the Times of London, printed Sunday.
Blankfein didn’t apologize for Goldman Sachs making its employees rich. To the contrary, when asked if it was possible for people to make too much money, Blankfein responded, “Is it possible to have too much ambition? Is it possible to be too successful?”
No, and for good reason. In Blankfein’s telling, Goldman improves lives outside the firm. “We help companies to grow by helping them to raise capital,” he tells Arlidge. “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…. We have a social purpose.”
This is a solid argument. Few people who don’t love banks will be won over to it, but it’s intellectually honest and gives the bank’s defenders (inside and outside) a talking point with which to parry detractors.
Blankfein also seems to have a realistic understanding of his and his company’s place in the world. “[P]eople are pissed off, mad, and bent out of shape…. I know I could slit my wrists and people would cheer.”
And he’s comfortable deploying some self-deprecating humor. “Aha! You catch us plotting in real time,” he remarks when meeting Arlidge alongside a group of executives. He adds, “It’s like a safari here. You’ve come in to look at the animals.”
But it’s ultimately the humor that does in Blankfein. Near the end of the story’s narrative, Arlidge relates an exchange with Blankfein in which the CEO mocks piety and, with “an impish grin,” claims he is simply “doing God’s work.”
I assume no PR flak was near Blankfein at the time, or else the poor soul’s immediate meltdown would have been mentioned in the story.
The God remark of course became the story (a story that actually tells a balanced tale of what Goldman means to the financial sector, the government, its employees, and the public). It made it into the headline and was discussed in every other major news outlet – print, Web, and TV – over the next two days.
The humor – the impishness – mostly got lost in translation and the impression left was of a Wall Street big shot with a much-too-high opinion of himself and his firm.
The lesson? It’s a little bit obvious, but companies and executives in delicate public relations situations have to be ultra-cautious when speaking with the press – or be prepared to spend a lot of time and energy explaining nuanced comments.
It’s confusing for executives because they’re often told that people like public figures who aren’t afraid to speak their minds and show a little personality. But what’s left out of that advice is that you have to possess at least a dollop of goodwill to pull off politically incorrect comments.
As flush as Goldman’s balance sheet might be, its goodwill vault is empty. Best to keep the jokes to a minimum and be boring with the press.
The good news is that Goldman’s got a lot of experience being boring.