Goldman Sachs CEO Lloyd Blankfein: Our Employees Are Among The Most Productive In The World

For those concerned about how Goldman Sachs is set to bring in record-breaking profits while the broader economy remains downright stalled, there is one simple explanation: Goldman employees are just more productive than you.

In another comment that will likely provoke even more Goldman Sachs outrage, CEO Lloyd Blankfein appeared at a industry conference on Tuesday and defended his company's performance, reports the Financial Times. Blankfein's words come on the heels of his recent claim that Goldman Sachs is doing "God's work."

Here's the FT:

"I often hear references to higher compensation at Goldman," said Mr Blankfein. "What people fail to mention is that net income generated per head is a multiple of our peer average. The people of Goldman Sachs are among the most productive in the world."

Blankfein went on to say that Goldman's earnings are significantly higher than other financial companies in the Fortune 500, and that, per employee, his firm is far more profitable than companies even in other categories.

Leaving aside the small matter of the benefits Goldman Sachs received from the bailout -- and the advantages that it receives from being classified as a bank-holding company -- this statement is somewhat misleading.

For one, comparing Goldman Sachs to retail banking operations -- banks that actually, well, lend -- isn't quite a fair comparison. Not only do retail banks have, by necessity, far more employees than investment banks (Bank of America has over 281,000 employees, while Goldman Sachs has roughly 31,000), but traditional retail banking is also generally less profitable. This year, Goldman's earnings have been dominated by its trading activities.

Yet, as Bloomberg pointed out, Blankfein argued yesterday that Goldman shouldn't be confused with "too big to fail" banks. Here's Bloomberg:

"Our business is very complex, and I won't deny that, but it's far, far simpler than most of the competitors," Blankfein, 55, said today at a conference in New York sponsored by Bank of America Corp. "I wonder myself how some of these things get managed."

Blankfein seems to want it both ways. He wants to argue that Goldman Sachs is more profitable than other financial firms, but he also doesn't want to be compared to, well, other financial firms.

Whether he's boasting that his firm does "God's work," or simply touting the excellence of his employees, Blankfein still seems to be out of step with public sentiment. At the Business Insider, Henry Blodget's advice seems wise:

Just say, "We were fortunate enough to have had an extraordinary year. I am grateful to our employees, shareholders, and the U.S. government for helping us through one of the most challenging periods in the firm's history."

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Comments

[tweedledeedumb]

Money is the only scoreboard the American people respect, so perhaps he is right. The fact is...Goldman produces nothing...like most of the US...we produce nothing....another reason the low dollar won't help us...we produce nothing...so to export anything..we have to first import it from Mexico, Brazil, Thailand, or mainly China. I the dollar goes low enough, though, we can always move (illegally) to Mexico to work...right?

[Strid]

I remember the good old days, when a productive company actually PRODUCED something. GS produces nothing.

They are, however, extremely adept at moving other people's money around from asset to asset and from market to market and extracting 'profits' from the transactions. Toss in the very liberal use of derivatives and leveraging, and they can earn 'profits' on assets they don't own, in transactions where they are not (supposedly) exposed to risk. This isn't a productive activity. Nobody benefits from this work other than a very small group of very rich people. Rid the world of Goldman Sach and the National Economy would be A-OK.

[GarryLad]

I am not sure all of this is fair.

Ultimately folks need capital and must go somewhere to borrow it, steal it or make war to appropriate it. Risk takers provide the capital and charge for their risk. A small portion of all transactions are taken from those who borrow to finance various ventures.

Specialized groups of people do this today in America. It becomes an industry. Most of the money actually flows into those needing the money. Like those building a business, like those financing an idea. Like those building a home. Like those making war. Much goes into making war. It has always been so.

To stop war,stop war's capital. To stop wall street stop war. The logic is so sublime as to be a truth. We will always hate. "erhaps we should remember what the industrialist Ford said.... ">>Why does he hate me so... I have not done him a good deed".

[tweedledeedumb]

You'll ruin the economy...weapons are the only thing we produce in this country.

[Quinny]

Our financial system has become nothing
more than high-tech feudalism.
Sleep tight America....

[Strid]

Actually, I'd call it high tech alchemy. Legal, lobbyist protected, politician sheltered alchemy.

[Quinny]

There is a revolving door that allows former employees of Gold-in-Sacks
to pass from the company to the highest levels of the US Government.
Mainly through the Federal Reserve and the Treasury Dept.
Are we that naive to believe that once they are in these positions
of power the policys of these agencies will NOT be used for the
benefit of Gold-in-Sacks? Lloyd Blankfein ADMITS that they might
have collapsed if not for the help of the "Government". How incredibly
fortunate for Lloyd that when the TARP deal was cut, the deal was
written by Hank Paulson. You know Hank. He used to have Lloyd's
job as CEO at Gold-in-Sacks! At one time this was called collusion.
Now its business as usual. Time to start from scratch. Getting rid
of the Federal Reserve and its enforcement arm - the IRS - would
be a damn good beginning.

[crazylikeafox]

What are they going to tell us next, that they deserve stolen money?

God wants them to have our stolen treasury?

God wants the rest of America to live on the streets and have no jobs but he really wants Goldman employees to have 5 mansions and a billion in the bank?

[chronic relatavism]

I would have a lot of hubris and brag about being the saviour of the entire financial system too, if I have endless funds from the American Taxpayer at my disposal also. If people think that a collapse of the system is not around the corner, just listen to these bozos; and wonder whether or not your money is safer in their banks and stocks, or with gold and silver squirreled away in your sock drawer. I think its only a matter of time before all these experts and PHD'd economists look incredulous as the system crashes, and have the audacity to say, give us another chance and the blood of your firstborns; as well as more control. These idoits can't control their delusions of grandeur, never mind the financial stability of the United States.

[tweedledeedumb]

Obama, Bush Jr., Clinton, Bush Sen., and Raygun...all the same Milton Freidman scholl of bankrupt economics voodoo...out wih Sumner and Giethner!!!

[robbyJ]

aig default swap they bought = our money = their bonuses

He didn't thank us, and that infuriates me.

[Proteus1946]

"The people of Goldman Sachs are among the most productive in the world."

Is that so? What, exactly, did the people of Goldman Sachs produce? How many tons of Steel? How many Automobiles? How many Air Conditioners?

As far as I can see, the only thing you have produced is LOTS of money out of air. You folks at Goldman Sachs are just as guilty of counterfieting money as the guy that uses a scanner/printer.

Stop calling your scams part of the GNP - it is not!

[crazylikeafox]

the most productive at theft

[chi2mike]

#1 Is this an example of a company, who should be free to do whatever it wants. Despite the fact that it not only is an inequitable distribution of capital within the company, but it's certainly corrupt and its impact upon the American economy in general in how it ferrets out its investment strategy?
#2 Where is the return on investment for these employees who are so supposedly productive? Is it really due to productivity, or is it due to risk-taking "chutzpah" with other people's money, for which there apparently is no consequences for failure?
#3 Perhaps the problem is not scale, but the quality and logistics of location of capital for one to have traditionally spent upon large scale enterprises? Why do large scale capital investments necessarily need large investments of human capital to run them? What does Goldman Sachs do that a good set of well programmed, well connected computers could not do?
# 4Is it fair to reward a horde of poker players at 2000 times the rate of good teachers? What does this say about the bias and values of society?

[KingofDetroit]

Does investment banking turn people into sociopaths. Or do people who are sociopaths tend to gravitate toward investment banking. The CEO featured in this article clearly hates life and everything in it. Look at those dark empty eyes!

[Strywever]

To be productive, one much actually produce something. What, pray tell, does Goldman Sachs produce?

[kamachanda]

Recession and debt.

[theriondata]

I keep wondering exactly what they are productive at. What service do they perform, what products do they produce, why are we better off with them than we would be without them.

Of course, there is the ever popular derivative. Where would we be without it.

Billions of dollars less in debt.

[Poboy]

Productive?

But for the government's, the very same government your class convinced others to hate, coming to the aid of your company, you and your employees would have been the first in the un-employment line. Somehow you have convinced others that they belong there and not you.

[teachone]

Lloyd, you should be ashamed of yourself and so should your employees! I worked for a investment firm and watched how productive these workers are. Coming in for work late EVERYDAY, taking twice the time for lunch that was allowed, talking on the phone to the kids and friends a good part of the day, then walking around visiting with everyone in the office a good part of the day, oh I almost forgot the lavish lunches we had catered in many days, not to mention the fact that they screwed up the clients paperwork constantly due to their distractions then blamed it on the new people, changed their hours in on the time clock as they entered their own hours. These people don't even know what the word productive means...yet are paid as if they are ENTITLED in some way to wealth for doing little. As well, you need to be mindful of using Gods name in the pursuit of money..this is certainly NOT his work, nor is deceiving or parasiting off the human race for your won pathetic benefit. By the way Lloyd a real follower of God knows it is written in the Bible, "Do not build up wealth here on Earth", as well "Those who are the leaders during their time here on Earth will certainly be the followers in heaven and heaven is eternal, so that gives the rest of us ALOT to look forward to!

[scottpot]

God told me he is against excessive compensation when billions are living in poverty.