Goldman Sachs’ chief executive, Lloyd Blankfein, has penned a confessional essay in the Financial Times explaining some of the lessons learned from the financial implosion. It is notably frank, detailed, and self-flagellating, and it also offers a clear argument against Republican attempts to loosen “mark-to-market” accounting rules. He writes:
People are understandably angry and our industry has to account for its role in what has transpired. Financial institutions have an obligation to the broader financial system. We depend on a healthy, well-functioning system but we failed to raise enough questions about whether some of the trends and practices that had become commonplace really served the public’s long-term interests.
Read the whole thing here.
Maybe as a condition of further TARP funds, President Obama should issue a similar writing assignment to key officials from the banks and investment houses that failed to anticipate this catastrophe–in the same way that high school teachers make students write out their reasons for ending up in detention. Such self-reflection is a neccesary early step in restoring public confidence. We could publish each one with the same headline: “How I Failed You.” Who will step to the plate next? Several financial titans certainly have a lot more free time on their hands these days. Robert Rubin? Phil Gramm? John Thain? Bueller? Bueller? We are all waiting.
