Like it or not, the current economic crisis and outrageous bailouts offered by the U.S. government on behalf of taxpayers have put Americans in a sour mood, and for better or worse, those bankers and businesses putting themselves out there in a way that looks egoistic, isn’t going to work until things turn around and people begin to forget. So the remarks of Lloyd Blankfein recently, while probably in reality a joke, were taken and ran with by writers concerning his assertion that Goldman Sachs (NYSE:GS) and Blankfein were “…doing God’s work.”
Add that to the context of a long article in the Sunday Times recently touting the success of Goldman Sachs at a time that many Main Street Americans are suffering, and you don’t have a very wise way of communicating with these circumstances in mind.
Of course most regular Americans have no understanding of how the financial markets work and the important role companies like Goldman Sachs play in it. All they do is read the stories of corporate greed and big bonuses and contrast that with their own struggles. That leaves a bad taste in their mouths and a negative impression of a company.
Where it does matter outside of doing business directly with their customers is in how the public reacts if they get tweaked too much. I mean by that in the political sense, where they begin to assert pressure on their representatives to do something about the huge corporations.
In that regard, it may be a better practice for banking and financial institutions to lay low and be boring at this time, going about doing their business and at least showing some empathy for the current economic crisis which affects so many people.
The other thing as far as boasting of the success of Goldman Sachs where its top performers get huge rewards and bonuses doesn’t resonate much with people outside the industry when times are good, so obviously aren’t too acceptable in tough times.
One problem I see with this which does matter, is the timing of the article and Blankfein’s remarks seem to confirm the idea that Goldman is so enmeshed in government offices through former employees being positioned in strategic locations, that it gives the appearance that Goldman and Blankfein can do whatever they want without repercussions. That’s not a good position to be in, and something that confirms the title of this article that boring in times like these is always better.
No matter how powerful and well-run Goldman Sachs is, there’s always a way that giants in industry have fallen in the past, and flaunting success in the midst of the current economic environment is a good way to increase the chances of that happening. Again, this is a time to lay low and be boring for the banking and financial industry. Those that don’t practice that could find it coming back to bite them if things turn for the worst, which is a definite possibility over the next couple of years.
Businesses should be a lion with their competitors but a lamb with their public persona. Anything else is risky.
