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Goldman wants to help small business
Goldman Sachs CEO Lloyd Blankfein
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TEXT OF INTERVIEW
Bill Radke: Yesterday, Lloyd Blankfein, the CEO of Goldman Sachs, made an astonishing statement about the credit crisis. He said: "We participated in things that were clearly wrong and have reason to regret." He went on to apologize for them. Later in the day, the company announced a half-billion dollar initiative to help small businesses across the country. Now the company didn't make an explicit connection between the two.
Marketplace's Alisa Roth is in New York, where the program "Ten Thousand Small Businesses" will get its start. And she joins us live. Hi, Alisa.
Alisa Roth: Good morning.
Radke: Is this a PR move?
Roth: You know, if you believe what Goldman says, then no. Nobody said we did these bad things and so we're going to do this good thing to make up for it. Goldman says it's been working on this project for something like a year, so that means it predates a lot of the financial crisis and certainly all the public relations mess that's come since. But there is the Warren Buffett connection. He's one of the chairs of the advisory board. He says Goldman approached him about a month ago to get involved. And some people have pointed out that not only is a he a big shareholder in the company, but he's also got a reputation for being really straight-up and honest.
Radke: OK so, PR move or not, Alisa, would you outline the program for us?
Roth: So it has three parts: the first is education. It gives small business owners access to business programs or busienss education programs at community colleges and other institutions. The second is mentoring and networking connections, both in the community and at Goldman. And the third is money. Goldman's going to invest $300 million in loans and philanthropic support.
Radke: And what sorts of businesses are we talking about here?
Roth: This is not start-up capital. They're looking for businesses in underserved communities. They want firms that have been around for at least two years and have at least four full-time employees. And they're really looking for businesses where there's potential for more jobs to be created in the future.
Roth: Marketplace's Alisa Roth, joining us from our New York Bureau. Thank you.
Radke: You're welcome.
This is great news and I suspect - the start of something. Wall St. is competitive - I eagerly await the news of matching initiatives from other Wall St. players.
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The $500 million though is really a drop in the bucket compared to the kinds of numbers this company throws around. Its almost insulting in a way, but at this point we are the dog underneath the table and are willing to take whatever scrapes these people want to toss our way.
So are we supposed to get excited about this? I wouldn’t exactly say that, but I wouldn’t completely scoff at it either. They didn’t have any reason or were mandated to do this in anyway. Of course its a blatant PR move, but its not a bad one. Its really in their best interest too for as the economy soars so do their profits. Its really just a win win situation for everyone involved. Some more money possibly in line with the kind of money they’ve been paying out in bonuses would have been nice, but who are we really to complain.
I don’t really blame Goldman Sachs for the financial crisis, they were simply going about their businesses. Looking back at it, things could have been done differently of course, but hindsight is always 20-20. Its refreshing to see someone step up to the plate and admit that they didn’t handle things as well as they could have. Is it sincere? Probably not, but at this point its all we’re going to get and its better than nothing.
Check out my blog on the Goldman Sach's penance offering at.... http://www.thedebtgazette.com/2009/11/goldman-500-million-penance/
