CEO who ran Goldman Sachs during financial crisis warns Bernie Sanders will “ruin" economy

“This person ran Goldman Sachs when it helped crash the economy and then profited off the rubble," a reporter said

By Igor Derysh

Managing Editor

Published February 12, 2020 7:46PM (EST)

Democratic presidential candidate, U.S. Sen. Bernie Sanders (I-VT) (David Becker/Getty Images)
Democratic presidential candidate, U.S. Sen. Bernie Sanders (I-VT) (David Becker/Getty Images)

Former Goldman Sachs CEO Lloyd Blankfein expressed concern over the rise of Sen. Bernie Sanders, I-Vt., after he won Tuesday's New Hampshire Democratic primary.

Sanders edged out former South Bend Mayor Pete Buttigieg Tuesday in the Granite State after racking up the most votes in last week's Iowa caucuses.

Blankfein, who supported former Secretary of State Hillary Clinton in the 2016 election, responded to the news by firing off his first tweet in months.

"If Dems go on to nominate Sanders, the Russians will have to reconsider who to work for to best screw up the US," he tweeted. "Sanders is just as polarizing as Trump AND he'll ruin our economy and doesn't care about our military. If I'm Russian, I go with Sanders this time around."

Blankfein's concern about the economy seems largely focused on Sanders' vow to make billionaires pay their "fair share." He showed little concern before the company he ran for 12 years came under scrutiny from lawmakers and law enforcement officials over its role in the 2008 financial crisis.

Goldman Sachs settled a case for more than $5 billion in 2016 for "serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail," according to the Department of Justice.

Though the settlement allowed individual bankers to escape potential criminal liability, a scathing 2011 Senate report faulted Goldman Sachs with profiting at its clients' expense as the financial meltdown wiped out trillions of dollars. The company "used net short positions to benefit from the downturn in the mortgage market" and profited "from the same products that caused substantial losses for its clients," the report said.

"The first thing you need to know about Goldman Sachs is that it's everywhere," the Rolling Stone's Matt Taibbi wrote in 2009. "The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates."

Blankfein later apologized for what The Guardian described as "practices that led to the credit crunch, such as the creation of 'toxic' mortgage-backed securities."

"We participated in things that were clearly wrong and have reason to regret," Blankfein said in 2009, shortly after the company got a $10 billion bailout from taxpayers.

Sanders campaign manager Faiz Shakir responded to Blankfein's latest tweet by arguing "this is what panic from the Wall Street elite looks and sounds like."

Sanders has repeatedly slammed Blankfein for "making huge amounts of money after destroying the economy."

Blankfein, who left Goldman in 2018, told CNBC that Sanders' attacks on him put people in danger.

"To personalize it, it has the potential to be a dangerous moment — not just for Wall Street, not just for the people particularly targets but for anybody who is a little bit out of line," he said.

Blankfein, a registered Democrat, has called himself a "Rockefeller Republican" who is "conservative on fiscal issues and more liberal on social issues." He has continued to use his Twitter account to attack Sanders, and the Vermont Senator has responded in kind.

"I ask you to judge me by the enemies I have made," Sanders tweeted last year, touting Blankfein's criticism.

"After being bailed out by taxpayers, Lloyd Blankfein lectured Congress to cut Social Security, Medicare and Medicaid benefits and raise the retirement age for working people," Sanders tweeted. "Lloyd Blankfein owned not one but TWO mansions in the Hamptons. How? Goldman Sachs lying to investors and profiting from millions of Americans losing their homes in an 'unbelievable fraud.'"

Many joined Sanders in criticizing Blankfein after his Tuesday warning.

"This person ran Goldman Sachs when it helped crash the economy and then profited off the rubble," Washington Post reporter Dan Zak tweeted.

"Imagine the lack of self-awareness and political acumen required to believe that Democratic primary voters might be swayed by a message from the Chairman of Goldman Sachs? Wild!" former Obama aide Jon Favreau added.

"When you and your CEO friends spend decades turning America into a monopoly that only serves you," Time editor-at-large Anand Giridharadas said, "the policies that would actually improve people's lives happen to be the policies that would most constrict your power."

By Igor Derysh

Igor Derysh is Salon's managing editor. His work has also appeared in the Los Angeles Times, Chicago Tribune, Boston Herald and Baltimore Sun.

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Aggregate Bernie Sanders Election 2020 Goldman Sachs Lloyd Blankfein Politics Wall Street