Perhaps Lloyd Blankfein is a smart guy. It’s hard to tell. I wrote this awhile back, The Big Banks blow off Obama « Smart People I Know, and commented how he and some others blew off Obama in the winter before HCR. Perhaps Blankfein and the rest of his team should study what happened during HCR. They may find that they are now going to play the role that Anthem did. Obama and his team used Anthem and their rate hikes as a concrete example of why Health Care Reform was needed. It was very effective. It helped pass Health Care Reform.
Now Obama wants Financial Reform legislation passed. He is now going to use Goldman Sachs the same way he used Anthem. Goldman Sachs may think this is about the law suit. But to me, it isn’t. It’s about getting the legislation passed and a good way to do that is to find a concrete example of why it should be done. And Sachs is going out of their way to provide that example. If they were smart, they would have shown some humility and contrition. Instead, they are going head to head with Obama. This will end up badly for them. And Obama and company will get the FinReg regulations they want.
Meanwhile, I expect to see Blankfein gone within a year, if not six months.