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Yep, They’re Gamblers

Here’s the transcript of an interview with Lloyd Blankfein,the CEO and chairman of Goldman Sachs, by Michele Norris on NPR’s All Things Considered yesterday. This was Blankfein’s most revealing response:

“Without liquid markets, nobody would buy debt or equity in companies, which by the way is what finances companies, unless they thought they could sell them and move into and out of their positions.”

According to this philosophy, you don’t buy a house to live in, you buy it to sell it for a profit; you buy stock to sell it it for a profit; you don’t buy anything you can’t sell for a profit. This is short-term next quarter thinking. They aren’t interested in the survival of a business, only that the stock will rise so they can sell it. These aren’t investors, at best they are retailers.

This guy believes that companies are financed by their stock and debt, not by their profits,and that’s the kind of thinking behind most major bankruptcies. This is the kind of thinking that is destroying the print media, which is profitable, but not profitable enough to service all the debt accumulated during leveraged take-overs. Corporations are no longer concerned with shareholders, only with share-sellers.

I happened to have a deep-seated moral objection to Wall Street gamblers being taxed at a lower rate than enlisted military personnel being shot at in this country’s wars. The 15% capital gains tax is the same as the bottom income tax bracket and less than the Self-Employment tax paid by entrepreneurs. Why should people who actually work pay higher taxes than gamblers?