Sunday, 4 June 2017

Lloyd Blankfein Condemns Trump’s Paris Accord Withdrawal: An Irony Lost on the Goldman Chief

Today’s post looks at the news that Goldman Sachs’ Chief Executive Officer, Lloyd Blankfein, has issued his very first personal ‘tweet’ - which has a certain reverence given that he joined the social media platform in 2011 - to condemn President Trump’s decision to leave the Paris Agreement on Climate Change and Environmental issues. In this post we shall look more closely at the sentiments offered by Blankfein and the reasons for it, but in keeping with the sentiments applied here in Financial Regulation Matters, we shall then look at the larger picture where will find that Blankfein’s condemnation is ironic at best, and appalling at worst.

Only a few days ago, President Trump stood outside the White House and declared that, with regard to America’s participation in the Paris Climate Accord, ‘we’re getting out’ which, obviously, led to a wave of criticism and counter-statements from around the world. The decision will no doubt continue to be the focus of much debate, but for our purposes we shall focus on the reaction of Blankfein, because upon hearing the news the Goldman CEO tweeted that ‘Today’s decision is a setback for the environment and for the US’s leadership position in the world’. This rebuke was, however, not the first rebuke of the Trump administration, with Blankfein casting comment over the so-called ‘Travel Ban’ that caused so much controversy shortly after Trump entered office; Blankfein on that instance noted that ‘for us to be successful, our men and women must reflect the diversity of the communities and cultures in which we operate’. However, whilst Blankfein’s rebuke has garnered an awful lot of media attention to the detriment of Trump’s position on the matter, is it right that Blankfein passes such a disparaging comment when we take a holistic view of the situation at present?

Simply put, it is contested here that Blankfein’s comment is particularly inappropriate, for the simple reason that the Financial Crisis, a Crisis which saw Goldman play a central role, is the precursor to Donald Trump’s Presidency – it is unimaginable to think that someone like Donald Trump, a political novice promising socially divisive policies, would have even gotten close to any sort of election without the destabilising effects of the Financial Crisis. This series of events have been alluded to in certain opinion pages, but it is worth looking at the effect of the financial crisis upon sentiment to examine the accuracy of such accusations. For example, it was noted in relation to the Finnish environment that although the Crisis and subsequent recession lessened the usage of natural materials via a reduced demand, the rate of development with regards to environmentally-concerned policies has slowed dramatically, and from within this set of parameters the Trump declaration makes sense. If we look at the particulars of Trump’s speech, we can see these parameters at play: ‘I was elected by the citizens of Pittsburgh, not Paris’, and that the accord is ‘costing the United States a fortune’ – such rhetoric is aimed at the Men and Women who are experiencing financial difficulties as a result of austerity that was the only response deemed appropriate by our leaders after the Financial Crisis. Whether one agrees with Trump or not, his ‘America First’ policy is the politicised warping of that attack upon the public and, rightly or wrongly, it worked – there was simply no other way that we would have witnessed Donald Trump as President.

Unfortunately, environmental policies and reform will always be societally relegated in favour of economic security and prosperity, and the Financial Crisis solidified that fact more than ever before. Once we understand that, we then have to look back at the Financial Crisis and, when we do that, we see Lloyd Blankfein and his organisation front and centre. Yes, the short-sightedness displayed recently, in terms of the development or survival of the species, is nothing short of appalling – but having one of the causes of the development of that short-sightedness inform us of how bad it is should not only cause one to be uncomfortable, it should cause one to be angry – the complete disregard being shown for the development of society has reached remarkable levels in the past decade and, remarkably, it continues to get worse. It would have been too obvious for Blankfein to bemoan the levels of poverty within society – assuming that he cares – but in bemoaning environmental development, he at once demonstrates his blatant disregard for the effects of his actions, but also demonstrates that the common viewpoint is that human development is fragmented; environmental concerns are something to be championed, but the reduction in the effects of predatory finance are not. A ‘travel ban’ should be bemoaned because it affects the company’s ability to recruit, but the fact that divisive politics - which is the natural result of a financial attack upon society – increases the risks to society in such an incredibly heart-breaking number of ways is not worth mentioning; human progression is not fragmented, it is all very much interlinked and the Financial Crisis was just as much of a blow to that development as the increase in carbon emissions continues to be. The real ‘setback’ for the environment, as Blankfein labelled Trump’s decision, was the lack of criminal prosecution in the wake of the financial crisis which would have represented a real deterrent against future systemic transgressions, not Donald Trump removing the United States from the Paris Accord. It is very important that we stop viewing these developments in isolation.

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