When you list the names of wealthy allies in the cause of reducing income inequality, Warren Buffett and George Soros tend to come to mind. Not high on the list would be Goldman Sachs CEO Lloyd Blankfein. Indeed, Blankfein is usually cast as one of the primary villains in the story of Main Street versus Wall Street, the proboscis at the vanguard of Matt Taibbi’s famous “vampire squid.”
But lo and behold, even Mr. Blankfein is starting to question the economic wisdom of allowing so much wealth to accumulate in so few hands:
Lloyd Blankfein, CEO of investment bank Goldman Sachs, called income inequality “very destabilizing” during an appearance on CBS “This Morning” on Thursday.
Arguing that the growing division between the top and bottom of income earners drives political divisions that makes it difficult to legislate and “deal with problems” and therefore “drive growth,” he said, “It’s a very big issue and something that has to be dealt with.”
Blankfein himself can be counted among the 1 percent who have been grabbing most of the country’s income growth, as he is the world’s best paid banker with a $2 million annual salary and tens of millions more in bonuses, adding up to a net worth of $450 million.
While Blankfein argued that one way to fix income inequality is to “make the pie grow” and grow the economy, he also acknowledged that “too much of the GDP of the country has gone to too few of the people.” He added, “If you grow the pie but too few people enjoy the benefits of it, the fruit, then you’ll have an unstable society.”
The smarter denizens of the plutonomy know that it’s unwise to court civil unrest. Many on the right seem to believe that economic insecurity will lead people to simply work harder; cynical operatives on the right work to ensure that any anger is directed outward and toward the “others” in society. But that doesn’t always work, and once a racist, populist prairie fire has been ignited, it’s very difficult to stop until it has scorched everything in its path–including the people who set it and thought they could control it.
When even the CEO of Goldman Sachs sees the possibility of major instability if inequality significantly worsens, you know the economic elite are starting to get nervous.
