Fig. 1. “East River Savings Bank,” apparently now a CVS drug store. Photograph by Jim Henderson, July 3, 2021, via Wikimedia Commons, CC BY 4.0.

For [Lloyd] Blankfein, in the end, it all comes down to one thing: finding the best, fastest, and safest way to make money with money, then make some more money, with money on top. He’s not interested in a reality check, just a bumper pay cheque for his clients, for his firm, for his staff, for his shareholders and, eventually, he believes, for us. His almost religious devotion to the dogma of finance is thrown into stark relief just before I walk out of the building with no name and find myself back in the autumn sunshine. I ask him the question that, in these troubled times, you’d think anyone – from the guy outside 85 Broad selling 99-cent chilli dogs to the gazillionaire King of Wall Street sitting 30 storeys above – would pause before answering. And then, perhaps, offer an equivocal, on-the-one-hand, on-the-other-hand answer, whether he means it or not. Is it possible to make too much money?

“Is it possible to have too much ambition? Is it possible to be too successful?” Blankfein shoots back. “I don’t want people in this firm to think that they have accomplished as much for themselves as they can and go on vacation. As the guardian of the interests of the shareholders and, by the way, for the purposes of society, I’d like them to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation.”

So, it’s business as usual, then, regardless of whether it makes most people howl at the moon with rage? Goldman Sachs, this pillar of the free market, breeder of super-citizens, object of envy and awe will go on raking it in, getting richer than God? An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker “doing God’s work”[1]

Moral Hazard: “Socializing the risk” of bad loans (see Bad Debt) or gambles via taxpayer bailouts of bankers or bondholders who lose money on bad and even fraudulent loans. There is nothing socialist (although some call it socialism for the rich”) about this particular form of Big Government. A better term for this tnora hazard is “oligarchizing the risk.” (See State Socialism.) Reversing the idea that the role of banks and other financial institutions is to serve the economy, financialization sacrifices the economy to protect the One Percent from suffering losses on its assets and bad loans. The effect of such subsidy to banks Too To Fail/Jail is to shift assets from the public at large (the 99 Percent, euphemized as “taxpayers,” although the Federal Reserve plays the major role) to the financial sector (the non-taxpayers under oligarchies).

For instance, the U.S. Government reimbursed uninsured depositors in high-risk S&Ls in the 1980s, leading to insolvency of the Federal Savings and Loan Insurance Corporation (FSLIC) after a fire sale of assets. In the wake of the 2008 crash Ireland’s government likewise bailed out Anglo-Irish Bank depositors at public (taxpayer) expense, plunging the economy into depression. Moral hazard also increased as the bubble economy gained momentum leading up to 2008, under Robert Rubin’s gang, Citibank embarked on a series of risky ventures, secure in the knowledge that the Obama cabinet (following Citigroup’s recommendations) would bail it out. The alternative, bankers threatened, was to block depositors from access to their banks’ ATM machines.[2]

Michael Hudson’s foregoing entry[3] is a little too narrow. Classically, moral hazard arises when people taking undue or irresponsible risks may benefit when those risks pay off but are insulated from the costs when those risks materialize. As Hudson observes, however, moral hazard seems entirely acceptable for the rich, as we see yet again with the well-off depositors at Silicon Valley Bank who deposited money well in excess of Federal Deposit Insurance Corporation limits, including, we must acknowledge, payroll money,[4] but entirely unacceptable for, for example, people getting an education.[5]

The extraordinary measures—which do not quite amount to bailout in the 2008 sense but bear more of a resemblance to a bailout than some venture capitalists would like to admit—come after the stunning collapse of Silicon Valley Bank. SVB officially shuttered Friday after a run on deposits, followed by similar failure of Signature Bank, which regulators closed Sunday amid concerns that it could threaten the financial system more broadly. The Biden administration cast the intervention as necessary to “maintain a resilient banking system.” But what this whole fiasco has made clear is that the banking system is actually pretty far from resilient, and has instead been left in a fragile state from deregulation.[6]

Most of the text and all of the citations associated with the 2023 collapses of Silicon Valley Bank and Signature Bank, the travails of Credit Suisse, and any other follow-on effects have been moved to a new page in this hierarchy. I expect to do the same with future banking crises and may yet pull together a page on the 2008 financial crisis.

John Arlidge, “I’m doing ‘God’s work’. Meet Mr Goldman Sachs,” Times, November 8, 2009,

New York Times, “Blankfein Says He’s Just Doing ‘God’s Work,’” November 9, 2009,

Jake Zamansky, “The Great Vampire Squid Keeps On Sucking,” Forbes, August 8, 2013,

  1. [1]John Arlidge, “I’m doing ‘God’s work’. Meet Mr Goldman Sachs,” Times, November 8, 2009,
  2. [2]Michael Hudson, J is for Junk Economics (Dresden, Germany: Islet, 2017), 161-162.
  3. [3]Michael Hudson, J is for Junk Economics (Dresden, Germany: Islet, 2017), 161-162.
  4. [4]Ben Foldy, Rachel Louise Ensign, and Justin Baer, “How Silicon Valley Turned on Silicon Valley Bank,” Wall Street Journal, March 12, 2023,; Jeff Stein, “Is this a bailout and 6 other questions about the SVB collapse,” Washington Post, March 13, 2023,; Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023,; Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023,
  5. [5]Ellen Schrecker, “The 50-Year War on Higher Education,” Chronicle of Higher Education, October 14, 2022,
  6. [6]Eric Lutz, “The Silicon Valley Bank Crisis Is Complicated. But Donald Trump’s Role In It Isn’t,” Vanity Fair, March 13, 2023,