Lloyd Blankfein’s Memoir

Lloyd Blankfein’s Memoir

I was fascinated by this February 2026 NYTimes interview by Andrew Ross Sorkin of Lloyd Blankfein, former C.E.O. of Goldman Sachs. It really validates the misguided intentions of Neoliberalism. Let’s look at how Bill Clinton’s deregulation of the banks affected the nation’s economy.

I think if every bank had managed its risk the way we did, we wouldn’t have had a banking crisis.

“Going into the 2008 financial crisis, I thought I was cynical about politics. It turned out that I wasn’t cynical enough,”

Lloyd B described himself as grounded in the old partnership model where the partners were investing their own money. “I was a very risk-oriented, risk manager guy.” Looking back, he considers the financial crisis as a gift. “If I had had perfect knowledge, I would have gone out and shorted every security instead of being flat.”

His successor is the first C.E.O. that was never a partner of Goldman Sachs. “He’s rooted in a public world, and is doing things […] that our owners, which are the public shareholders, want him to do and are probably benefiting from. He’s completing the orientation of Goldman Sachs as a public company.”

“A major factor in the erosion of the fairness of our society was a feeling that the well-to-do got bailed out and the receptionist that put down payments on three apartments didn’t.” He balanced the greed of the receptionist with three apartments with the greed of the bank making the loans, pointing out that the central bank doesn’t lend to people or institutions; it lends to banks. “A recession that is also a banking crisis is a much more difficult thing to sort out.”

K shaped curves

After Covid, Recovery Has Been K-Shaped

“Paper Girl” Trauma Feedback Loop

“Paper Girl” Trauma Feedback Loop

This “Memoir of Home and Family in a Fractured America” is at the top of Obama’s list of recommended books. I thought it would help me understand why a majority of Americans in 2024 voted for a lying, thieving, unfaithful criminal.

Beth Macy grew up in Urbana, Ohio and left in the mid-1980s to became a journalist. Not surprisingly, she blames the loss of local newspapers as an underlying reason for the loss of pride-of-place. The solutions she offers are well-meaning but shallow.

The book describes the implosion of the middle-class way of life in her hometown: manufacturing jobs moving overseas, technology replacing manual and low-level white collar jobs, and the decline of labor unions. She clarified how the Civil Rights law was used to force Blacks into the labor unions, creating race tensions that were deliberately inflamed to weaken the union.

The middle class was further eroded by “the fact that government stopped thinking of higher education as a public good and basically privatized it to the tune of $1.75 trillion in individual student debt.” Author Macy emphasizes that her pathway out of poverty was paved by the Pell Grant that sent her to college. Government stopped adequate funding of Pell Grants as Neoliberalism shifted priorities from “the common good” to “shareholder value.” She quotes philosopher Richard Rorty who predicted in 1998 that globalization and growing inequality would eventually lead to widespread class resentment and, eventually to fascism:

      Members of labor unions and unorganized unskilled workers will sooner or later realize that their government is not even trying to prevent wages from sinking or to prevent jobs from being exported. Around the same time, they will realize that suburban white-collar workers — themselves, desperately afraid of being downsized — are not going to let them selves be taxed to provide social benefits for anyone else.
      At that point, something will crack. The nonsuburban electorate will decide that the system has failed and start looking around for a strongman to vote for — someone willing to assure them that, once he is elected, the smug bureaucrats, tricky lawyers, overpaid bond salesmen, and postmodernist professors will no longer be calling the shots…
      One thing that is very likely to happen is that the gains made in the past forty years by black and brown Americans, and by homosexuals, will be wiped out. Jocular contempt for women will come back into fashion…. All the resentment which badly educated Americans feel about having their manners dictated to them by college graduates will find an outlet.”

Arlie Russell Hochschild’s 2024 book “Stolen Pride” is referenced, pointing to a pride paradox where the shared working class value of self-sufficiency gets twisted into self-blame for the betrayal by “the market” of Neoliberalism. “Doubly blocked [by corporations and government policy], they become vulnerable to structural shame,” and more apt to embrace authoritarians, the radical right, and the notion that it’s okay to convert their shame to blame — of gays, immigrants, people of color, and liberals.”

It isn’t until the end of the book that the reader discovers that both of the author’s children are queer (her word) and one of them is transgender, revealing her anguish at the imminent loss of their fragile safety and social acceptance. She brings us into the world of Travis, a high school aged girl-to-boy transsexual. On page 111, counseling professor Tania Israel wondered if one of the reasons Beth Macy wrote the book was, “Maybe you just want your son to be loved, ya know?”

Another focus is her niece Liza who was trapped in a household with her sexually abusive step father and she could not get help from her mother, her pastor, or the police. The book does a good job of (1) showing how deep the hole is for people like Travis and Liza and (2) the blindness of the HAVES to the children of people who are violent, addicted, and under-educated.

 

Rigid thinking is a trauma response

Nikki King, the addiction scholar, is quoted on page 302, “Rigid thinking is a trauma response.” Trauma alters how the nervous system detects and prioritizes safety and danger. In an environment of diminishing opportunity and fading hope, a self-reinforcing loop organizes around protection rather than connection, narrowing perception and limiting available responses.

In a place like Urbana, where so many are stuck in minimum-wage jobs and burdened by families that need more than is available, people are surrounded by anger, resentment, and despair. As the demands for time and money increase, the nervous system organizes around protecting themselves from further demands rather than connecting to the people who are asking for attention, time, and money. To defend themselves from the onslaught of demands, a person’s perception tends to narrow to the easiest response. Creeping despair limits resourcefulness. The energy erodes for a range of useful emotional responses. The emotionally exhausted and financially-depleted person rattles into a rut of rage against easy targets, echoed by the people in their social silo.

Trauma Feedback Loop – How We Get Trapped in “Silos” of GroupThink

Survival strategies become habitual, predictable, persistent, and
costly: physically, emotionally, and financially. People get stuck.

 

How to Escape the Trauma Feedback Loop

Resolving the problem of angry, resentful voters in places like Urbana requires many simultaneous approaches. Among them are

  1. Making the effort to get out of the Trauma Feedback loop,
  2. Improving access to more helpful news media and social media
  3. Making education affordable and accessible including funding for transportation

The three simultaneous efforts to unpeel the Trauma Feedback loop are:

  1. Learning to feel something other than rage. Becoming curious-not-furious
  2. When activated, and making the effort to be curious-not-furious, ask yourself, “What story am I telling myself? What memory is this triggering? What am I predicting?”
  3. Know how to calm your activated body enough to be able to make a rational choice about what to do. To be able to chose to RESPOND WITH INTEGRITY, prioritizing building families on a foundation of trust, and prioritizing trust in close relationships. Choosing not to lash out like a sleep-deprived toddler, or sulk like a teenager on junk food. Choosing instead to act like an adult with a fully-developed brain that can calculate the consequences of actions.

Calculating the Consequences of Actions

Is this a reasonable request, to expect full-grown people to engage their whole brains and take that nano-second to shape a useful RESPONSE rather than to react like a four year old on a sugar high? Studies on soldiers returning with PTSD show us that traumatized adults do not make rational decisions — they have emotional reactions. The Trauma Feedback Loop shows how this reactive behavior is self-reinforcing.

People trapped in the Trauma Feedback Loop display chronic hypervigilance, often ping-ponging between (1) emotional shutdown, withdrawal, and stonewalling and (2) anger, even rage, directed at the people closest to them or toward scapegoats like “woke” people. Research shows that even when traumatized adults have insight to their PTSD and make the intention to be more rational in their responses, ongoing physiological dysregulation hijacks that effort. The body always wins. When the nervous system is triggered, it will protect. The brain is designed for survival, not for singing Kumbaya.

For these adults economically trapped and traumatized by feeling helpless, this destructive behavior is not a failure of motivation, awareness, or effort —- it is a nervous system doing exactly what it is designed to do: to survive. The threatened brain does not pause to calculate the consequences of actions. This calculation of consequences is limited to people who feel relatively safe and relatively calm.

How to Interrupt the Loop

In order to learn, people need to feel relatively safe and relatively calm. The challenge is to create an atmosphere of trust to foster a physiological change inside the nervous system, in real time, by:

  • Identifying early nervous system shifts before defensive reactions fully mobilize
  • Tracking what is triggering the reactions at the level of bodily neuroception
  • Slowing or interrupting defensive momentum without overriding safety
  • Expanding access to a broader range of physiological and relational responses
  • Supporting the nervous system in updating safety through lived experience — not explanation.

“Updating through lived experience” is also called “learning,” but people need to feel safe and calm to begin to remodel the nervous system. An atmosphere of trust works best.

When people stuck in the trauma feedback loop can reorganize their nervous systems enough so that their responses are usually kind and thoughtful, they regain trusting access to their families, curiosity about the people and world around them, a sense of agency both economically and socially, and emotional availability without getting hijacked back to the lash-out-numb-out survival reaction.

Banking, Business and Society are Built on Trust

1950s man in Fedora

When America was Great?

While I have talked a lot about safety, I believe the real issue is trust. Would you go to work if you did not believe that you would get a check on payday?

I think a deep layer of rage is toward the betrayal of the “promise” after WWII that Americans who worked hard would be able to have the American Dream of a house and life better than their parents. If there were still good factory jobs and only three television networks, would we have the bifurcated communications environment of today? What went wrong?

Broadly, two things (1) undoing Glass-Steagall and (2) changing the law to require “maximizing shareholder value.”

After the stock market crash of 1929, banking and finance was reformed by New Deal reforms such as the Glass-Steagall Act which separated commercial and investment banking. Never again would the wealthy and powerful play monopoly with regular people’s money. Lloyd Blankfein refers to this in a recent interview.

Laws passed by Congress were undermined in the courts, as described in the book The Quiet Coup. Prior to that, most companies included employee and community welfare in their planning and actions. Neoliberalism was the fancy word for the greed that took hold again under Ronald Reagan during the 1980s under the guise of “smaller government, lower taxes, less regulation.” Academics like Milton Friedman and economists like Alan Greenspan jumped on the bandwagon and many Democrats followed suit creating the conditions we see in Urbana now. NAFTA was negotiated by President George H.W. Bush and signed into law by Bill Clinton, who further deregulated banking and finance.

Some people think that hitting rock bottom again, as we did in 1929, will wise Americans up and we will begin to create “new” New Deal. Conversely, maybe economically disadvantaged Americans will fall further into fascism. What I wonder is: when the middle-class “knowledge workers” suddenly lose their jobs to A.I. and they are forced into the some economic trauma as the working class of Urbana, will they too become reactionary fascists?

Corporations are creations of the law and Mehrsa Baradaran says we need to change the laws so these creations have responsibilities to the society that makes their profits possible. The gospel of “shareholder value” only reaped great rewards for those companies with a single or small number of major or exclusive shareholders.

For the most part, widely held companies were either driven out of business — so the valuable parts could be acquired — or bought up in leveraged buyouts to be broken up and sold by the “Barbarians at the Gate.”

The Evolution of Trust

Nicky Case created a 30-minute game that uses Game Theory and the Prisoner’s Dilemma to play out the probabilities of The Evolution of Trust.

Fascinating and insightful, it sets the groundwork for another prediction game that demonstrates why communities like Urbana, built by immigrants, become so hostile to new immigrants.

YouTube channel Veritasium (the element of truth) riffed off the graphics created by Nicky Case to explore the question “Can you really reach anyone in six steps?” The figures in green represent TRUSTED people. Think of them as people in Urbana. Reds are distrusted, let’s say new immigrants to Urbana.

In the leftmost image with three green trusted Urbana residents at the top, imagine they are all connected by the simple garland, no shorcuts. Trust grows organically at the edges — people come to trust those with whom they have repeated good interactions. Add the shortcuts of green-to-red and red-to-red and the system quickly becomes all red. Trust disappears from the system, the cooperators were crushed.

Click for YouTube Veritasium Video

As trust erodes in our communities, our financial systems and society itself is undermined. I think the answer is to restore trust in ourselves, our families, our neighbors, our communities, and our citizenship. This has to be done on a one-to-one basis. We need to learn how to build trust with people who are not like us. We need to step out of our media echo chambers.

The Author’s Solution

On page 301, Beth Macy outlines her solutions:

  • strengthen public schools,
  • invigorate “real life with other human beings including those we don’t know,”
  • support local news,
  • run for local office and/or support candidates who are trying to change things for the better for most people.

My solution is less glib. The middle class resents paying taxes to support the jobless, blind to their own impending slide into joblessness via A.I. displacement. Life is not a football game. It is time to shift from us-versus-them thinking and to do the hard work of finding and executing win-win strategies. Stop wasting energy by protesting the Rich. The Rich will always be with us. In a democracy, we bear the load we can. We are all in this together. No one gets out alive, so pitch in and connect. Create ways to make things better for most people. Find a way to make the best of what we have. Share the wealth. Get smart and consider strategic forgiveness in what Nicky Case calls the Copykitten way of getting ahead while creating community.

screenshot from Evolution of Trust Game

Click Image for Evolution of Trust Game by Nicky Case

Olompali State Park Hike

Olompali State Park Hike

Hip Chicks Spring Flower Hike Olompali – Miwok Village – Wooden Teepees Marked


Patti invited wildflower specialist Elizabeth Sanders to lead us on a 3.3 mile hike in Olompali State Park with a 600 foot elevation gain and loss. We hiked from 10 to 12:30 pm with lots of stops for photos and flowers. Group shot was in Miwok Village. I photobombed as Patti shot the explanatory sign. Notice the wooden tee-pees in the background.

Toward the end of the hike, as we were waiting for stragglers to catch up, Beth Power was the first around the bend. I took this wide shot and created a detail of it.

Quiet Coup by Mehrsa Baradaran

Quiet Coup by Mehrsa Baradaran
Mehrsa Baradaran

Interesting ideas flagged

The blue paper flags in The Quiet Coup mark jarring insights by Mehrsa Baradaran, a professor of law specializing in banking law at UC-Irvine. This searing indictment of the theory of “Law and Economics” is subtitled Neoliberalism and the Looting of America. Neoliberalism is a blanket term that describes

  • market-driven,
  • state-enabled
  • deregulation that prioritizes
  • capital mobility and
  • privatization of commerce
  • rather than prioritizing the public good.

The conclusion on page 349 points to the utter failure of the promises of neoliberalism:

  • increased market competition
  • more opportunity for all
  • fewer taxes going to wasteful government spending
  • and more liberty to pursue our own dreams

Money doesn’t Trickle Down — It Flows Up

In an unfettered market, capital multiplies. The rich get richer and the poor get poorer.

Reaganonomics
Supply-Side Economics
Voo-doo Economics

To combat the stagflation in 1980, presidential candidate Ronald Reagan touted “supply-side economics” promising that it would incentivize production and investment by deregulation, and lowering government spending and reducing taxes. George H.W. Bush correctly dismissed this as “voo-doo economics” because he understood that removing safeguards increased the “speed of greed.”

Regulations protect the citizens and small businesses upon which this economy is founded. Lowered government spending slowed growth. Reducing taxes on corporations increased the paychecks of CEOs but not the W-2 workers.

Trust is the Basis of Currency, Banking, and Society

Professor Baradaran points out that the value of any currency is simply that people believe it is worth something. Banking only works if people believe that they can get their money out when they want to. Social order is based on trust and it crumbles in riots. She says on p. 350

Neoliberalism taught us to distrust the state and one another… We are tyrannized by both a bloated government bureaucracy and a cannibalizing capital market: the guys who buy the guns, and the guys who sell them.

The past twenty years have shown us that humans are not the rational, self-interested decision-makers that Professor Milton Freidman claimed. Market behavior is not rational — it is driven by emotion. The strongest of these is the Trust/Distrust axis. On p. 351 she says,

We evolved as community builders, and our greatest feats have required groups of humans to work toward a common goal for long periods of time. Turning polarities into harmony — that is the magic of humanity. It is TRUST that is the vital force underlying both state and market. And corruption is the death knell of both.

Harmony – What If Democracy Is a Song?

“Turning polarities into harmony — that is the magic of humanity.”

Since the runaway inflation of the 1980s turned into “stagflation,” the electorate has ping-ponged between candidates who promise lower taxes and regulation, and those who promise to tame greed, corruption and inequalities. I think Professor Baradaran is right, these are different notes to the symphony of democracy and it would make better sense to find a way to harmonize.

Democracy is a song

Neoliberalism is a zero-sum mentality stuck in 19th-century laisex-faire economic ideas. On p. 352 she points out that “Segregationists, wealthy heirs, big-oil and tobacco are trying to preserve an unjust world economic order.”

Can we find a way to harmonize creativity, ambition and greed with “the greatest good for the greatest number”? What if a robust economic system is not a balance or a paradox. What if it’s a harmony. Can we find a way to hear all the voices?

Milton Friedman

Other voices in the harmony are academics. For example, the Chicago School of Economics Nobel Prizewinner Milton Friedman seemed to sing “Nothing is as permanent as a temporary government program.” He believed government regulation slows financial growth. On p. 85 Professor Baradaran said, “Friedman was not alone in his crusade against corporate responsibility… Shareholder supremacy took hold of the Delaware courts over the next decades…”

Chairman of the Federal Reserve Alan Greenspan would sing “A free market is self-regulating and derivatives are trivial. Get rid of rules.” Famous for his inscrutable testimony, he believed that the self-interest of free markets and banks would adequately regulate them. When investment banks Bear Stearns and Lehman Brothers failed in 2008 and nearly brought down the world banking system, Chairman Greenspan famously admitted he was wrong. This was during a House Committee of Government Oversight and Reform hearing on October 23, 2008.

Greenspan and Friedman could have been right, back when investment banks they were run by partners who decided the risk and return of each investment. They were using their own money. After President Jimmy Carter deregulated banks, firms like Goldman Sachs went public in 1999. Now they were corporations instead of partnerships and they were investing the corporation’s money: other people’s money. They paid themselves fees, so transactions were rewarded and Mergers and Acquisitions exploded. Leverage borrowing was the fuel that burned down the markets in 2008.

There will always be the voices of the greedy seeking to unshackle themselves from the regulation that impedes their fleecing of investors.

Greenspan and Friedman did not take into account the greed of bankers who were no longer working in partnerships, who were no longer investing the partnerships’s money. To correct this after the 2008 crisis, the Dodd-Frank bill was signed in 2010 by President Obama to place safeguards in banking. It was partly repealed by President Trump in 2018.

I can’t help but wonder if some of this greed is stunted development. Psychologists tell us that before age 3 toddlers engage in side-by-side play rather than cooperative play. Toddlers are learning what belongs to them (“mine!”) and they lack the ability to understand what others want. They engage in side-by-side Parallel Play and might be encouraged to take turns during a game, but toddlers usually don’t understand sharing in the sense of giving up the toy and then getting the toy back later. Regulating markets has been one way of coping with this behavior in adults.

There is also the question of mild autism like Asperger’s, an inability to understand that others have needs and that society expects adults to help out those who have less. Elon Musk announced his Asperger’s on Saturday Night Live, and Bill Gates, now famous for his Epstein friendship, is also said to be Asperger’s. Alex Karp, co-founder of Palantir, said during a NYtimes panel that he has Asperger’s. This limitation affects their business decisions.

For the craving for money is the root of all sorts of evils. [1 Timothy 6:10 New Testament]
Radix malorum est cupiditas The root of evil is cupiditas -> greed

The Law of Unexpected Consequences

Ralph Nader unwittingly set the groundwork for Citizens United

In 1976, Ralph Nader won a consumer rights case before the Supreme Court which established First Amendment protection for commercial speech by ruling that Virginia’s ban on advertising prescription drug prices was unconstitutional. It upheld Ralph Nader’s contention that the free flow of commercial information is vital to the public. Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc. This was the change of precedent that led to the travesty of Citizens United in 2010.

Citizens United v. Federal Election Commission held that the First Amendment prohibits the government from restricting independent political expenditures by corporations, unions, and associations. Corporate lawyer Lewis Powell sent a memo in 1971 to a friend who was the chairman of the U.S. Chamber of Commerce. Titled “Attack on American Free Enterprise Systems” it was “full of practical strategies covering a range pf issues, making it one of the most significant documents of the neoliberal revolution in America” p. 85. This was part of the formation of the Federalist Society, covered in Chapter Five, with founding members from the Olin Corporation and industries most threatened by changing markets: big oil, tobacco and weapons.

Lewis Powell went on to become a member of the Supreme Court and was a leader in shifting the decisions from what was best for the people to what was best for the corporations and markets. He was proud of his achievement of keeping black children out of white classrooms in Virginia — de facto segregation.

The Paradox of TIAA-CREF

TIAA-CREF is the leading financial advisor for more than five million teachers, firefighters, police officers, hospital workers, college professors, and people who walk across a variety of public sector jobs. The five million people are part of the disappearing middle class whose jobs and lives have been eroded by the efficiency-minded logic of the financialized neoliberal economy.

TIAA-CREF is a big capital reservoir of middle-class pensions that is invested like any other Wall Street portfolio: maximize returns. Worker’s retirement savings were fed into the same financialized market that squeezed empathy out of hospitals and turned them into businesses. On p. 349 Professor Baradaran says, “Neoliberalism’s trick was to enable a privileged few to cheat the market, loot our shared resources, and seize the ladders of opportunity.” The market is neither Divine nor Evil; it is an algorithm designed to maximize return-on-investment, making the rich richer and the poor poorer.

Integrity is Expensive but it is Not a Luxury

At the Munich Security Conference in February 2026, Representative Alexandria Ocasio-Cortez spoke about the intersection of economic inequality and the rise of far-right populism. She challenged the elite, pro-establishment conference attendees, arguing that runaway inequality fuels far-right populist movements. The security of the individual erodes as power and wealth become increasingly unequal. One threat is the power of surveillance as it becomes concentrated in fewer entities, often corporations like Palantir rather than elected governments.

On page 359 Professor Baradaran states:

I now believe that for those of us fighting for economic justice, it is time to look toward the MARKETS for solutions, because now money has more rights than voters,
and corporations have more power more than governments…

The neoliberal coalition did not want trade on fair terms, so they rigged the game.

Mehrsa Baradaran

Professor Baradaran contends that the neoliberal push to turn people into “entrepreneurs of themselves” is deluded and serves commerce rather than society. To insist that every American is solely responsible for their own success or failure is delusional. As a society, we must do more to provide education to anyone eager to study because a robust democracy is stabilized by voters who are able to think and who can make the effort to understand the many sides of complex issues.

Mehrsa Baradaran was born in Iran where her mother was imprisoned for political protest. Upon her mother’s release, they emigrated to the US when Mehrsa was about 8 years old.

Ca Indian Cultural Museum

Ca Indian Cultural Museum


California Indian Museum and Cultural Center

Linda Hanes and I visited the California Indian Cultural Museum in Santa Rosa on Thursday the 5th of January and were surprised that it did not focus on beautiful woven baskets and beaded vests. Instead, it was a genocide museum for the Pomo (local), Miwok (to the South), and Wappo (to the East) tribes of the area. Fascinating videos of Ishii, the “last” of the local people. Displays of the Ten Steps of Genocide, so relevant to today’s government purges of people they deem suspicious.

As we visited the center, there was a presentation going on in the main conference room. It looked like the Museum was explaining Native History to a group of local park rangers. I would have loved to seen that!

Julia Child at Napa Valley MAC

Julia Child at Napa Valley MAC

Joined my OLLI-Art friends at the Julia Child show at the Napa Valley Museum of Art and Culture.

Napa Valley Museum of Art and Culture

It takes an hour to drive to here on winding St. Helena Road

We took a bath with Julia and Paul Child.

Julia’s TV set with my friends on camera, displayed below the cooktop.

Photobombing Jonathan – visible on camera below. Jonathan wields “Jacques Couteau”