Goldman Offers up $500 Million to Small Businesses as Penance

The financial crisis has hit our country in many different ways. A whole lot of people’s lives have been devastated by the financial goings on of the past few years, or at the very least turned right on their heads. As happens when anything goes this wrong, the people left in the destructive wake start looking around at who to blame. There’s been a lot of finger pointing going on in regards to our current recession as well. What’s really the point though? Instead of looking for who to blame, all that energy could be focused more on finding a solution. The blame game is just a whole lot more fun isn’t it.

Yesterday one of those to blame stepped up and decided to take a little bit of responsibility for where things went wrong. Goldman Sachs, one of the financial institutions right at the center of this economic downfall, announced that it would be providing $500 million to help support small businesses. This announcement came just mere hours after their CEO Lloyd Blankfein apologized for the role his group had played in the financial crisis.

Those two events trust me were not coincidentally linked. I don’t know if the people at Goldman Sachs are trying to clear their conscience or trying to garner a little bit of public sentiment, but either way I guess we’ll take it. The $500 million though is really a drop in the bucket compared to the kinds of numbers this company throws around. Its almost insulting in a way, but at this point we are the dog underneath the table and are willing to take whatever scrapes these people want to toss our way.

MarketWatch had an informative article on this announcement entitled “Goldman Apologizes, Offers $500 mln to Small Businesses”. This article details the significance of this $500 million, which will be paid out over the course of 5 years, in comparison to the company’s bottom line.

The group said it will provide $100 million a year over the next five years, including a total of $200 million to provide scholarships for business and management educations and $300 million in the form of “loans and philanthropic support” to increase access to capital for small businesses.

Goldman has already set aside nearly $17 billion to cover pay and bonuses this year and that figure could rise to as much as $23 billion, meaning the five-year program is equivalent to a little more than 2% of its annual wages bill.

The Financial Times reported that the $100 million annual cost is the equivalent of one good trading day and that the bank had 36 days in the third quarter where it made more than $100 million.

So are we supposed to get excited about this? I wouldn’t exactly say that, but I wouldn’t completely scoff at it either. They didn’t have any reason or were mandated to do this in anyway. Of course its a blatant PR move, but its not a bad one. Its really in their best interest too for as the economy soars so do their profits. Its really just a win win situation for everyone involved. Some more money possibly in line with the kind of money they’ve been paying out in bonuses would have been nice, but who are we really to complain.

I don’t really blame Goldman Sachs for the financial crisis, they were simply going about their businesses. Looking back at it, things could have been done differently of course, but hindsight is always 20-20. “We participated in things that were clearly wrong and have reason to regret,” Blankfein reportedly said, adding “we apologize.” This is something that I think is nice to hear. Its refreshing to see someone step up to the plate and admit that they didn’t handle things as well as they could have. Is it sincere? Probably not, but at this point its all we’re going to get and its better than nothing.