Goldman Sachs Apologizes, Pledges ‘Equivalent Of One Good Trading Day’ To Small Businesses

Acknowledging that maybe he isn’t always “doing God’s work,” Goldman Sachs CEO Lloyd Blankfein yesterday took some responsibility for his company’s role in the economic crisis. “We participated in things that were clearly wrong and have reason to regret,” he said. “We apologize.”

And to show us that they really mean it, Goldman is devoting $500 million over the next five years to scholarships for business education and loans to small businesses:

Goldman Sachs said late Tuesday that it would provide $500 million to support small businesses, hours after its CEO Lloyd Blankfein apologized for the group’s role in the global financial crisis…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.

Not that I want to in any way discourage big businesses from undertaking such efforts, but, really? As Daniel Indiviglio wrote, “maybe I’m crazy, but I don’t think this initiative, though a pleasant effort, will have many angry Americans putting down their pitchforks currently pointed at Goldman. If Goldman really wants to impress anyone, they’re going to have to do a little better than this.”

For some perspective, Goldman has already set aside $17 billion for bonuses this year, which could climb to $23 billion by year’s end. So the five-year program amounts to 2 percent of this year’s bonus pool. The Financial Times pointed out that “the $100 million annual cost is the equivalent of one good trading day” and that Goldman “had 36 days in the third quarter where it made more than $100 million.” And loans account for part of the $500 million, which presumably have to be paid back, while Goldman will get a write-off for any charitable giving, thus reducing their tax exposure.

And its not just Goldman that’s having a lot of good trading days recently. According to a report from the New York City Comptroller, “Wall Street profits in 2009 are on track to exceed the record set three years ago, at the height of the credit bubble”:

The report noted that the four largest investment firms in Manhattan — Goldman Sachs, Merrill Lynch, Morgan Stanley and the investment banking arm of JPMorgan Chase — earned $22.5 billion in the first nine months…Net revenue at the four firms, which excludes interest expenses, reached a high of $57.7 billion in the second quarter.

Of course, instead of $500 million, Goldman could up its small business program to, say, $23 billion (or whatever the entirety of its bonus pool turns out to be). After all, that money was earned, in large part, by Goldman’s access to cheap money from the Federal Reserve.

Barring that development, Democrats in Congress are reportedly looking quite seriously at a financial transactions tax, which is an excellent idea, unless we want to count on further charity from Blankfein and co. to boost the country towards economic recovery