New York Post

Let us recite the Lloyd’s prayer for Goldman

- JOHN CRUDELE

I ’D like to wish Goldman Sachs’ Lloyd Blankfein a happy retirement. God and I both appreciate — and understand — what he really did.

If you didn’t catch the sarcasm in that last line, you need a refresher course on Goldman. And you need a reminder about some of the columns I’ve done on the firm, which was, and still is, so well connected politicall­y that Washington likely has to ask its permission to do anything.

Blankfein, who announced the other day that he will be retiring as chief executive on Sept. 30, was widely quoted in 2009 as saying that he and his firm were “doing God’s work.”

And, by God, making a lot of money in the process.

I’ve never met Blankfein, although I did once challenge him to a few rounds of boxing, which he didn’t accept. Blankfein explained the “God” reference by saying that Goldman was raising money for companies, which made economies better, which made the world a better place.

Ya’ know, he was doing work that God would approve of. That’s an awesome responsibi­lity. I’m sure he would have done it for free.

But I’ve always suspected that Blankfein wasn’t telling us all that he did. Specifical­ly, Blankfein never addressed — at least publicly — what he and former Treasury Secretary Hank Paulson, who led Goldman immediatel­y prior to Blankfein, did when the financial markets were collapsing in 2007 and 2008.

Right in the middle of the financial catastroph­e that has become known as the Great Recession, Blankfein and Paulson exchanged many phone calls. Back then, I got hold of Paulson’s phone logs and discovered that he and Blankfein spoke almost as much as the Treasury boss spoke with Ben Bernanke, who was then the head of the Federal Reserve.

Remember, Goldman is a private company that trades on the financial markets.

Paulson was a government official — appointed, not elected — who had lots of privileged informatio­n that a Wall Street firm like Goldman could use to make loads of money.

And it just so happens that the fi- nancial markets rallied vigorously right after the phone calls between Paulson and Blankein.

God, of course, would have approved because nobody wanted to see the entire US financial system collapse — which is what the scaremonge­rs were warning and how Bernanke was able to get his emergency quantitati­ve easing scheme — used to lower interest rates — approved by the Fed.

Along the way, God also granted Goldman Sachs a US government bailout that Goldman to this day denies it really needed.

Other firms weren’t so lucky. God wasn’t on their side. Kidder, Peabody & Co. and Bear Stearns executives lost tons of money. Bear Stearns’ head Jimmy Cayne (who I know but haven’t seen in years) once joked that he was probably the only person who lost $1 billion and was still standing.

Bear Stearns, which wasn’t bailed out by taxpayers, succumbed because it owned too many securities that were connected with subprime mortgages. Cayne obviously didn’t have the connection­s to God — or Washington — that Blankfein had or I bet his firm’s problem would have been fixed by taxpayers.

With Blankfein retiring and not taking a job in Washington, Goldman will be left a little light on DC influence. Sure, Treasury Secretary Steven Mnuchin worked at Goldman, but that was a long time ago. And besides, President Trump isn’t likely to let Goldman walk all over him.

Besides, Trump is probably also getting his signals directly from God, too.

Federal Reserve Chairman Jerome H. Powell told Congress this week that the economy is growing “considerab­ly stronger.” And while those words would warrant a hooray from Americans, that phrase coming from Powell is a little more complicate­d.

Powell is essentiall­y saying that he’s not going to stop raising interest rates even if inflation stays over the Fed’s target.

We’ll know next week how the economy did in the second quarter of 2018, but the better news is that growth likely exceeded an annualized rate of 4 percent. Keep in mind something that I wrote recently — the economy has popped to this level of growth before in recent years only to fall back after a quarter or two.

And the new tariffs that Trump has imposed, on top of aggressive Fed action on rates, could temper this level of growth.

Speaking of the economy: According to the Treasury Department’s monthly statement, our government collected a record $1.305 trillion in individual income taxes through the first nine months of fiscal 2018. The figure, which goes up to June, is rising because more people are working and paying taxes. It may also be heading higher because more folks are cashing in ggains made in the stock market. That’s the good news. But there’s also some bad news attached to the tax cuts. Washington still ran a deficit of $607 billion over the same nine months — despite all those contributi­ons from hardworkin­g Americans. We’ll have to wait a little longer to see whether Trump’s tax cuts improve the economy enough so that future payments make up for the revenue Washington is losing because tax rates were reduced. john.crudele@nypost.com

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