Making Sense with Sam Harris #473 — Money, Power, and Moral Failure
102 snips
Apr 29, 2026 
Lloyd Blankfein, former Goldman Sachs chief and author of Streetwise, joins for a brisk tour through Wall Street and Washington. They get into Goldman’s role in the 2008 meltdown, why liquidity panic nearly broke the system, and how crisis fixes may have created new risks. They also touch on AI hype, wealth inequality, antisemitism, corruption, post-truth politics, and the national debt.
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What Goldman Sachs Actually Does
- Goldman Sachs acts as a wholesale bridge between capital seekers, capital providers, and parties trying to transfer risk.
- Lloyd Blankfein says the firm often holds unwanted risk temporarily, then hedges it with a "cocktail" of near-matching positions until a counterparty appears.
Why The Paulson Mortgage Trade Was Defended
- Blankfein says the infamous mortgage short was market-making, not secret betrayal of a trusting retail client.
- John Paulson wanted to short mortgages while a large institution wanted high-yield mortgage exposure; Goldman stood in the middle and matched informed counterparties.
How Solvent Firms Still Die In A Panic
- Even firms with cleaner books could fail in 2008 because the real threat was a systemwide seizure of trust and liquidity.
- Blankfein compares it to a daisy chain where everyone waits to be paid first; once confidence breaks, obligations remain but cash stops moving.