Goldman Sachs’ boss Lloyd Blankfein says we must stick with austerity

Enough to make you weep.

You wonder if George Osborne’s tears at Margaret Thatcher’s funeral were as much to do with sorrow at having adopted her not for turning mantle, as regret at the passing of a political hero who didn’t feel the need to speak estuary to up her popularity ratings.

Today you wonder whether the tears are flowing more copiously, or have just dried up in resignation on hearing from Goldman Sachs’ boss Lloyd Blankfein, sitting comfortably atop first quarter profits of £1.47bn (1.2% of UK government borrowing in 2012), that Osborne is stuck with his austerity approach, like it or lump it.

Talk about a rock and a hard place.  Speaking on Radio 4’s Today Programme, Blankfein fundamentally concurred with the conclusions of IMF chief economist Olivier Blanchard last week, and the thinking behind the decisions of first Moody’s and latterly Fitch to downgrade the UK’s triple A credit rating.  If the country’s efforts to escape the downturn are to not to continue to resemble those of a spider climbing out of the bath, it needs an economic plan B.

“You would like it at this part of the cycle not to cut, to push out austerity and not to shrink the economy,” said Blankfein.  But, tough, he added. That course is only permitted to countries, which have done their housekeeping, balanced the books and not cranked up an enormous deficit, otherwise the markets will react badly.

“If you have a big deficit, you lose optionality,” said Blankfein. “The choices get taken away from you.”

So no chance then of that preferable loosening of the purse strings to let the economy breathe. Instead, continued snail-paced growth, with the likelihood of the further credit rating downgrades that entails, followed, in turn, by probable higher government borrowing costs and, consequently, even less flexibility for pump priming business and industry.

Reading between Mr Blankfein’s lines, businesses, especially small to medium-sized ones (SMEs), can’t expect the banks to stump up much more of the cash that government can’t provide either. The reason? They’re frightened, poor loves.

“Businesses are starving for cash and banks have cash idle, but they’re afraid, for want of a better word,” said Blankfein. And he understood their anxiety, he added, uttering the words you probably wouldn’t expect or hope to hear from a Jedi master among masters of the universe; that “lending money to businesses is one of the riskiest things you can do”.

Goldman Sachs, however, does a little something for the small business community. It won’t lend them the cash they’re starving for (they’re way too small and it’s way too frightening), but it will teach them new skills. Blankfein is over here to talk up and talk about his company’s programme for improving the general business nous of SMEs and “professionalising” them, an international offshoot of its USA 10,000 Small Businesses scheme.

Participating businesses in the UK do rate the initiative. But facing flat demand in a stagnating economy, those SMEs which have seen their or their customers’ credit ratings cut by the banks are likely to utter a hollow laugh, or shed an Osborne like tear, at any suggestion that such projects are going to do much to lift their or the UK’s fortunes in the near future. 

Lloyd Blankfein Photograph: Getty Images

Mike Jeffree edits the Timber Trades Journal.

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The footie is back. Three weeks in and what have we learned so far?

Barcleys, boots and big names... the Prem is back.

Another season, another reason for making whoopee cushions and giving them to Spurs fans to cheer them up during the long winter afternoons ahead. What have we learned so far?

Big names are vital. Just ask the manager of the Man United shop. The arrival of Schneiderlin and Schweinsteiger has done wonders for the sale of repro tops and they’ve run out of letters. Benedict Cumberbatch, please join Carlisle United. They’re desperate for some extra income.

Beards are still in. The whole Prem is bristling with them, the skinniest, weediest player convinced he’s Andrea Pirlo. Even my young friend and neighbour Ed Miliband has grown a beard, according to his holiday snaps. Sign him.

Boots Not always had my best specs on, but here and abroad I detect a new form of bootee creeping in – slightly higher on the ankle, not heavy-plated as in the old days but very light, probably made from the bums of newborn babies.

Barclays Still driving me mad. Now it’s screaming from the perimeter boards that it’s “Championing the true Spirit of the Game”. What the hell does that mean? Thank God this is its last season as proud sponsor of the Prem.

Pitches Some groundsmen have clearly been on the weeds. How else can you explain the Stoke pitch suddenly having concentric circles, while Southampton and Portsmouth have acquired tartan stripes? Go easy on the mowers, chaps. Footballers find it hard enough to pass in straight lines.

Strips Have you seen the Everton third kit top? Like a cheap market-stall T-shirt, but the colour, my dears, the colour is gorgeous – it’s Thames green. Yes, the very same we painted our front door back in the Seventies. The whole street copied, then le toot middle classes everywhere.

Scott Spedding Which international team do you think he plays for? I switched on the telly to find it was rugby, heard his name and thought, goodo, must be Scotland, come on, Scotland. Turned out to be the England-France game. Hmm, must be a member of that famous Cumbrian family, the Speddings from Mirehouse, where Tennyson imagined King Arthur’s Excalibur coming out the lake. Blow me, Scott Spedding turns out to be a Frenchman. Though he only acquired French citizenship last year, having been born and bred in South Africa. What’s in a name, eh?

Footballers are just so last season. Wayne Rooney and Harry Kane can’t score. The really good ones won’t come here – all we get is the crocks, the elderly, the bench-warmers, yet still we look to them to be our saviour. Oh my God, let’s hope we sign Falcao, he’s a genius, will make all the difference, so prayed all the Man United fans. Hold on: Chelsea fans. I’ve forgotten now where he went. They seek him here, they seek him there, is he alive or on the stairs, who feckin’ cares?

John Stones of Everton – brilliant season so far, now he is a genius, the solution to all of Chelsea’s problems, the heir to John Terry, captain of England for decades. Once he gets out of short trousers and learns to tie his own laces . . .

Managers are the real interest. So refreshing to have three young British managers in the Prem – Alex Neil at Norwich (34), Eddie Howe at Bournemouth (37) and that old hand at Swansea, Garry Monk, (36). Young Master Howe looks like a ball boy. Or a tea boy.

Mourinho is, of course, the main attraction. He has given us the best start to any of his seasons on this planet. Can you ever take your eyes off him? That handsome hooded look, that sarcastic sneer, the imperious hand in the air – and in his hair – all those languages, he’s so clearly brilliant, and yet, like many clever people, often lacking in common sense. How could he come down so heavily on Eva Carneiro, his Chelsea doctor? Just because you’re losing? Yes, José has been the best fun so far – plus Chelsea’s poor start. God, please don’t let him fall out with Abramovich. José, we need you.

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 27 August 2015 issue of the New Statesman, Isis and the new barbarism