Preet Bharara:

From CAFE and the Vox Media Podcast Network, welcome to Stay Tuned. I’m Preet Bharara.

Lloyd Blankfein:

Don’t tell me about the probability or improbability of something happens because on certain moments, you can throw that all out the window. All assets become correlated. It doesn’t matter what you thought the probabilities were. Given enough time, it’s not that anything can happen, it’s that everything will happen.

Preet Bharara:

My guest this week is Lloyd Blankfein. He served as the chairman and CEO of Goldman Sachs during the global financial crisis of 2008 and the years that followed on Wall Street. He’s now out with a new memoir. It’s called Streetwise: Getting To and Through Goldman Sachs. That’s coming up. Stay tuned.

What’s the best way to assess risk? Lloyd Blankfein shares his secrets. Lloyd Blankfein, welcome to the show. How are you?

Lloyd Blankfein:

Good, Preet. Thank you very much for having me.

Preet Bharara:

So we’re recording this. I like to timestamp it because it doesn’t come out for a couple of days. March 9th, 2026, about lunchtime. You have to do that these days in the Trump era because things change so rapidly. I think the pace has accelerated. So we’re at war with Iran.

Lloyd Blankfein:

What kind of war? I mean, technically not a war.

Preet Bharara:

When you have something that’s so volatile as that, how do you assess the risk? I mean, we don’t even know. Our own military, crack military didn’t know how long it would take and still doesn’t know how long it will take for there to be regime change. How do people get advised about their investments in the economy and the market when you have something’s unpredictable as a war?

Lloyd Blankfein:

It really is unpredictable. And if we had a firm prediction, I wouldn’t put much stock in it, because what was that? As a fighter, it’s great to have a plan, which goes until you get punched in the face and there’s always surprises. And I would say if you had a plan, you’d have to have 80 plans because you’d have to put out and draw all the contingencies if this happened or that didn’t happen. But I would say that …

And I’m watching TV and there are people going on and said, “We’ve really accelerated the world. Are we prepared for the …” I’m thinking to myself, “Are we worried that they’re going to get mad at us if we do something more?” I think they were pretty committed to being as mischievous as they could in the world and specifically against the interests of the United States and the West, and they were going to keep on going. And when they got beaten up, they were going to go back and keep doing it again.

So at the end of the … We’ll find out. This could devolve, but I think right now today, we’re better off than we were because we’re certainly no less motivated and it’d be hard to be more motivated to commit mischief. They just have less capacity, a lot less capacity to do it. And I think that, that’s a good thing and that has been accomplished.

I also think of another kind of thought experiment here, which is what if we … Do you ever go back … They’ve been out of the news for a long time and they really don’t wreak havoc around the greater world, they’re kind of a low regional threat. Take North Korea. When they’re in the news again and when they’re threatening and when they’re launching missiles over into the Sea of Japan and threatening the United States, don’t you wish we had done something about that when we still could do something about it, i.e. before-

Preet Bharara:

Before nukes.

Lloyd Blankfein:

Before the nukes. And you wring your hands and they don’t call you up and say, “You have five minutes to go.” Do you take it because they have all those missiles pointed at Seoul? And so you don’t do it, you don’t do it, you don’t do it, and now it’s too late. When you listen to those stories, don’t you wish you can go back in time and fix that before it was too late?

Preet Bharara:

I think about time travel often. There are a lot of things I’d like to fix.

Lloyd Blankfein:

Well, I think about so much traveling. I just think about the regret I have and whether that informs the future.

Preet Bharara:

So you think it was a strong move toward geopolitics?

Lloyd Blankfein:

I think it was. I think it was a strong move that the idea though that this is a good thing. It may not age well. We’re sitting here at a moment in time. We don’t know how it goes, but life is about probabilities and it could work out badly and have been a good choice to have made now. It just didn’t work out well or it could work out well and have been astute.

My thing was my algorithm is not necessarily one variable where, are they proximate? Are they so close to getting … Do we have time before they go nuclearized? To me, my algorithm includes, are they close to it? What’s their motivation to keep on getting it? And is this a time where you could do something because their air defenses are weak, the civilian population is in rebellion, our enemies and their allies are distracted? So that some combination made this as ripe an opportunity as we would ever have of doing something that if we missed, we’d look back and regret.

Preet Bharara:

Let me play mild devil’s advocate for a moment. Choices are not always binary with something as complicated as starting a war with Iran. It’s not just do you do something or not do something? So for example, some people might argue with respect to Iran, yeah, the strikes maybe were worthwhile. Taking Khamenei was maybe worthwhile, but how much thoughtfulness went into the preparation for the people to take back their country? And the experts that I hear, and I’m not an expert on Iran, might say, “Yeah, good move if you had laid the foundation, which did not happen.” So it looks like more of a off the cuff pugilistic act than a thoughtful, reasoned long-term strategy. It looks like tactics more than strategy and maybe not even tactics. Is that a fair criticism?

Lloyd Blankfein:

I don’t think so. Not because I think you’re wrong, I just don’t know and I think you don’t know.

Preet Bharara:

I don’t.

Lloyd Blankfein:

Right.

Preet Bharara:

I’m relying on the expert who keep let it extend.

Lloyd Blankfein:

Expert, but it depends which news station you’re watching and whose experts you’re listening to. I don’t know the answer to that.

Preet Bharara:

Yeah. On some minors, maybe not on this one, and I’m going to come to one in a moment, but when we talk about economists and how wrong they are often. Consensus is developed.

Lloyd Blankfein:

Again, we’re a polarized country. You can turn on Fox, you can turn on CNN and you think you’re listening to different eras and different countries and different planets.

Preet Bharara:

Sometimes you turn on Fox today and Fox a year ago and you think you’re in a different era.

Lloyd Blankfein:

No, no, that’s true, because-

Preet Bharara:

And a lot of MAGA folks-

Lloyd Blankfein:

I understand.

Preet Bharara:

… said, “We like this guy because he’s not going to go to war with Iran.” You know who said that? This guy said that.

Lloyd Blankfein:

No, I understand. The right-right and the left-left are at war with their own consensus, and so we’re leaving in that area. I’m not arguing the point that you’re wrong. I’m just arguing the point that I don’t know. And my best guess is that you don’t know. And when you listen, there’s a lot of selective perception that goes on the world. People listen to people who agree with them. I just don’t know. So I don’t know. I know that if I were doing this, I would have planned-

Preet Bharara:

You would have been more thoughtful about it.

Lloyd Blankfein:

What?

Preet Bharara:

You would have had a better plan.

Lloyd Blankfein:

I don’t know if it would have been better, but I am in the contingency planning businesses from the second I wake up and I wouldn’t be … But I don’t know that they’re not. In other words, when I look, I live through-

Preet Bharara:

You think that Pete Hegseth is in the long, elaborate, detailed, reflective, deliberative planning mode?

Lloyd Blankfein:

I think that the military over the last couple of years had been very capable. Don’t forget, I grew up, my zeitgeist was Jimmy Carter launching helicopters into the desert without sand filters and having them run into each other and fall down. I think these people have shown pretty much competence. And again, I don’t think Pete Hegseth is doing the planning.

Preet Bharara:

Well, that’s the best news I’ve heard all day.

Lloyd Blankfein:

Well, it’s not news. It’s a question I don’t know.

Preet Bharara:

Yeah.

Lloyd Blankfein:

But I’m willing to say what I don’t know.

Preet Bharara:

Yeah, no, so am I. And it’s most things I don’t know about. Going back to the economy, how’s this going to shape out?

Lloyd Blankfein:

Well, if it’s resolved soon, it will be a blip like most of these macro events that go quickly.

Preet Bharara:

So it will be temporary if that’s the case?

Lloyd Blankfein:

Yes. Nobody will use the word transitory anymore because that’s now been expunged from the vocabulary, but it’ll be temporary as these things usually have tended to be. But if this is a long, drawn out shutdown of the straits, and as a result, there’s no place to put oil. And so they’ve run out of storage and they’ve run out of ships to put it on. They have to shut down, then it’ll take a while to put up. You’ll have higher energy prices and threat of economic slowdown as a result of it. It’ll be inflationary on the one hand and it’ll be bad for growth on the other.

And so everyone will be talking about stagflation, which is the worst possibility, which cuts down the optionality of the Fed. That won’t be good. That is a possibility. It’s not my base case. I think if things are really bad in the short term, as we sit here today in the price of oil, at least the last time I looked at it was up over $100. Maybe by the time this is shown, it’ll be 180 or 80. I don’t know. As we sit here today, there’s a lot of uncertainty and I would be contingency planning for both sides of it.

Preet Bharara:

Yeah, of course.

Lloyd Blankfein:

By the way, in the risk management business, which I had to do for a long time, I had to worry about the eventuality that things might work out well, which is highly consequential there.

Preet Bharara:

God forbid.

Lloyd Blankfein:

Well, there’s a million people out there who’ve gotten out of positions, bought hedges, invested a lot of money in protecting themselves.

Preet Bharara:

And they missed out.

Lloyd Blankfein:

That protection, if things work out, that they paid a lot of money for, will be worth zero. It’s highly consequential to people on both sides. That’s the nature of volatility.

Preet Bharara:

Were there things that the government or the Treasury Secretary or the Energy Department or others should they have done to prepare us for that or to prepare the American public for that?

Lloyd Blankfein:

I think if you had a long timeframe, I think the regret would have to be that they didn’t fill the Strategic Petroleum Reserve. That was taken down in the prior administration to lower costs, blah-blah-blah. And everybody’s loath because everybody likes lower oil prices. And if you’re a president trying to fight inflation, which every president is, the last thing you want to do is compete in the marketplace and bid up the price of oil while you’re feeling. So everybody defers that. I bet in hindsight, I’m sure they wish they hadn’t.

Preet Bharara:

You mentioned inflation. How are we doing on inflation?

Lloyd Blankfein:

It’s sticky. It’s sticky at levels that are survivable.

Preet Bharara:

What’s survivable? What’s the range of survivable inflation?

Lloyd Blankfein:

We’ve been granted a target by the Fed, and so that’s the relevant number, which is 2%.

Preet Bharara:

2%, yeah.

Lloyd Blankfein:

And it’s been over that for at least about six years now. It was way over it for understandable reasons during the COVID and because of supply chains, which by the way, turned out to be transitional, even though it wasn’t as quick as people thought, but it’s still sticky at too high level. So I think the Fed’s druthers would be to keep a restrictive economy to get inflation back, but not at the expense of the other side of their mandate, which is full employment, which is GDP related. And so they’re going to be in a bit of a quandary. Probably, my guess is they do nothing and watch it for a while and see how things resolve.

Preet Bharara:

Are you worried about the independence of the Fed?

Lloyd Blankfein:

Yes. And when you say am I worried, I would say that the independence of the Fed is absolutely essential and there is no value to undermining it.

Preet Bharara:

So why does he do it?

Lloyd Blankfein:

I think my guess, and I have no degree in psychiatrist, and I think you’d need a specialist to figure it out all out, but I think he’s gotten pretty far in trying to influence people to do things that he thought was a good idea. The reason why it’s a bad idea, universally bad idea is we are a big borrower in the world. Our creditors are worried about our default.

How does the US default? When people lend us money, how do we default to our creditors? We can print dollars so we can always return the dollars that we borrowed from them. The question is always going to be, what are those dollars going to be worth? So the way the US defaults on its debt is by undermining the value of the dollar, inflating the currency so the purchasing power isn’t there. The guardian of our creditors’ interests is the Federal Reserve, which is anti-inflation and preserves the value of the dollar in that respect. And if they lose that protection, our creditors are either going to only lend to us at a much higher price or they’re going to stop lending to us altogether. Undermining the Fed is foolish. The Fed’s independence is foolish.

Preet Bharara:

How do you think that’ll play out?

Lloyd Blankfein:

I think people will take … They have their office for a long time. I think the Fed, my base case is the Fed will protect its independence. Are they in the political dialogue? Do they read the newspapers every day? Are they influenceable? Yeah. But by and large, and if people don’t always know if they’re drifting in a direction because they want to read good things about themselves opposed to bad things about themselves. I’m sure the political arguments and charges has something of an influence, but I think the Fed, everyone has an interest in preserving the Fed. In some ways, the Fed is a lot like the Supreme Court. Obviously, the Supreme Court is constitutional. The Fed is legislative.

Preet Bharara:

Do you think there’d be an uprising in the streets over the Fed? Do you think a lot of people are following?

Lloyd Blankfein:

That’s a little more esoteric because you’re dealing with the economy, but something who would necessarily think you’d have an uprising over the Supreme Court? Yet we had that. FDR was an awfully popular president.

Preet Bharara:

He was.

Lloyd Blankfein:

And he got killed on his court packing scheme. I can’t think of another way where he got singed like that by going after that institution. And I think going after the Fed, you saw the backlash even from the core. His core Republican base didn’t like going after the independence of the Fed.

Preet Bharara:

So combining the Supreme Court and the economy for a moment, there was an important decision about tariffs and the authority of the President to impose the terrorist he imposed through the IEEPA statute. Pleased with that decision?

Lloyd Blankfein:

I’m pleased with that decision, because I’m pleased that there was an affirmation of the separation of powers and what I think is the black letter rule of the constitution.

Preet Bharara:

As a lapsed lawyer, you appreciate it?

Lloyd Blankfein:

Yes. I’m still a lawyer.

Preet Bharara:

Especially? Okay.

Lloyd Blankfein:

Yes, I appreciate it, especially, but I don’t know. I think I’d appreciate just as much as a citizen of the Republic.

Preet Bharara:

Do you maintain your bar membership?

Lloyd Blankfein:

I do.

Preet Bharara:

You do?

Lloyd Blankfein:

Well, you have a retired status, so yes, I’m a member of the bar and of California too.

Preet Bharara:

Do you do gigs? Could I hire you?

Lloyd Blankfein:

Oh, you could hire me.

Preet Bharara:

You can advocate for me this summer.

Lloyd Blankfein:

I would have to reactivate.

Preet Bharara:

You have to run conflicts.

Lloyd Blankfein:

You have to reactivate, but-

Preet Bharara:

There’s a lot of conflicts you would have.

Lloyd Blankfein:

But you could take me out of the law, but you can’t take the law out of me.

Preet Bharara:

That’s a very important thing. Did you ever think this is off? But my brother is a “lapsed lawyer” and became an entrepreneur of some success. And I’ve asked him the question, did he think that it would’ve been better to have gotten a business degree? And he says, “No, the law degree serves him better.” How do you feel about that?

Lloyd Blankfein:

Well, two roads diverged in yellow woods. I didn’t take both paths, so I can’t compare the two, but there was a lot of content and a lot of substance. I always thought of business school as a kind of a socialization into the business world and not as much hard-driven content. So there was-

Preet Bharara:

Our business school listeners are all going to write in now.

Lloyd Blankfein:

Yeah, what the heck, go ahead, be my guest. But I would say that it would’ve been better if I’d just gone to work, all the things, because I got a lot of-

Preet Bharara:

Really?

Lloyd Blankfein:

Yeah. Look, you are who … As Popeye said, “I am what I am, what I am, boop, boop.” I am a lawyer. I went through that. I don’t know how I would be if I wasn’t that, but I don’t know if learning civil procedure and conflicts of law is really helping me more than-

Preet Bharara:

No, I’m sure that wasn’t, but there’s-

Lloyd Blankfein:

There’s a lot of ways of having discipline.

Preet Bharara:

Were you as rigorous as a thinker and problem solver before law school as after?

Lloyd Blankfein:

It’s hard to go back and know. But by the way, law school was three years. I’m sure I would’ve evolved in those three years. It’s not a question of whether I had got from frozen in an iceberg.

Preet Bharara:

I’m not advocating for law school.

Lloyd Blankfein:

No, but I’m saying it’s not as if I had gotten frozen in an iceberg. I would otherwise wile away the time doing nothing, it’s those three years in law school versus three years in some other activity where-

Preet Bharara:

Well, you picked tax law.

Lloyd Blankfein:

Yes.

Preet Bharara:

I don’t know that people know this. Lloyd Blankfein here began his career-

Lloyd Blankfein:

Not good you’d think for a man of action like myself.

Preet Bharara:

Tax law. Well, no, I’ve always said, and I have a lot of friends who are going to be annoyed by this, that I want to be careful. I’m going to offend by implication a lot of people.

Lloyd Blankfein:

Oh, come on.

Preet Bharara:

The smartest lawyers are often tax lawyers and antitrust lawyers. I think it’s very difficult. So you chose an area that some might say was not the most scintillating.

Lloyd Blankfein:

It’s hard.

Preet Bharara:

It’s fairly rigorous and complicated.

Lloyd Blankfein:

It’s hard and it’s complicated and my motivation probably was more commercial. I had gone through school. I had accumulated a lot of debt. I wanted to make sure they had a good job and that was esoteric and hard and really in kind of in short supply.

The other thing is that the tax lawyer’s there to structure transactions, but doesn’t have to sit there and document it. So there’s a sense of being an expert-expert, like a specialist that comes in. And there was something alluring about that. And the life was because you got to work. If you’re a corporate law assigned to a particular transaction, you trudged through that forever. If you were the tax lawyer, you dipped in, helped restructuring and then did four other things on the same day. So I thought it was attractive in that way, but honestly, it was also the commercial idea that, that was an important skillset that a lot of people didn’t want to do and I was willing to do it. And it turns out, how wrong was I because I wasn’t willing to do it. I wasn’t willing to do it, but it seemed like a good idea at the time.

Preet Bharara:

You were wrong. I don’t begrudge you doing other podcasts, but you did one a week ago on Bloomberg and they gave the title, “Lloyd Blankfein says the market is due for a reckoning.” But embedded in that, you said, “I think we shouldn’t have blue companies and red companies,” which I found very interesting.

Lloyd Blankfein:

Well, those would do different things.

Preet Bharara:

I know. So I’m going to start with that one. What do you mean by blue companies and red companies?

Lloyd Blankfein:

I think people are shoving microphones. In this polarized world that we’re in, everyone who’s standing still for more than four seconds has a microphone shoved into his face and say, “What do you think about this issue or that issue?” The beginning of our conversation where I say, you’re saying something and characterizing it as obvious except to the other half of the country. And I think there are a lot of things that should be decided and opinions rendered and should be in the political sector. I don’t think everything that gets debated in the political sector has to go into the commercial sector.

Preet Bharara:

So in a different context or a related context, you are not of the view that a CEO of a company must make a public statement about every issue of the day.

Lloyd Blankfein:

A hundred percent. Correct. Now, there are some things where you not only can, but you should.

Preet Bharara:

So how do you pick? That’s the tricky part, because-

Lloyd Blankfein:

It’s very tricky.

Preet Bharara:

Then the third time when you don’t speak, people in for a lot of things then.

Lloyd Blankfein:

It is kind of tricky. And sometimes, I’ll give you my set of rules and you could see how permeable that membrane is because I would say in areas in which your job gives you special expertise. So if they’re about to have a government shutdown or they can’t pass a budget or tariffs issue and you’re at Goldman Sachs and you live in the economic world and people reasonably think you’re pretty-

Preet Bharara:

You’re making a statement about that.

Lloyd Blankfein:

… pretty expert. You can tell what you think are the consequences because that’s important information that you have, if not exclusively, then selectively.

Preet Bharara:

What about if George Floyd gets killed by a cop?

Lloyd Blankfein:

I would say another thing, another area where you should get involved. As a CEO, you’re the champion of your people in their jobs. And so I took a very, very prominent and strong stand, for example, on marriage equality because we had people, we were always moving people around the world, their partners couldn’t always move with them, couldn’t always get healthcare for the partners in the same kind of way. And in order for people to be themselves and do their jobs, I took a stand on that.

Preet Bharara:

What about when Hamas kills Israelis on October 7th?

Lloyd Blankfein:

I don’t know that’s-

Preet Bharara:

You’re already showing how tricky it gets.

Lloyd Blankfein:

Oh, no, no, no. I started out by saying it’s a tricky thing. I would commiserate, and of course, if I were in my old job, I’d have people who were living in Israel. And so I would be there and I’d be talking about the horror of it. And to me, that’s so overwhelmingly clear. I don’t think there’s a real cost in terms of taking a position, but take harder things. Some of the commercial banks said they’re not going to finance gun companies. Well, half the country, probably more than half the country, likes the Second Amendment. I’d say that gets tricky.

Now, in the social circles I hang in, that’s not a very tricky question here in very blue New York City, but you go a little bit west of New York or east of California and it becomes a lot trickier question. What is your expertise? The other thing I think of is the only reason why people are interested in a CEO’s opinion anyway is because of the platform they’re in. Maybe some people have risen past the platform and have important status in and of themselves, but I think you have a duty to your company and your shareholders. And these are issues for the political sector, not for the commercial sector. So again, if you have special expertise to be the champion of your people, and that gets very loose around people, but to go inject yourself in every social debate, political debate is … And so I shorten it and say, I don’t think there should be blue companies or red companies.

Preet Bharara:

I think that’s a fair point. So going back to the headline, the market is due for a reckoning. When, sir? Everybody wants to know when.

Lloyd Blankfein:

Yeah, no, I set my alarm, but had an indeterminate hour on it. I would say that … And if my tenure was any indication, we always had the crisis of the century once every four or five years. I could take from the dotcom bubble and long-term capital and the Russian default. And it just seemed the crisis of the century all that time.

And one of the things that happens then is when you have that kind of a reckoning and people are forced to disgorge and sell positions and raise cash. You suddenly find all the assets you may have accumulated on your balances, you find out the true value of those things because you have to sell them. And the only time you really know the value of something is when you find a price at which there’s a buyer to buy them, and that hasn’t happened for a long time. A lot of assets … We haven’t had a kind of reckoning where the market has completely dumped people who’ve been scared to death and have sold anything they could sell. We haven’t had that in a long time.

Preet Bharara:

And you quote from the Godfather, right? Every 10 years, there’s got to be a bloody war.

Lloyd Blankfein:

Yes. When one of the capos is trying to assuage Mike and said, “Okay, we can handle this gang war because …” And you know something, at the end of the day, they’re good because a lot of grudges build up over the 10 years and we have to let people give vent to them so we could clear them out. And I’d say that we haven’t had a good gang war in the market for a long time. And then a lot of things have built.

Look, we’re coming off a period where I know, not to get esoteric, but a lot of inventory has been built up on the balance sheets of private equity. We’re talking about private credit. These things have built up over a period of time. We’ve just gotten through a market with equities on record high levels with a very, very favorable financing environment, and a lot still hasn’t been sold. Really? So is it going to be easier to do that if the market craters or if financial get conditions so bad that no one is lending anymore into the market?

So I think the longer you wait, the longer the amount of time between such reckonings, the more difficult and painful it becomes because more … To just switch metaphors, you accumulate a lot of kindling on the floor of the forest. And at some point, there’ll be a spark that if the kindling wasn’t there, it wouldn’t have made a difference, but with the kindling there, it might set the forest on fire.

Preet Bharara:

I’ll be right back with Lloyd Blankfein after this.

People who listen to this podcast on a regular basis know I bring up this point frequently. On this issue of expertise and economics and in forecasting, you’re very good to say you don’t know. Lots of people hedge. Economists are kind of the same other than in recent times, I can’t remember if it was ’22 or I think ’22, where every economist and every financial periodical to a great degree predicted recession, and it never came. How should we think about the prognosticators on the economy?

Lloyd Blankfein:

I think you should think about it the same way I think about it. Yeah, I didn’t predict that. I would say, look, in my-

Preet Bharara:

I think it was it Bloomberg or the Economist said 100% chance. Who says 100% chance about anything?

Lloyd Blankfein:

I think, look, there are two sides to my business life at Goldman when it comes to markets. There was a let’s bet and try to get things right and steer ourselves or the other sides of other people’s transactions. We could decide how long we keep a position, when to hedge it or not, where we want to have a view of what we think is going to happen.

Then there were periods of time where you’d almost blow a whistle and say, “We are now in risk management mode, where I just want to know contingency planning.” Don’t tell me about the probability or improbability of something happens, because on certain moments, you can throw that all out the window. All assets become correlated. It doesn’t matter what you thought the probabilities were. Given enough time, it’s not that anything can happen, it’s that everything will happen.

So I’d say in risk management, don’t tell me your opinion. Just tell me what could happen and what’s your plan if that contingency happens? And I think we’re in kind of that mode now. I don’t know if the Strait is going to be closed. I don’t know if oil’s going to go back. By the way, oil could be 60 or 160, depending on what happens. I think you have to have contingency planning for that to happen and to stand up and say in a moment like this, “Here’s what I think.”

I think for part of the business, people should do that. But when you’re trying to manage your risk, the last thing I want to hear is people’s opinions about the future. And with economists, look, economists are weighing 800 variable. Each one changes it from negative to positive. So you get 799 wrong and the 800th variable that they didn’t get right turns it all into a coin flip.

Preet Bharara:

Why the book? Why now?

Lloyd Blankfein:

I started, I was out, COVID hits, so I started to get to the irony of I leave so I don’t have to travel. And two minutes after I leave, no one has to travel. I said, “Wait a minute.”

Preet Bharara:

Is that causation, or correlation?

Lloyd Blankfein:

Yeah. It’s a freakish surprise just like the markets, so you just don’t know. And so it was a black swan event. And so I say, “Hey, got by the clocks. I was only kidding.” But anyway, I had time on my hand. I like to write and I like to write short stuff. And so if I thought I was going to end up with a memoir that I was going to publish, I never would’ve started. It was just too formidable. But I started doing little things. I started writing chapters and-

Preet Bharara:

Did you write it chronologically?

Lloyd Blankfein:

I did, and then I switched. I wrote it chronologically because the early days were easy because anybody who could possibly contradict me was dead or non compos mentis. When I got to-

Preet Bharara:

So how much of the early part is made up, sir?

Lloyd Blankfein:

Well, none of it is all made up, but I just didn’t have to deal with challenges the way you challenged me. They’re not right, but it’s irritating. And so I didn’t have to face that. And then when I got to things like working my way through Goldman Sachs and the financial crisis, 15 other crises along the way. I said, “Wow, this is a little harder.” So I said, “I’ll deal with it the next day.” I put my pen down. I picked it up three years later. That’s when I got some help also. I got a guy to help work with me and structured.

Preet Bharara:

You got to do that. That’s helpful.

Lloyd Blankfein:

Yeah, because I didn’t have the discipline. And then it ended up being kind of fun.

Preet Bharara:

So I’m fascinated by the foundation, your foundation in life, which I want to talk about, and you spent a lot of time on it. So you grew up not wealthy.

Lloyd Blankfein:

I grew up not-

Preet Bharara:

Not impoverished, but working class in the projects in Brooklyn, fair?

Lloyd Blankfein:

I would say the genius of America is like 80% of the country thinks they’re middle class, but I was probably bare. I grew up in public housing in the projects. I went to Thomas Jefferson High School in East New York, Brooklyn and failed high school. I went through a police … The gym, there was no gym, they converted into a police station inside the school.

Preet Bharara:

Yeah, no gym was it? That’s tough.

Lloyd Blankfein:

No. I took a city bus to get there and you looked out the window and you got close to the school if it was a crowd around-

Preet Bharara:

Did you figure out a way to swim?

Lloyd Blankfein:

I did. I did.

Preet Bharara:

You were a swimmer?

Lloyd Blankfein:

I was bland and I still am.

Preet Bharara:

As you are now.

Lloyd Blankfein:

And I still am. And I still am.

Preet Bharara:

As you are now, that was an assist. So you came from very, very modest, poor means.

Lloyd Blankfein:

You know, look … Go on.

Preet Bharara:

And you became the head of Goldman Sachs. Other people that you met along the way who reached those heights had privileged backgrounds. What’s the difference between if there is a difference? Once you and others reach that pinnacle and you’re friends with a lot of them, and you talk about them during the financial crisis and otherwise, is there a difference in how they did their job and how you did your job based on different origins?

Lloyd Blankfein:

It never registered with me that way. I’ll think more about it. I think almost everyone is a striver of some sort or another. There are people who come from very wealthy-

Preet Bharara:

You don’t get there unless you are.

Lloyd Blankfein:

You don’t get there unless you are, and it helps to have a chip on your shoulder. It helps to be a little bit insecure. I have met people in my life, and I say this, where it looked like they were voted most likely to succeed from kindergarten on, and I wasn’t one of them. And a lot of the people-

Preet Bharara:

Didn’t someone say to you, you’re least likely to succeed?

Lloyd Blankfein:

Yes, actually I did.

Preet Bharara:

That guy’s a jerk.

Lloyd Blankfein:

No, no.

Preet Bharara:

No?

Lloyd Blankfein:

He’s actually a good friend.

Preet Bharara:

I would harp. Did that give you some inspiration to succeed?

Lloyd Blankfein:

Well, he said it now in hindsight, looking back, he said, this was one of my college classmates who said he would’ve been voted least likely to succeed, which by the way, there was truth to that. I told you I graduated. I couldn’t even graduate. I barely graduated in a major, and he was right. I was a bit of a late bloomer, which is why I like reading biographies, especially of late bloomers. But I would say people are always striving for something. I know people who grew up in families with a lot of money and they’re striving for some approval, or they’re trying to distinguish pit the-

Preet Bharara:

Or they’re trying to match their parents.

Lloyd Blankfein:

Pit the younger is always working hard to outdo pit the elder or something like that. So there’s a lot of different kinds of reasons why people have a chip on their shoulder. There’s a lot of different currencies in the world. Nobel laureates compete. It’s not for money, it’s for-

Preet Bharara:

One of the great talks, somebody who used to work with me gave a great talk about competitiveness. And we came from the US Attorney’s Office and it’s about truth and justice, but we wanted to do better than the Eastern District of New York, and the FBI wanted to do better than the DEA.

Lloyd Blankfein:

Of course.

Preet Bharara:

Everyone competes whether you like it or not, no matter what kind of … Even poets-

Lloyd Blankfein:

We want that.

Preet Bharara:

Poets compete.

Lloyd Blankfein:

Of course.

Preet Bharara:

That’s a line that never left me. Poets compete.

Lloyd Blankfein:

Of course, because they vie for … I remind you of that old joke. Why are academic politics so bitter?

Preet Bharara:

Yeah.

Lloyd Blankfein:

Why are academic politics so bitter? Because there’s nothing at stake. So in other words, everybody gets paid the same. Everybody, all of a sudden, who has the better parking spot becomes what everybody’s vying for.

Preet Bharara:

It doesn’t always work out that way, because you express a concern. It’s super interesting to me. And I’m paraphrasing it. You didn’t have much of anything when you were growing up. Your kids have a lot. Their father was the chairman of Goldman Sachs. And I think you said something like, “I alternate between wanting to give them everything and begrudging giving them everything, because I don’t want them to have everything.” Did I get that right?

Lloyd Blankfein:

Yeah. And look, it’s a bit of self … I hope, I think self-awareness on my part, because when I think that, I get reminded. My wife has said, “Lloyd, don’t hold … They didn’t grow up the way you did. Give them a break sometimes.” And she’s right. She’s 100% right. And sometimes, sentiment shifts up and things are out. I see things. I have great kids. They went through a lot. They’re striving. And by the way, they have burdens that are different than other kids.

I mean, there are benefits to the position they grew up in, the demystification of the world. They met fancy people their whole lives. They’ve been to fancy Ivy League schools, so they don’t have to wonder what people know at Ivy League schools that they don’t know at state school. The answer is nothing, but they know that. So they’ve had advantages that come with that, and there are burdens that come with that.

The comparisons that get made, having to show that you’re not taking advantage of your position, so they have to get in earlier and stay later so that nobody thinks that they’re getting a gift handed to them. So I always said to them in my more rational moments, if you handle the burdens of your position with grace, you can enjoy the benefits, but I’m not always … I’m a person too, and I have my own sentimental shifts. So I say they’re half in jest, but it’s a real thing. I really want to give things to my kids that I didn’t have. And then every once in a while, I want to point out to them, look at the luxuries you have that I never had, and I think it’s just not fair.

Preet Bharara:

You do the uphill both ways in the snow.

Lloyd Blankfein:

Yes. Yes. I do that sometimes too, and then I think better of it. My sanity gets restored, and if it doesn’t, my wife kicks me and says, “Really, Lloyd?” And she’s absolutely right.

Preet Bharara:

Where does she kick you?

Lloyd Blankfein:

What?

Preet Bharara:

Where does she kick you?

Lloyd Blankfein:

In the butt.

Preet Bharara:

Okay. Why is that in the shin, the butt?

Lloyd Blankfein:

Yeah, yeah.

Preet Bharara:

We get into all the details here in this podcast.

Lloyd Blankfein:

Yes, good. I don’t have nothing-

Preet Bharara:

When you see a resume as you were progressing up the chain and from someone who is clear had your kind of background, as opposed to a privileged background, do you look at that resume differently? Are you more likely to hire that person?

Lloyd Blankfein:

The one, A, contribution I made at Goldman, I got very involved. We had this 10,000 small … Anyway, we had these partnerships with community colleges and other places, and I got to know people at LaGuardia Community College. In fact, it’s the only time I ever made a graduation speech was at LaGuardia.

Preet Bharara:

That’s it?

Lloyd Blankfein:

Yes. It’s the only one. I’ve gotten asked, but that’s the only one, and I appreciate it. And I had people … I asked people in the firm to interview more people from CUNY, the City University System, because the people … I think the average at Harvard maybe probably is a lot higher than the average in the CUNY system, but the tippy-tippy top of both, one doesn’t have anything on the other because these are people who’ve come through. A lot of people are children. Our first generation here in the country, they work … The people, especially in community college, they work full-time jobs, they study at night, they’re highly motivated. And I’m not saying they’re better as a result, but I’m saying that elite institutions, which I include Goldman Sachs, shouldn’t only interview at elite places.

Preet Bharara:

Totally agree with that.

Lloyd Blankfein:

And so I wanted them to do that, and I made that happen. I think it’s probably still going on.

Preet Bharara:

We overvalue credential, you think?

Lloyd Blankfein:

Yeah, but there’s valid reasons for doing that. You don’t have to fall down every manhole. I take advantage of warning signs. There’s things that are validated in our lives. We don’t test every proposition ourselves. We don’t touch … If you touch a hot stove once, you don’t go over to the stove and assume it’s cold and just put your hand on it.

Preet Bharara:

Or if you’re smarter, you learn from someone else touching the hot stove.

Lloyd Blankfein:

Exactly. But a good resume is a source of validation. So statistically speaking, you’re going to be better off. But if you’re Goldman Sachs and you’re hiring 4,000 people a year, and you have the means to go beneath that, sir. If I was hiring one person and I couldn’t interview 700 people, I think I would screen the resumes and hire the ones with the terrific resumes. If I have a whole infrastructure dedicated to it, I could get beneath that first level and interview more people, including people with unusual resumes.

Preet Bharara:

Do you think that we valorize college? I had a Harvard professor who was a professor of mine, Michael Sandel in the show, and he’s written a book on meritocracy. You say something so interesting in the first part of your book where you say, “The kids you went to school with, their parents didn’t go to college. You’re never surprised when you meet uncredentialed people who are very smart. You’re surprised that other people are surprised.”

I guess it’s further to the point we were talking about a minute ago. Are we leaving people behind because of the prejudice people have in favor of college? Are we doing enough about … This is another compound question, sir. Are we doing enough to bring people along in this country and give them opportunities if they’re not going to college, which is two-thirds of people? Final question in the compound sir, is do you have a view of whether or not it was fair, equitable, or smart to forgive college debt?

Lloyd Blankfein:

Sure. I think we are doing a disservice anytime we take a shortcut. What are shortcuts that people take, legitimate or illegitimate? Mostly illegitimate because we’re talking about merit as opposed to the signs of merit, but people … Shortcut could be a college degree. A shortcut for some people is race. There are a lot of things that people are using as a shortcut. And it’s understandable why … Obviously, there are some distinctions that are invidious that you shouldn’t be allowed to make at all, but neighborhood you grow up with, if your parents went to college, these people make assumptions about how you were raised. There’s a lot of assumptions that people wait that just make life easier for people to live in, which I understand.

And to throw them all out, it’s crazy. What you have to do is you have to lean against it pretty hard. I think the debate about college in this country is coming from two sides. You have the people who think, “Well, it’s not qualifying you for a trade and you’ll never recover the cost of college or those four years back, go become a plumber and you’ll make more money.” And it’s coming from the far side when you have people like Peter Thiel and everything saying, “You know something? You may have 80 years of life ahead of you, but don’t waste the next three years or four years learning liberal arts.” Which I think is crazy and doing a very big disservice to people. I’m a very big fan of liberal arts if you can afford it. And so both sides take that position. But I would say the perimeter of college, my sister was older than me, she didn’t go to college and her kids did a-

Preet Bharara:

She had child early.

Lloyd Blankfein:

And a lot of people … Yeah, she had a child early. And people in my neighborhood that I grew up with, most of whom went to college or other, but they don’t have Ivy League resumes. I’d still engage with them. They have opinions on world issues that are as credible as any of my friends.

Preet Bharara:

Often better.

Lloyd Blankfein:

I don’t know if they’re better, but they’re as creditable as anybody’s. Look, we’re a democracy. We let everybody vote. We don’t have an IQ requirement or an Ivy League background or even a property requirement.

Preet Bharara:

Not anymore.

Lloyd Blankfein:

Not anymore.

Preet Bharara:

Not anymore.

Lloyd Blankfein:

That’s viewed as progress. And so I do think of the wisdom masses in a way tends to prove legitimate.

Preet Bharara:

You use the word luck. Successful people always talk about luck, and you’re a pretty straight shooter, I think. So I don’t think you use that as a form of modesty, but as between working hard and pulling yourself up by the proverbial bootstraps versus luck to become the head of Goldman Sachs, what’s the pie chart look like?

Lloyd Blankfein:

I probably would have done well. I don’t know what doing well would’ve meant. Just starting from the end and going backwards. I worked for Hank Paulson who was a terrific CEO of Goldman Sachs, would’ve been there for a lot longer if he wasn’t tapped by George Bush to become Secretary of Treasury, like a number of my predecessors at the-

Preet Bharara:

When are you going to run for governor of Jersey?

Lloyd Blankfein:

Phil’s already has a replacement.

Preet Bharara:

I know, but I was just saying Corzine-

Lloyd Blankfein:

I thought to myself-

Preet Bharara:

… you got to compete with that guy.

Lloyd Blankfein:

I know. It’s so funny because at some point somebody said, “Would you like to be mayor of New York?” I said, “I’d love to be mayor of New York. I just don’t know the world.”

Preet Bharara:

Want to run for it.

Lloyd Blankfein:

I don’t want to run for it, and I’m not sure they’re ready for a former head of Goldman Sachs. Then you had two Goldman Sachs people becoming governor in New Jersey and Mike Bloomberg was no shrinking, and it was a pretty big commercial guy. Maybe I just didn’t have the nerve to do it. And also, I already had a great job and I’m not sure. I had a terrific job already, but I certainly care about the city.

Preet Bharara:

In two sentences, what caused the financial crisis of 2007-08?

Lloyd Blankfein:

I’ll do it at one.

Preet Bharara:

I’d gave you two. I’d gave you some leeway.

Lloyd Blankfein:

There was a gigantic real estate bubble.

Preet Bharara:

Yeah. That sounds very passive. Who was to blame for that? That you need more than one sentence.

Lloyd Blankfein:

Yeah, but because you’re looking-

Preet Bharara:

I’m not saying criminally liable.

Lloyd Blankfein:

No, no, no. It’s the predicate of your question. There’s a million people. There were people who were running big companies who didn’t know that their securities were riskier than they thought. They had bad systems that didn’t tell them when there were signs emerging that these securities were bad. There were greedy people who bought four houses on putting no … Who were regular individuals who wanted to get aboard a train with there. It was a bubble.

Preet Bharara:

The premise that a home should be more affordable to people of modest means, is that a bad thing or a good thing?

Lloyd Blankfein:

No, I think everybody should have a home and ownership of homes is a valuable thing. I think it’s been a little bit-

Preet Bharara:

Which you’ve got to do it right.

Lloyd Blankfein:

Yes, you have to do it right. There’s been a bit of a distortion now because now switching into the … We could stay back in that era and come back to it, but right now there’s a lot of press because certain funds are buying houses, fixing them up and renting them to renters. And that looks like a bad thing because it looks … They’re competing in the market to buy homes, but the people they’re renting those homes to don’t have the down payment to buy their homes at that point. And that’s why they’re renting homes, so somebody has to put up the capital, buy the home, and rent it. It’s kind of a financing.

I think the political sector is trying to get on the right side of this home ownership issue, and they’re making some mistakes in trying to get on the right side politically. And by the way, it’s a worthwhile thing to get on the right side politically. There’s more home ownership in the United States than in other countries, and that’s a good thing. People take care of the homes they own less … Who washes a rental car was the old joke. Nobody. And so we want a …

Preet Bharara:

Is that true?

Lloyd Blankfein:

Yes. I’ve done a survey. No one in the entire planet has ever washed a rental car.

Preet Bharara:

You said an interesting thing about your time at Goldman during the financial crisis. There were really two crises for Goldman Sachs. One, existential, which is … By definition, that’s the biggest crisis. And the second, reputational. Some people might think that those are odd to join together, given how gargantuan the first one is because it’s literally existential. Describe the second one.

Lloyd Blankfein:

The first one contributed to the second one. Well, let me say it a different way. The first one when we had … And it’s a longer podcast, but I could tell you what we did that other people didn’t do. We marked everything to market. We saw the riskiness of things. By the way, we didn’t have an opinion whether it was going to go up or down from where it was. A lot of people thought it would go down, that it was temporary, and a lot of people thought, “Gee, it’s going to get a lot worse.” But the word went out because we were in a time like today where there’s stuff going on and we don’t know how it’s going to be, but we know it’s highly consequential.

We put out the instruction, really get close to home and sort of hedge yourself, don’t get too long and don’t get too short. And that was policed in the firm because we just saw the threats on the horizon. And so went through a period where a lot of our peers, and I use that term advisably, peers, lost a lot of money in it, which is why, by the way, at the end of the day, when people are crying out and say, “Look at the pain they inflicted on the world.” They obviously didn’t know the gun was loaded because they held all these securities and inventory and they blew themselves up. So it’s hard to say that they were promoting it to just to push it out on an unsuspecting public. They were unsuspecting themselves, but that was the existential, which we did very well. And so we got a kind of, how did you do it in a kind of a-

Preet Bharara:

I know. As if that’s something blameworthy.

Lloyd Blankfein:

No, they say, “How did you do it?” In a kind of worshipful getaway, and then it went to-

Preet Bharara:

But didn’t some ask it to imply you needed something untoward, right?

Lloyd Blankfein:

Yes, and then it went from how did you do it to how did you do it, in that kind of a more of a base voice. And I think there was a very focus on, because we came out of the crisis. Well, there was a number of factors at play. Goldman wasn’t very well known to the public. Go get a mortgage at Goldman Sachs or go to your Goldman Sachs branch, there isn’t such a thing. We’re a totally wholesale firm, very influential. Shame on us for not talking about what we did and not going on, not doing promotions of the firm, but we were always …

We came from an ethic where we wanted to put our clients in front. So we had a whole PR department to keep our name out of the paper. There were a lot of Goldman Sachs people involved in government, both in this country and outside of the country, including the Treasury Secretary and other people in the administration. At that point, by the way, eventually for both parties. Not exactly a revolving door because government hired from us. We for the most part didn’t hire from government, but there was a number of things that contributed with making us the focus. There was no point in going after Lehman Brothers, which was defunct or Bear Stearns, which was defunct or Citigroup that lost tens of billions of dollars or other firms like that. And we got a lot of reputational heat in those days, a lot.

Preet Bharara:

You want to talk about the Rolling Stone article briefly?

Lloyd Blankfein:

Oh, that was … Yeah, in my life, once somebody wanted to buy … We had a big investing group. We invested a lot of stuff, and there was a time at which somebody wanted us to invest in a soccer team, a European soccer team. And it would’ve been a good investment if it turned out. But I said, “You know something? We get excoriated in every newspaper at one time or another. The one thing I’ve never appeared in and don’t expect to appear in is Sports Illustrated and Rolling Stone.”

Preet Bharara:

Well, you’re wrong about that.

Lloyd Blankfein:

And guess what? I was wrong about that, but I still haven’t been in Sports Illustrated.

Preet Bharara:

So the phrase, I don’t know that people remember much about the article except-

Lloyd Blankfein:

Oh, it was just a phrase.

Preet Bharara:

… the colorful phrase, which is … Do you want me to say it or do you want to say it?

Lloyd Blankfein:

Oh no, go right ahead.

Preet Bharara:

Giant vampire squid.

Lloyd Blankfein:

Right. Which is an oxymoron, because vampire squids are actually kind of tiny. I googled it.

Preet Bharara:

They’re kind of tiny? Was that your PR defense? Was it internal inconsistency of the phrase?

Lloyd Blankfein:

Look, in Europe, Mediobanca, who are these guys? There was a lot of that swirling around. I think that, look, you’d get it today. We did well. It was finance in a world in which finance blew up.

Preet Bharara:

Did you care about that reputational “hit”? I mean, you’re not a toy manufacturer, right? You’re not a retail seller.

Lloyd Blankfein:

It did not hurt the business we had with our clients, but I cared about it a lot, of course.

Preet Bharara:

Why’d you care about it?

Lloyd Blankfein:

I live in the street. My kids go to school.

Preet Bharara:

So it was as personal as that?

Lloyd Blankfein:

Oh, it was very personal. I had people picketing 24 hours a day for a couple of years in front of … Yes.

Preet Bharara:

So the one-

Lloyd Blankfein:

Occupy Wall Street was-

Preet Bharara:

… was existential and the other was not material financially at all. It was personal.

Lloyd Blankfein:

Well, who knows? You don’t hear the phone that doesn’t ring. We didn’t lose any business that I could discern, but you don’t hear the phone that doesn’t ring. And by the way, that’s not my only concern in life is whether incremental. It was bad reputation. I’m sure it hurt our reputation with the wider community. Look, I don’t even know whether it hurt our recruiting. At the end of the day, the people in our-

Preet Bharara:

We helped in certain groups.

Lloyd Blankfein:

Who knows? But the people in our world thought we were pretty good. And dare I say, we would’ve had a crisis and probably would’ve had a recession because just of having to write off so much real estate assets that were overinflated. But if everybody had done what we did, we wouldn’t have had a banking crisis. And by the way, the banking crisis made the recession so much more severe because at the end of the day, governments don’t lend money to people. Central banks don’t lend money to people. They lend it to banks, which in turn distribute it.

And if the banks are in disarray and undercapitalized and under pressure to accumulate more equity, then if you give banks money, they just husband it and increase their reserves and they don’t lend it out. So when you have a banking crisis, look, just like if we had a recession today, and the banks were in good shape, the Fed would cut interest rates, things do. We wouldn’t like it. It might last a couple of quarters, but the tools are very deployable to sort it out. We had a recession that lasted a long time, in part because the banks themselves, the instrumentality through which these tools are applied was in bad shape.

Preet Bharara:

Was that financial crisis and recession like the forest fire? Is the forest stronger?

Lloyd Blankfein:

We won’t have that exact crisis again, but you always … Look, there are cycles in history because history doesn’t repeat, but it rhymes and people forget. I would say just look at the mere passage of time. We started talking about that were overdue for reckoning. The mere passage of time, the distance you get from the last crisis. You have a crisis, everyone’s careful. Everyone’s conservative. Nobody wants to go back there. Nobody wants to get close to any line that’s close to any line to get back there.

Then over time, you get a little bit bolder, you get competitive with your peers, someone’s making money on something else. By the way, this goes for firms and it goes for people in their individual lives. And you get further and further away from the last reckoning they had, and now you’re sort of doing things that are more liberal and less conservative.

And who knows? Maybe you’re even accumulating assets that were not wise to accumulate that you really should sell at a loss, but you don’t have to sell them at a loss because you can finance everything for a long time. And then guess what? A reckoning happens again and you look back and you say, “Oh my God, now you have to sell and go into the market at a time when the market doesn’t want those assets and you have to sell them into a bad market.” And that causes the cataclysm again and you say, “How did we get here? Didn’t we learn anything from the last time?” And the answer is people get scared, those people die, new people grow up. New people grow up. They didn’t have-

Preet Bharara:

It’s a cycle of life.

Lloyd Blankfein:

Well, it is.

Preet Bharara:

There are books.

Lloyd Blankfein:

There are books, but you know something? If you’re sitting in the trenches, if you’re fighting … I’ve read a lot of books about the Civil War, but I think it’s different reading about it than being in a trench next to somebody who has his head blown off next to you. I think that latter is a lot more vivid and stays with you a lot longer than reading the book.

Preet Bharara:

Andrew Ross Sorkin, he got a great new book also, 1929. That’s a long time ago. No one’s around. And you don’t have people who suffer materially.

Lloyd Blankfein:

But you read about it, but you’re not-

Preet Bharara:

It’s not the same.

Lloyd Blankfein:

It’s so not the same. And I’m making an analogy to people write about war, but it’s not quite the same thing as living through it and seeing the consequences of it and experiencing it. It’s vastly different. That’s why we have wars.

Preet Bharara:

That’s why we have poets.

Lloyd Blankfein:

That’s why we have wars.

Preet Bharara:

And we have historical poetry.

Lloyd Blankfein:

That’s why we have wars.

Preet Bharara:

Ladies and gentlemen, the book is Streetwise: Getting To and Through Goldman Sachs. Thanks so much for your time, Lloyd.

Lloyd Blankfein:

Thank you, Preet. Appreciate it.

Preet Bharara:

My conversation with Lloyd Blankfein continues for members of the CAFE Insider community. In the bonus for Insiders, we discuss how AI is transforming the workforce.

Lloyd Blankfein:

At the beginning of the 20th century, I think more than half the country was involved in agriculture. Guess what? They’re not now-

Preet Bharara:

Single digit percentage.

Lloyd Blankfein:

Yes, and they found things to do.

Preet Bharara:

To try out the membership, head to cafe.com/insider. Again, that’s cafe.com/insider. After the break, I’ll answer your questions about CBS pulling James Talarico from The Late Show with Stephen Colbert and the latest on Bruce Springsteen’s tour.

Now, let’s get to your questions. This question comes in an email from Nate. CBS has said that a Late Show with Stephen Colbert interview with the Senate candidate was pulled because of the FCC’s equal time rule. If that appearance would’ve violated the equal time rule, why don’t we see it enforced when other political candidates appear on television?

Nate, that’s a great question. So whatever you think of the controversy, because I think this question was submitted a couple of weeks ago, the pulled appearance from The Late Show seems not to have hurt James Talarico’s political prospects. A few days ago, he won the nomination for the Senate on the Democratic side in Texas. But at any event, you’re referring to a controversy that broke on February 16th when Stephen Colbert told his audience on air that CBS lawyers had blocked him from airing an interview with that Senate candidate, James Talarico.

That announcement raised a lot of eyebrows, because political candidates regularly appear on late night shows and in recent decades, the FCC’s equal time rule has almost never been applied to those appearances. But first, let’s take a step back and talk about what the equal time rule really is.

So as radio became the dominant form of popular entertainment in the 1920s, Congress worried that station owners could use the public airwaves to favor particular candidates. So to prevent that, Congress enacted what is now Section 315 of the Communications Act of 1934. What is Section 315? Well, it says that if a broadcast station allows one legally qualified candidate for public office to “use the station,” it must afford equal opportunities to other legally qualified candidates running for that same office.

So on its face, it sounds pretty fair, but in practice, it created a whole heck of a lot of complications. If a major party candidate appeared on air, the station could be required to offer comparable time, not just to the opposing major candidates, but to every legally qualified third-party candidate who requested it no matter how fringe. And some of those candidates may not be funny on late night television.

So in 1959, Congress amended Section 315 to create exceptions, four exceptions to be precise. Candidate appearances would not trigger equal time obligations if they occurred on, one, bonafide newscasts. Two, bonafide news documentaries if incidental. Three, coverage of bonafide news events. And four, and most importantly in Colbert’s case, bonafide news interviews. So that raises the next big question. What counts as a bonafide news interview?

Well, during the 1960 presidential election, the FCC ruled that appearances on late night entertainment programs did not qualify as bonafide news interviews. They viewed talk shows like The Tonight Show as entertainment rather than journalism. I wonder what Jon Stewart would think of that. But over time, as the media landscape evolved, the FCC changed their tune.

By the 1980s, we’re getting close to today, don’t worry. By the 1980s, talk shows had become major venues for public affairs discussions. So beginning in 1984, the FCC ruled that certain programs such as the Phil Donahue Show could qualify as bonafide news interviews. Eventually, that reasoning extended to late night formats as well. Then in 1992, Bill Clinton capitalized on the FCC’s more flexible approach, you may remember, if you’re of a certain age, his famous appearance on The Arsenio Hall Show where he played the saxophone. The appearance helped Clinton clinch the Democratic nomination for president, some people say, and cemented late night television as a major political platform.

Okay, so now fast-forward to this year. In January, the FCC issued new guidance emphasizing that past rulings recognizing specific programs as bonafide news interviews do not, I repeat, do not, automatically apply to all talk shows and that exemption determinations will now be made on a case by case basis. What could go wrong?

CBS has pointed to this new FCC guidance as the reason it blocked James Talarico from appearing on the broadcast version of The Late Show, but some observers believe there may be more to the story, particularly given various merger discussions that are going on. Other observers have even suggested that the Trump administration might have been trying to sandbag Talarico’s momentum in the Texas Senate race. As I said, didn’t work.

As controversies over censorship often do, the decision drew even more attention to Talarico, raising his national profile right before the primary. That’s what’s known in various circles as the Streisand Effect. According to polling data, that surge of attention helped clinch Talarico the nomination. Whether it carries him through to November is an open question. Stay tuned.

This question comes as a post on X from Tammy, who writes, “Now that Bruce Springsteen and the E Street Band have announced a new tour, how many shows are you planning to attend?” Well, Tammy, thanks for the question. I’ll get to that number in a moment. As many of you surely know, Bruce has been one of Donald Trump’s most outspoken critics during his second term, and Trump has not exactly taken that criticism in stride.

We’ve discussed some of their back and forth on this show before, including my own rather heated reaction when Trump referred to Bruce as “a dried out prune of a rocker.” Glass Houses. But the recent surge in ICE and border patrol activity in Minneapolis really seems to have activated Springsteen’s inner protest singer and turned it up to 11. After Renée Good was shot and killed by an ICE agent during an enforcement operation, Springsteen spoke at length from the stage at a New Jersey show, condemning the shooting and dedicating a song to her. And then after Alex Pretti was fatally shot by customs and border protection officers, Springsteen went a step further. He actually wrote a new song, released that protest song called Streets of Minneapolis. Then last month, to my great excitement, he announced the North American leg of his Land of Hope and Dreams tour with this message.

Bruce Springsteen:

We will be rocking your town in celebration and in defense of America, American democracy, American freedom, our American constitution, and our sacred American dream, all of which are under attack by our wannabe king and his rogue government in Washington DC. So come on out and join the United Free Republic of East Street Nation for an American spring of rock and rebellion.

Preet Bharara:

So to answer your question, Tammy, yes, I will in fact be joining the United Free Republic of E Street Nation this spring. Two shows, perhaps three, depends on whether my son is going to take me as his date or someone else, remains to be seen. But for all of you, the tour kicks off perhaps symbolically on March 31 in Minneapolis and wraps up two months later in our nation’s capital.

To close out the show this week, I want to revisit something my guest Mark Leibovich said during our last episode. Mark and I had a wide-ranging conversation about how voters today seem increasingly drawn to populist candidates, people who feel authentic, have big personalities, and sometimes even come with a bit of celebrity. But Mark also said something that caught the attention of one listener. He pointed out what he views as an exception to that theory in the state of Kentucky. This is what he said.

Mark Leibovich:

Someone who’s kind of boring and kind of milk toast, like say Andy Beshear, who’s a Democrat, can be an extremely effective politician in a place like Kentucky where he’s been elected governor a couple times. But I do think that there is definitely a hunger for someone who, one, can read as authentic and, two, who can be somewhat entertaining. Or if you’re in Kentucky, boring.

Preet Bharara:

Well, his characterization of Beshear is boring. That caught the attention of one stay tuned listener who happens to live in the Bluegrass State. Amy called in to let us know exactly how she felt.

Amy:

Hi, Preet, this is Amy and I am in Louisville, Kentucky, and I wanted to talk to you about your comments about Andy Beshear being boring. He is not. He loves his wife, he loves his kids. He wants healthcare for everybody. He’s a great guy. So if you ask me, he’s probably the sexiest man in politics right now.

Preet Bharara:

So I’ll be honest, hearing Andy Beshear being described as the sexiest man in politics was not exactly on my bingo card, but Amy, I take your point. Beshear is a Democrat who has twice won the governorship in a deeply red state, and that doesn’t happen by accident. I will say, by the way, Amy, lots of guys I know will be happy to learn that boring can be sexy and presumably sexiness like beauty is in the eye of the beholder.

Now, all of you listeners are also beholders and we were having a chat among the staff, the team here at CAFE. We wondered what you all think. It’s not the most important, weighty question in the history of the world, but we wanted to turn it back to the rest of you. Who do you think is the sexiest man in politics? So if you’re up to it and you want to answer this fun but frivolous question, write to us at letters@cafe.com or leave us a voicemail like Amy did at 833-997-7338. That’s 833-99-PREET.

Well, that’s it for this episode of Stay Tuned. Thanks again to my guest, Lloyd Blankfein. If you like what we do, rate and review the show on Apple Podcasts or wherever you listen. Every positive review helps new listeners find the show. Send me your questions about news, politics, and justice. You can reach me on Twitter or Bluesky @PreetBharara with the #AskPreet. You can also call and leave me a message at 833-997-7338. That’s 833-99-PREET, or you can send an email to letters@cafe.com.

Stay Tuned is now on Substack. Head to staytuned.substack.com to watch live streams, get updates about new podcast episodes and more. That’s staytuned.substack.com. Stay Tuned is presented by CAFE and the Vox Media Podcast Network. The executive producer is Tamara Sepper. The deputy editor is Celine Rohr. The supervising producer is Jake Kaplan. The lead editorial producer is Jennifer Indig. The associate producer is Claudia Hernández. The audio and video producer is Nat Weiner. The senior audio producer is Matthew Billy, and the marketing manager is Liana Greenway. Our music is by Andrew Dost. Special thanks to Torrey Paquette and Adam Harris. I’m your host, Preet Bharara. As always, Stay Tuned.