Goldman Sachs Ripped on Embrace of Global Warming

Goldman Sachs logoMy remarks at Goldman Sachs annual meeting today:

I regret that management opposes our resolution asking for a report on the science behind Goldman’s public positions on global warming. In 2005, Goldman Sachs established its “Environmental Policy Framework,” which stated:

“Goldman Sachs acknowledges the scientific consensus, led by the Intergovernmental Panel on Climate Change (IPCC), that climate change is a reality and that human activities are largely responsible for increasing concentrations of greenhouse gases in the earth’s atmosphere.”

IPCC, an organization of the United Nations, does not conduct its own scientific research but relies on the research of others, such as the Climatic Research Unit (CRU) of the University of East Anglia.

In late 2009, CRU became embroiled in the “Climategate” scandal, after hacked emails and documents were placed on the internet suggesting that CRU and/or collaborating scientists elsewhere:

1)    Sought to exaggerate data supportive of global warming.

2)    Sought to suppress data at odds with global warming, including the use of a “trick” to “hide the decline” in temperatures.

3)    Sought to exclude scientists skeptical of global warming from peer-reviewed journals, so that their research could be dismissed because it was not peer-reviewed.

4)    Exhibited a harsh and politically motivated prejudice toward skeptics, contrary to the spirit and ethics of scientific inquiry. CRU director Phil Jones characterized the death of a skeptic as “cheering news.”

5)    Destroyed original climate data on which some CRU findings were based.

Cheery no more, Phil Jones had to step down. He has now conceded that there has been no statistically significant warming since 1995. Jones also has conceded the possibility that the world was warmer in medieval times than now – suggesting global warming may not be a man-made phenomenon.

Global warming is cited as a rationale for “cap and trade” legislation. A 2009 Heritage Foundation study estimated that the Waxman-Markey bill would destroy over 1.1 million jobs, hike electricity rates 90 percent, and reduce the U.S. gross domestic product by nearly $10 trillion over the next 25 years.

Mr. Blankfein, I read in the newspaper that you live in a condo of more than 6,100 square feet, and you have a beach house that’s even bigger.

Now don’t get wrong. If wealth is honestly acquired, I have no problem with people living in big houses or being driven to work. This is America. But sir, electricity is a basic necessity, like food and shelter. When you want to raise the price of electricity for ordinary people to FORCE them to use less, your own energy consumption is fair game for scrutiny.

The federal government is in the process of becoming the dominant force in the energy, financial, housing and health care sectors of the economy. It is clear that the present administration is socialist in orientation and wants our nation to look something like Europe, with massive debt, permanent unemployment, endless entitlements, near-confiscatory taxation and a future that will certainly be less stable and prosperous than its past.

Just look at what is happening in the streets of Greece this week. Boy, shouldn’t we be grateful to Mr. Viniar and the other Goldman executives who raised all that money to help make it possible here?

Another symptom of Europe’s decay is the slow death of free enterprise in favor of more centralized, controlled markets dominated by the politically connected and those who already enjoy economic power. The deal is that the rich will be allowed to stay rich if they support socialism for everyone else. I’m sure this idea appeals to some people here at Goldman. And what better scheme to reinforce this model than to impose massive taxes on energy use and to create carbon credits to be traded on exchanges owned by companies like Goldman Sachs.

I understand that this idea of trading carbon credits was first proposed to Goldman Sachs by Enron. It’s appropriate. Carbon Dioxide is produced by many natural processes. It is what we exhale. As we have seen, CDOs and synthetic CDO can serve as the vehicles for fraud. But what is more fraudulent than a carbon credit? It is literally the securitization of thin air. Forget about toxic mortgage securities. If enacted, cap and trade would be the most audacious fraud in the history of financial markets.