The last few weeks have seen Goldman boss Lloyd Blankfein (and friends) doing an assortment of PR rounds in the run up to bonus season. There have been various attempts to quell the tidal wave of Goldman criticism including quiet defiance, the religious angle and then the ‘we are the most productive people in the world so we deserve it’ thing. All had their merits but they didn’t exactly deal with the underlying reasons for the criticism.

To sum up the key factors – people feel a little aggreived because of: Goldman’s participation in the derivitaves markets that helped cause the problem in the first place; its government assistance in the form of cash (TARP, now repaid, and through bailed-out AIG contracts) and government guarantees on its long-term debt; access to cheap cash from the Fed courtesy of their commercial bank status (used amongst other things to buy U.S. Treasuries profiting on the spread) and the fact they exist at all in a market with less competition – a market that has been very busy generating fees for banks dealing with all the government issued debt.

Now the fact that Goldmans simply took advantage of a situation that emerged through a mixture of events and U.S. government policy can’t be bemoaned; who wouldn’t take advantage if they were sat in the sweet spot (note: we are sceptics but not conspiracy theorists). But the size of the cash pile created by such favourable conditions (and the productivity of Goldmanites of course) and the fact that such a large proportion is headed straight towards the firm’s bonus pool does seem at the very least, a bit tactless.

Lloyd offered some contrition yesterday addressing one of those points, from Bloomberg:

“We participated in things that were clearly wrong and have reason to regret,” Blankfein, 55, said at a conference in New York hosted by the Directorship magazine. “We apologize.”

Wasn’t it Elton John that said “Sorry is the hardest word”.

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