Lloyd Blankfein, Goldman Sachs, Prop-Up Venezuela Nicolas Maduro’s Economy For Good Reasons

Lloyd Blankfein
Lloyd Blankfein

Recently, Lloyd Blankfein, the CEO of Goldman Sachs Investment Bankers, took up the task of leading his firm to help Venezuela’s economy by purchasing what’s reported to be $2.8 billion in bonds from Venezuela’s Petróleos de Venezuela, S.A., the state-run oil monopoly that is the government’s main source of revenue. Goldman Sachs purchased the bonds for 31 cents on the dollar, making the true purchase value 865 million on the 2014 bonds.

Blankfein’s move may seem like it’s harmless until you consider that Venezuela Nicolas Maduro’s is smack in the middle of a level of unrest not seen in decades. In a nutshell, a very weak economy has caused deeper class divide within the already bifurcated socioeconomic system. This has given rise to protests against Nicolas Maduro’s’s regime which have been violently rebuffed. Because of those actions, Maduro’s taken on the role of bad-guy. Some believe that weakening the already poor economy would stop the fighting. That is a foolish expectation.

Many studies, the most comprehensive by the Center For Applied Social Research At Leeds University in The UK, have found a direct connection between income inequality and crime. From that perspective, which the researchers report is robust around the World, Venezuela’s problems would seem to point to a need to keep the economy going, and not failing.

From that narrow but necessarily simple view (if only to avoid getting lost in the complex political details that form the internal fighting in that nation), Lloyd Blankfein made the right call. There’s no evidence to suggest that allowing Venezuela’s economy to tank would bring an end to violence and much data that supports the idea that doing so would cause more of it.

Stay tuned.

About the Author

Zennie Abraham
Zennie Abraham | Zennie Abraham or "Zennie62" is the founder of Zennie62Media which consists of zennie62blog.com and a multimedia blog news aggregator and video network, and 78-blog network, with social media and content development services and consulting. Zennie is a pioneer video blogger, YouTube Partner, social media practitioner, game developer, and pundit. Note: news aggregator content does not reflect the personal views of Mr. Abraham.

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Maria Ayerdi Kaplan