“You don’t know the way the world’s going to evolve. And you don’t know the way you’re going to evolve.” — Lloyd Blankfein
Lloyd Blankfein grew up in public housing in East New York. He rode the bus to school, got held up at knifepoint, and skipped a grade. He showed up at Harvard at age 16, and at one point he had only eleven dollars to his name. He went on to run Goldman Sachs from 2006 to 2018, through the worst financial crisis since the Depression, and he has written a refreshingly honest memoir, Streetwise: Getting to and Through Goldman Sachs.
I asked Lloyd whether he would have taken a Thiel Fellowship to drop out of Harvard, but he thinks the worst move an ambitious 20-year-old can make is to skip college to chase money and fame. Life is long, and you only get one chance to develop your identity, your skills, and your outlook on the world.
We also talked about how he cooperated with fellow bank CEOs and with the federal government to find a way out of the 2008 financial crisis. He thinks that cooperation would be difficult today, because banking reforms and other developments have spread capital and risk more evenly throughout the financial system, including outside the reach of regulators. I asked whether more diversification is good, but Lloyd thinks there is a “Law of Conservation of Risk” in the system. Spreading it around more doesn’t make it go away. It might make the small crises more manageable (for example, the failure of Silicon Valley Bank in 2023). But in a large systemic crisis, the coordination that happened in 2008 will be nearly impossible, so he plans to “get out of town before the big one.”
Lloyd has given a lot to Harvard and has been a long-time supporter of financial aid at the College. He loves the place, but he’s not always sure it loves him back. He thinks Harvard punches below its weight in making its case to the country, that it woke up late to the fact that the public is an important constituency, and that it could stand to let a little outside air in.
We start in East New York and follow him to Harvard, to the financial-aid office that handed him a $500 check with no questions asked, to a quiet law firm with a 4:00 p.m. tea cart, and onto a trading floor where a man kept calling him “college boy.” Then the crisis: how Goldman’s habit of facing reality every day let it see the mortgage problem coming, the giant vampire squid, the hearings, and why he hopes to get out of town before the big one. We end on how important Harvard is to American society, and what it owes the country. I think you’re going to enjoy this one.
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Chapters
[0:00:00] Cold open “Harvard is the Goldman Sachs of educational institutions.”
[0:00:20] Introduction A kid from East New York, eleven dollars, and the most honest memoir David has read.
[0:01:15] Writing it straight Why Streetwise narrates instead of interprets, and “as between their very high view of me and my own, I’m right, because I’ve been with myself longer.”
[0:03:55] The desire to escape, and the dock Wanting out of the neighborhood, visiting Harvard with his sister Jackie, and the melancholy on the ride home.
[0:06:10] Humor as risk management The class clown, perspective as its own kind of risk management, and self-deprecation to take the edge off.
[0:09:30] Harvard at sixteen Skipping a grade out of a failing Brooklyn high school, and why a year more maturity would have helped.
[0:11:45] The first time he wasn’t counting Public housing, the broken glasses that were a big deal, and crew walk-ons ripping towels into headbands.
[0:14:10] Eleven dollars and a $500 check The financial-aid officer who asked “what do you need?”, handed him a check on the spot, and taught him more than the money did.
[0:15:45] Room on the balance sheet Why he gives to a wealthy university while people go hungry, and the case for institutions that don’t run on the tightest cost control.
[0:17:25] The Thiel fellowship test Whether a young Lloyd would have dropped out for $100,000, and why he calls a purely commercial education “subversive.”
[0:20:05] Butter-churning boot camps Read history if you want to be a physicist, why software engineering “doesn’t look so good,” and the two things you can’t predict.
[0:21:20] “I never had to source my motivation” How much he’d give up to hand his teenage self cash (nothing), the advantages hidden inside the burdens, and why life was simpler when he had no choice.
[0:23:15] Why he left the law The 4:00 tea cart, colleagues who couldn’t wait for the advance sheets, and looking down the road at a future he didn’t want.
[0:26:45] “College boy” Rejected everywhere, including Goldman, writing down the words on the elevator panel, and the J. Aron trading floor that finally suited him.
[0:30:10] What it means to be a partner Owners, not renters, a flatter firm, and legitimacy that rests on the consent of your co-owners.
[0:32:40] Worth manipulating A junior brush with the fraudster Robert Maxwell, the guilt that outran the facts, and an early wariness of the favor bank.
[0:36:55] “Improve its performance” The division nobody wanted to fix, why traders make money only when you tell them they have to, and David getting his verb corrected.
[0:41:35] The call on Memorial Day weekend The boss who never phoned on weekends, “whose transition are we talking about?”, and fifteen minutes of handover before the job was his.
[0:46:05] “Get up there with those guys” CEO designate on the Great Wall, and the kick from Ruth Simmons that turned him into a statesman.
[0:49:15] Mark-to-market The adversarial culture that forced Goldman to price its positions to reality every day, and why that discipline, not a premonition, got it out of mortgages early.
[0:53:55] Frenemies in the room How the Fed could put a dozen banks that held most of the risk around one table, and why that table would have to be Yankee Stadium today.
[0:56:40] The law of conservation of risk Why spreading risk makes the twenty-year storm safer and the eighty-year storm worse, and the instinct to get out of town before the big one.
[0:58:45] “You’re just money” Why Warren Buffett’s capital was worth more than a cheaper offer, the validator effect, and the gift of the great reductionist.
[1:01:25] The vampire squid Going from “how did you do it?” to “how did you do it?”, whether Rolling Stone hurt his feelings, and why not losing money made Goldman the target.
[1:04:10] Settling with the regulator Why you settle even when you think you were right, how you negotiate with someone who controls the oxygen, and the Abacus mortgage deal behind Goldman’s record $550 million SEC settlement.
[1:06:10] The daily voicemail Leading by voice through the worst days, “secure your mask before assisting others,” and getting the firm off CNBC and back to work.
[1:09:55] “What are you afraid of, Lloyd?” A resting state of anxiety, why a crisis slows down for him, and keeping your receipts because people remember how you behaved.
[1:12:55] Harvard’s reputational crisis What a bank’s PR disaster can teach a university, and why challengers always go after the best reputation in town.
[1:15:05] Who owns Harvard? Students for four years, faculty for twenty-five, alumni for sixty, and the constituency the university noticed too late: the public.
[1:16:55] An American institution Why Harvard tells its own story badly, the patriotic history it underplays, and the difference between a global university and an American one that admits the world.
[1:19:55] “I love the place. I don’t know if it reciprocates.” Being a donor whose notes go in and vanish, and why it’s easy to have opinions when you think no one is listening.
[1:21:55] Is Harvard a force for good? “Of course it is,” what he would correct, and why he thinks the pressure on Harvard forced a needed course correction.
Guest bio
Lloyd Blankfein is the Senior Chairman of Goldman Sachs, where he was Chairman and CEO from 2006 to 2018, leading the firm through the 2008 financial crisis. He grew up in public housing in the East New York section of Brooklyn, the son of a postal clerk, and entered Harvard at sixteen. He graduated from Harvard College in 1975 and Harvard Law School in 1978, practiced tax law for four and a half years at Donovan Leisure, and in 1982 joined the commodities trading firm J. Aron & Company, which Goldman Sachs had acquired the year before. He became a partner in 1988, ran the firm’s fixed income, currency, and commodities businesses, and became president and chief operating officer before succeeding Hank Paulson as CEO. His memoir, Streetwise: Getting to and Through Goldman Sachs, was published by Penguin Press in 2026. He lives in New York.
Mentioned in this episode
Books
Streetwise: Getting to and Through Goldman Sachs by Lloyd Blankfein
The Bonfire of the Vanities by Tom Wolfe, the source of “the favor bank”
People
Hank Paulson, Blankfein’s predecessor as Goldman CEO and later U.S. Treasury Secretary
Warren Buffett, whose Berkshire Hathaway invested in Goldman during the crisis
Sidney Weinberg, the Goldman senior partner Buffett was brought to meet as a boy in 1939
Robert Maxwell, British media magnate later exposed for looting his companies’ pension funds
Ruth Simmons, then president of Brown University and a Goldman board member
Peter Thiel, founder of the Thiel Fellowship
Barack Obama, then a first-term senator, who spoke to Goldman’s partners
George W. Bush, the president who appointed Paulson to Treasury
Also referenced: Nicolaus Copernicus, on intuition and its limits
Organizations and institutions
J. Aron & Company (covered on the Goldman history page above)
Donovan Leisure, his law firm
Harvard College and Harvard Law School
The Federal Reserve Bank of New York
The Securities and Exchange Commission
Ideas and concepts
Need-based financial aid at Harvard
The “favor bank,” Tom Wolfe’s phrase from The Bonfire of the Vanities
The “law of conservation of risk,” Blankfein’s own coinage in this conversation
TARP and the bank rescues of 2008
The rise and risks of private credit, the IMF’s 2024 analysis of risk migrating from regulated banks into private credit and private equity
Further reading and listening
“The Great American Bubble Machine,” Matt Taibbi’s Rolling Stone article that called Goldman a vampire squid (2009)
The SEC’s announcement of Goldman’s $550 million settlement over the Abacus mortgage product (2010)
Streetwise by Lloyd Blankfein
Credits
Host: David Deming, Danoff Dean of Harvard College
Executive Producer: Denise Koller Consulting Producers: Tim Smith and Jonathan Palumbo Produced by: Cabin 3 Media — Katie Toulmin, Producer; Justin Callahan, Director of Photography / Editor
Special thanks to Debbie Press and the Harvard Club of New York City.
