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In yesterday’s news, Goldman Sachs announced second quarter results that were much better than had been anticipated. Quarterly earnings surged 33%, and in the process Goldman, Wall Street’s darling investment bank for over a decade now, didn’t just beat expectations, they obliterated them.  So is this good, or bad?

I suppose the answer to that question lies in which side of the fence you are on.  If you are a free market capitalist, Republican, or happen to have owned stock in Goldman, then you are probably pretty happy with the news.  If you are sick of Wall Street, a left-leaning Democrat, anti-bailout, or a socialist you probably hated hearing this news. After all, why should we be happy that Wall Street is rebounding so well less than a year after the Federal Government spent billions bailing them out?  Remember, Goldman Sachs was among the investment banks to receive funds, both directly, and indirectly when AIG, who insured their credit default swaps, was bailed out.  Goldman had come under fire for its government connections and fat-cat profits, seemingly sailing through a deep recession shortly after accepting $10 billion of taxpayer bailout money and benefiting from a host of other government programs. But what about the little guy!  What about the guy who lost his job because the economy tanked and got laid off as a result?

The problem is, the little guy is ALSO the big guy in this predicament.  How so?  Well, our collective “little guy” tax dollars were used to bailout companies like Goldman.  Since the government (little guys’ money) has a stake in some of these mammoth companies, they want them to succeed.  Remember, the whole logic behind bailing these companies out was that they were either too big to fail, or too vital to the economy to let them fall by the wayside.  It is in the government’s interest to have companies like Goldman succeed if for no other reason than to make sure they get their investment back. Getting their investment back trims our deficit, decreases the need for ballooning tax hikes, and hopefully helps the economy recover a little bit quicker, which will be good for everybody.

Essentially, its a moral problem. Can we reconcile our hatred of those we’ve blamed for the credit crisis if they make good, do well, and help turn it around? Maybe when my stock portfolio gains the 35% of value its lost over the last 18 months, I’ll make peace with Goldman and their ilk. In the mean time, I still reserve the right to be pissed at the fact that Lloyd Blankfein and his buddies have set aside $6.65 billion dollars in salaries, bonuses, and benefits for the quarter.

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