Goldman's Gambit

Goldman Sachs CEO Lloyd Blankfein seemingly took the high road by calling for a ban on multi-year contracts in the investment banking industry.

Instead, his suggestion, while appealing to the critics of Wall Street compensation, also helps Goldman.

Because Goldman is one of the most successful Wall Street firms, for other firms to recruit away its employees, they often need to offer multi-year contracts. So if such contracts were banned, it would help Goldman retain its employees and hurt its competitors.

In the part capitalist, part socialist economy we have, using the government to help one's competitive position has sadly become a common occurrence in business. That's one reason why business leaders shouldn't be seen as advocates of a capitalist system, since they will often embrace government interference with the market to advance their goals.