April 28, 2010 — -- Goldman Sachs chief executive Lloyd Blankfein said the firm is the target of "disproportionate treatment," but Sen. Carl Levin, D-Mich., argued on "Good Morning America" today that the company's method for making money after the 2007 mortgage crisis was unfair and cost taxpayers billions of dollars.
"Yes, we do" bear responsibility for the financial meltdown, Blankfein told ABC News. "It embarrasses me to say it. But of course we do. The financial system failed and Goldman Sachs is a very influential member of the financial system. We have our share of the burden of that."
But the embattled chief executive said that while he understands Americans' anger, Goldman employees are also taxpayers and that the company has been singled out for being profitable.
"I understand that reaction," Blankfein said Tuesday of the hostility directed at the financial giant for profiting from the financial meltdown. "But I tell you, we are all citizens and family people and taxpayers and members of our community."
"I think it is not an issue of fair," Blankfein added. "Because if you bear a burden, it is no relief for you to say, other people had -- should have that burden also. ... At the same time I think that we're getting some disproportionate treatment because we surely are not the only financial firm. ... So I can wish that the focus weren't so disproportionately on us. But I'm not making any claims of unfairness."
Levin, who chairs the subcommittee that heard from Goldman executives Tuesday, told "GMA's" George Stephanopoulos that the real problem was not that the investment giant was profitable, it was that it made a lot of money "unfairly" and "at the expense of the taxpayers."
The Securities and Exchange Commission brought fraud charges against Goldman this month and claimed that the company bet against its own clients and helped create the housing bubble that preceded the worst financial crisis since the Great Depression of the 1930s.
"They sold these financial instruments that they had designed and put into them a lot of bad mortgages they described in pretty colorful ways," Levin said. "Then they go out and bet against those same financial instruments that they're pedaling to people."
Levin said Goldman should have disclosed to its clients that the securities it was selling them were unsound investments and the company itself was betting against them.
"They have a right to make money, but they can't make it any way they want," Levin said on "GMA."
Blankfein said he will not resign despite some calls for him to step down and that Congress should step up action on financial overhaul regulation.
"I think they know enough" about financial markets to regular Wall Street, Blankfein said. "I think Washington has a responsibility to respond to the events of the last several years by enacting some kind of financial reform."
Democrats have introduced financial overhaul legislation in Congress -- one that Blankfein said Tuesday he generally supports -- but it has been bogged down in procedural motions and opposed by some Republicans.
Levin today said he would put an end to the "bad practices" by mortgage firms, where the amount of money people made was falsified on a mortgage application and the banks were aware of it.
Levin argued that banks backed by the Federal Deposit Insurance Corp.should not be engaged in risky trading.
"No risky trading if you're going to go to the federal reserve and have access to federal funds or if there's going to be a federal guarantee, one or the other," he said.