The Economist, after an interview with Goldman Sachs chief executive Lloyd Blankfein, describes the bank's claim that it would have survived without government intervention as "implausible." To "calm the public mood," the magazine recommends that the bank make a big charitable contribution, "in the billions of dollars." What the Economist doesn't say is that for American C corporations, charitable contributions in most cases are tax deductible up to 10% of net income. So some of the money that Goldman would give to charity would have otherwise gone to the American government, i.e., the taxpayers who bailed the firm out to begin with. The rest would have gone to the firm's shareholders. Goldman may justify the charitable contribution to shareholders as, essentially, a marketing expense needed to keep the firm's public image positive enough to enable it to advocate for favorable public policies and to allow it to attract and retain capable employees and, therefore, to earn more money for shareholders over the long haul. The flaw with that argument, though, is that a big charitable gift from Goldman winds up reinforcing the idea that giving money away to non-profits is somehow more socially valuable than lending it to entrepreneurs or returning it to shareholders as dividends that the shareholders can then decide to save, spend, or give away on their own as individuals. It's a view that finds Goldman's main activity -- making money -- not valuable in its own right, but tolerable only because the money can then be given away. The case Goldman Sachs really may be better off making is a different one: that the work it does -- efficiently allocating capital, providing liquidity and capital and advice for entrepreneurs trying to grow their businesses, providing returns for shareholders and challenging, lucrative jobs for employees -- is valuable in its own right. If the company spent billions of dollars educating the public on that principle, the benefit to the company long-term might be better than the burst of good feeling that might accompany a charitable contribution, no matter how worthy the cause. Somehow I bet the charitable contribution that the Economist has in mind for Goldman isn't to, say, the Foundation for Economic Education or the Mises Institute.