Lloyd Blankfein fears Elizabeth Warren wants 'cataclysmic change' for US economy

New York(CNN Business) Lloyd Blankfein is worried that Elizabeth Warren could bring about a radical shift to America's economy.

The former Goldman Sachs (GS) CEO told CNN's Poppy Harlow in an exclusive interview on Thursday that Warren "probably thinks more of cataclysmic change to the economic system as opposed to tinkering."

That's riskier, Blankfein said, because America's economic system is the "envy of the world."

Warren has called for a breaking up Facebook (FB), instituting a wealth tax on the richest Americans and banning fracking.

Blankfein, speaking at the CITIZEN by CNN conference in New York City, also pushed back against the recent argument by Salesforce (CRM) CEO Marc Benioff that capitalism as we know it is over.

"Capitalism is not dead," said Blankfein, who stepped down as Goldman Sachs' CEO last fall. But he acknowledged that the system "has to adapt," with an aim of making it fairer and preventing monopolies.

Paying more in taxes

Blankfein said that some of Bernie Sanders' ideas are good ones and he is open to the idea of wealth "redistribution" by changing the nation's tax structure.

"We have to listen to what people are saying and respond to it," he said. "You know, you're not guaranteed stability in the world. Look at what's going on in Hong Kong."

For instance, Blankfein thinks the rich could pay more in taxes.

"I'd like to pay no taxes, but I'd like to live in a civilized world where people aren't coming with torches and rakes trying to, you know, kill each other," said Blankfein. "I sure as heck would be willing to pay more tax if it could buy a happier and less polarized society."

Both Warren and Sanders have endorsed a tax on wealth. Warren has called for taxing fortunes of more than $50 million at 2% each year and wealth of more than $1 billion at 3%.

Blankfein said it's "hard to imagine" a wealth tax because it would be incredibly complicated to calculate. He noted that wealth taxes can take many years to sort out.

Even though Blankfein is a registered Democrat who supported Hillary Clinton in the 2016 election, his career on Wall Street has made him unpopular with the liberal wing of the party. In July, Sanders put Blankfein on his list of "anti-endorsements."

Blankfein said that he's still a Democrat -- "they haven't kicked me out yet" -- but declined to name a 2020 candidate that he'd endorse.

"If I really wanted to hurt a Democratic candidate, I would give my full endorsement," he joked.

Tariffs are hurting. But are they necessary?

Blankfein also weighed in on the US-China trade war.

Although White House trade adviser Peter Navarro has downplayed the economic pain of the trade war, Blankfein conceded it's real.

"Of course, tariffs are hurting us," Blankfein said.

However, he suggested that the tariffs could be an effective tool for the United States to convince China to play fair on trade. He compared the tariffs to union workers who decide to go on strike.

"Is the union being hurt by striking General Motors? Of course, it is," Blankfein said. "But they're relying on the fact that maybe GM is being hurt more. How else do you get your adversary to the bargaining table?"

The trade war has exacerbated the global economic slowdown and increased the risk of a recession in the United States.

But Blankfein doesn't sound overly concerned that the economic expansion, already the longest in American history, will come to a sudden end.

Although he joked that he "wrote the book on paranoia," he suggested the economy may keep humming along -- unless some sort of a shock emerges.

Not all shocks are bad, Blankfein said, noting that a positive shock, such as a resolution to the trade war, is possible.

"The base case is that the economy is motoring along fairly well, but nothing lasts forever," he said.