Friday, January 13, 2017

Goldman Sachs, With Long History of Public Service, Makes Return to Washington in Trump Administration

This is pretty fascinating.

At NYT, "Goldman Sachs Completes Return From Wilderness to the White House":

“Government Sachs” is back.

After eight years in the political wilderness, its name synonymous with the supposedly undue and self-serving influence in Washington that brought us the financial crisis and the Wall Street bailout, Goldman Sachs is again making its presence felt. In the Trump administration, to an unprecedented degree, economic policy making is largely being handed over to people with Goldman ties.

The Goldman alumni include Steven T. Mnuchin, the nominee for Treasury secretary; Gary D. Cohn, tapped as director of the National Economic Council and White House adviser on economic policy; and Stephen K. Bannon, who was named chief White House strategist. Jay Clayton, named to head the Securities and Exchange Commission, is a Wall Street lawyer who has represented Goldman.

This week President-elect Donald J. Trump hired Dina H. Powell, a Goldman partner who heads impact investing, as a White House adviser. Anthony Scaramucci, a Goldman alumnus (whom I spotlighted last week), is on the Trump transition committee and is expected to be named to a White House position as well.

And this after Mr. Trump campaigned against Wall Street, excoriated Senator Ted Cruz for his ties to Goldman, and castigated Hillary Clinton for giving paid speeches to big banks, Goldman among them.

The Goldman influx has so far drawn little criticism, perhaps because worries about what once would have been deemed undue influence now mix with relief that there is some adult supervision in the executive branch.

On balance, “it’s a plus,” Michael R. Bloomberg, the former New York City mayor who built his fortune on Wall Street, told me this week. “Whatever you may think of them individually, you can’t get to be a Goldman partner and survive if you’re stupid, lazy or unprofessional.” (Mr. Bloomberg is co-chairman of Goldman’s “10,000 Small Businesses” initiative, which provides support to fledgling entrepreneurs.)

Whatever bricks Mr. Trump threw at Wall Street during the campaign, investors have cheered his victory, driving the stock market to new highs. And Goldman has been a particular beneficiary, with its shares gaining 35 percent since Election Day — the top-performing stock in the Dow Jones industrial average in that time.

Mr. Trump, a spokeswoman of his told me, sees no contradiction here. There’s a difference between individuals who happen to have worked at Goldman Sachs, at some point in their careers, and Goldman Sachs itself. “He’s said from the beginning that he’ll hire the very best people for the job regardless of where they worked before, which is what he’s done throughout his career,” said the spokeswoman, Hope Hicks.

While the firm’s influence in a Trump administration may reach a new apex, Goldman alumni have long been fixtures in both Republican and Democratic administrations. The Goldman legend Sidney J. Weinberg headed Franklin D. Roosevelt’s influential Business Advisory and Planning Council.

Recent Treasury secretaries with Goldman roots include Robert E. Rubin, a former co-chairman, under Bill Clinton; and Henry M. Paulson Jr., a former chairman and chief executive, under George W. Bush.

Even in the Obama administration, where a Goldman pedigree was something akin to a scarlet letter, Gary Gensler was credited with reviving a moribund Commodity Futures Trading Commission and might have been Treasury secretary had Mrs. Clinton won in November.

Which raises the question: Why would such a disproportionate number of the “best people,” in Mr. Trump’s view, come from just one bank? After all, Goldman is hardly the only large bank, and it is also far from the biggest. It employs roughly 33,000 people; JPMorgan Chase’s work force is many times as large.

Many point to a unique Goldman culture that has long encouraged public service and philanthropy as integral to its business model.

Goldman “does seem to produce people who are very smart and have valuable experience,” Mr. Bloomberg said. “And they have a culture and a long tradition of leaving the firm for public service. The firm pushes them to do that.”