One of the rallying cries for the successful underdog presidential campaign of Donald J. Trump was that voters needed to “Drain the Swamp” of Washington, D.C.
Unfortunately, it seems a few crocodiles have still crept into the incoming Trump administration.
Despite consistently campaigning against Wall St largess, Trump has approved a number of people to serve in the executive branch who have ties to the megabank Goldman Sachs.
For years, long before he ran for president, Trump was critical of various aspects of finance and banking. This campaign season, he emphatically remarked that hedge fund managers are “getting away with murder” because they don’t pay their fair share of taxes, and are just “paper-pushers.”
Trump said that “hedge funds guy didn’t build this country,” and characterized high finance as “guys that shift paper around and they get lucky.
“They make a fortune. They pay no tax. It’s ridiculous, okay?” the president-elect inveighed back in August, not long after he announced his candidacy.
Government Sachs Returns
One of the key criticisms of the U.S. Treasury Department during the Bush and Obama years was the intimate connection between the department and Wall St. Voices on both the left and right were critical of the executive branch getting too cozy with financial firms.
There used to be a running joke about “Government Sachs” controlling the Treasury Department (and in Washington in general) during the previous two presidential administrations.
Nonetheless, there are now many actors with close ties to banking in general, and Goldman Sachs in particular, who are once again close to the levers of power. So far, the Trump administration includes at least three former Goldman Sachs employees: transition team adviser Anthony Scaramucci; top White House adviser Steven Bannon, the former head of conservative news site Breitbart; and Treasury Secretary Steve Mnuchin, who spent 17 years at Goldman Sachs.
In addition, Trump met with Goldman Sachs president Gary Cohn on Tuesday. Cohn is being considered for a position in the Office of Management and Budget.
As the president’s top economic adviser, incoming Treasury Secretary Mnuchin has emphasized tax reform and cutting the corporate tax rate.
Already, it’s clear that Wall St insiders are gaining a foothold in the White House already. Will there be a backlash, either from the political opposition (Senators Bernie Sanders and Elizabeth Warren) or from Trump’s anti-establishment supporters?
Goldman Sachs: Yuge Benefit
Despite his populist rhetoric, Trump is seen as pro-growth on economic policy. The stock markets have rallied while bets against the U.S. economy have waned. Now, a number of financial analysts—many of whom warned about the negative impact of a Trump presidency before the election—are issuing optimistic market forecasts. Goldman Sachs, of course, is among those who believe Trump will be a boon for equity markets. Goldman predicts that Trump’s policies (from tax reform to deregulation to infrastructure spending) will benefit most sectors of the S&P 500.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.