The Financial Times reports some good news, headlined: “Trump reverses stance by turning to Goldman alumni for key roles” and “President-elect’s change of heart over Wall St bank veterans is a political gamble.“
The crux of the story is that “since winning the presidential election, Mr Trump has turned to Goldman veteran after Goldman veteran. Stephen Bannon, appointed head of strategy, was a former M&A banker at the Wall Street bank; Steven Mnuchin, Mr Trump’s pick for Treasury secretary, had 17 years in various roles. Gary Cohn, Goldman’s president and chief operating officer, could complete a hat-trick of appointments if he caps a 25-year career at the bank with a move into government. Mr Cohn had a lengthy meeting with Mr Trump on Tuesday afternoon.” Some have said, of course, that this is quite the reverse of “draining the swamp,” as President elect Trump promised to do, but, in my opinion, it is, simply, facing reality: before he can make changes Mr Trump needs to stabilize his fiscal situation and Goldman Sachs‘ people have a long, enviable and generally good record as sound, honest fiscal managers.
The FT says that “Analysts note that Mr Mnuchin is by no means assured of becoming the 77th Treasury secretary. Isaac Boltansky at Compass Point in Washington said the confirmation hearings would be “bumpy,” given his Goldman ties and involvement in the crisis-era purchase of IndyMac, the fourth largest bank failure in the history of the US … [and] … They also note that the president-elect is taking a gamble with such an obvious reversal of his earlier stance. During the campaign, Mr Trump made much of the highly paid speeches Mrs Clinton gave to Goldman and other Wall Street banks. He also accused his rival for the Republican nomination, Ted Cruz, of being “controlled” by Goldman.” I suspect most of the “bumps” in the confirmation ride will be from opposition senators but, I also suspect that Mr. Mnuchin will be confirmed and will join a long, long list of Goldman Sachs people who have advised both Democratic and Republican administrations. That President elect Trump is turning to an established, trusted source and that the Goldman Sachs people are answering the call is good news, in my opinion.
This is good news for Canada, people like Stephen Bannon, Mr Trump’s head of strategy, Steven Mnuchin, Mr Trump’s pick for Treasury secretary, and Gary Cohn, are level headed trade oriented pragmatists who will provide some much needed balance to Mr Trump’s own populist, isolationist, protectionist instincts.