Introduction
Since President Trump was inaugurated into office, his appointments have received scrutiny from both the public and Congress. His rhetoric prior to his presidency was to "drain the swamp," yet he has filled a number of important cabinet positions with previous ex-Wall Street senior management, notably Steve Mnuchin in the seat of Secretary of Treasury, to very pro-business ex-CEOs, particularly Rex Tillerson (NYSE: XOM) in the position of Secretary of State. Yet, if the historical evidence is examined, President Trump is not unique to appointing ex-Wall Street alumni or ex-CEOs to the presidential cabinet.
Past ex-Goldman Sachs Government Officials
The Great Recession of 2008 is still etched into the memories of most consumers. The blame for the recession heavily targeted big banks as the cause of most people's financial woes. In relation to the anti-Wall Street environment, there have been numerous protests surrounding the decisions President Trump made around his cabinet choices, especially with Steve Mnuchin and Gary Cohn, recently appointed into powerful economic positions. However, Mnuchin and Cohn's appointments should not be surprise, given the track record of ex-Goldman Sachs (NYSE: GS-PC) bankers holding prestigious positions in a presidential circle. The Guardian shares that during the Great Recession, the Secretary of Treasury was Henry Paulson, the ex-CEO of Goldman Sachs. Even before Paulson, during the Clinton administration, Robert Rubin, another ex-CEO of Goldman Sachs was appointed as the 70th Secretary of Treasury, and he was in the position long enough to repeal the Glass-Steagall Act. Given this track record, it is important to ask: why has there been an incredible number of ex-Goldman Sachs government officials in federal positions?
Revolving Door of ex-Goldman Sachs Government Officials
The narrative that "people who work in business should be the ones running economic matters for the government" is a powerful rhetoric that Wall Street firms and other businesses alike have been using since Alexander Hamilton. The Center for Responsive Politics recently published a piece that highlighted the latest ex-Goldman Sachs nominations, namely James Donovan to deputy Treasury Secretary. According to Paul S. Ryan, the VP of Policy and Litigation at Common Cause points out, "This is a complete, classic back-scratching deal, where Goldman Sachs executives help finance presidential and other campaigns, and are then rewarded with government jobs." The statement made by Ryan is not a new phenomena to the political arena. Wall Street has always had political ties with Washington and this relationship is an ethics issue. Government Sachs is a very clear example of this moral dilemma.
For list of important Goldman Sachs politicians/involvement in the United States government, click here.