Skip to main content

Gary Cohn is giving Goldman Sachs everything it ever wanted from the Trump Administration

Gary Rivlin, Michael Hudson

Part 2 - GOLDMAN ALWAYS WINS

Goldman Sachs had been a favorite cudgel for candidate Trump — the symbol of a government that favors Wall Street over its citizenry. Trump proclaimed that Hillary Clinton was in the firm’s pockets, as was Ted Cruz. It was Goldman Sachs that Trump singled out when he railed against a system rigged in favor of the global elite — one that “robbed our working class, stripped our country of wealth, and put money into the pockets of a handful of large corporations and political entities.

Cohn, as president and chief operating officer of Goldman Sachs, had been at the heart of it all. Aggressive and relentless, a former aluminum siding salesman and commodities broker with a nose for making money, Cohn had turned Goldman’s sleepy home loan unit into what a Senate staffer called “one of the largest mortgage trading desks in the world.” There, he aggressively pushed his sales team to sell mortgage-backed securities to unaware investors even as he watched over “the big short,” Goldman’s decision to bet billions of dollars that the market would collapse.

Now Cohn would be coordinating economic policy for the populist president.

The conflicts between the two men were striking. Cohn ran a giant investment bank with offices in financial capitals around the globe, one deeply committed to a world with few economic borders. Trump’s nationalist campaign contradicted everything Goldman Sachs and its top executives represented on the global stage.

Trump raged against “offshoring” by American companies during the 2016 campaign. He even threatened “retribution,” - a 35 percent tariff on any goods imported into the United States by a company that had moved jobs overseas. But Cohn laid out Goldman’s very different view of offshoring at an investor conference in Naples, Florida, in November. There, Cohn explained unapologetically that Goldman had offshored its back-office staff, including payroll and IT, to Bangalore, India, now home to the firm’s largest office outside New York City: “We hire people there because they work for cents on the dollar versus what people work for in the United States.

Candidate Trump promised to create millions of new jobs, vowing to be “the greatest jobs president that God ever created.” Cohn, as Goldman Sachs’s president and COO, oversaw the firm’s mergers and acquisitions business that had, over the previous three years, led to the loss of at least 22,000 U.S. jobs, according to a study by two advocacy groups. Early in his candidacy, Trump described as “disgusting” Pfizer’s decision to buy a smaller Irish competitor in order to execute a “corporate inversion,” a maneuver in which a U.S. company moves its headquarters overseas to reduce its tax burden. The Pfizer deal ultimately fell through. But in 2016, in the heat of the campaign, Goldman advised on a megadeal that saw Johnson Controls, a Fortune 500 company based in Milwaukee, buy the Ireland-based Tyco International with the same goal. A few months later, with Goldman’s help, Johnson Controls had executed its inversion.

With Cohn’s appointment, Trump now had three Goldman Sachs alums in top positions inside his administration: Steve Bannon, who was a vice president at Goldman when he left the firm in 1990, as chief strategist, and Steve Mnuchin, who had spent 17 years at Goldman, as Treasury secretary. And there were more to come. A few weeks later, another Goldman partner, Dina Powell, joined the White House as a senior counselor for economic initiatives. Goldman was a longtime client of Jay Clayton, Trump’s choice to chair the Securities and Exchange Commission; Clayton had represented Goldman after the 2008 financial crisis, and his wife Gretchen worked there as a wealth management adviser. And there was the brief, colorful tenure of Anthony Scaramucci as White House communications director: Scaramucci had been a vice president at Goldman Sachs before leaving to co-found his own investment company.

Even before Scaramucci, Sen. Elizabeth Warren, D-Mass., had joked that enough Goldman alum were working for the Trump administration to open a branch office in the White House.

There was a devastating financial crisis just over eight years ago,” Warren said. “Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country’s economic policy to a senior Goldman executive turns my stomach.” Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six.

Earlier this summer, Trump boasted about his team of economic advisers at a rally in Cedar Rapids, Iowa. “This is the president of Goldman Sachs. Smart,” Trump said. “Having him represent us! He went from massive paydays to peanuts.

Trump waved off anyone who might question his decision to rely on the very people he had demonized. “Somebody said, ‘Why did you appoint a rich person to be in charge of the economy?’ … I said: ‘Because that’s the kind of thinking we want.’” He needed “great, brilliant business minds … so the world doesn’t take advantage of us.” How else could he get the job done? “I love all people, rich or poor, but in those particular positions, I just don’t want a poor person.

Does that make sense?” Trump asked. The crowd cheered.

Years of financial disclosure forms confirm that Cohn is indeed very rich. At the end of 2016, he owned some 900,000 shares of Goldman Sachs stock, a stake worth around $220 million on the day Trump announced his appointment. Plus, he’d sold a million more Goldman shares over the previous half-dozen years. In 2007 alone, the year of the big short, Goldman Sachs paid him nearly $73 million — more than the firm paid CEO Lloyd Blankfein. The disclosure forms Cohn filled out to join the administration indicate he owned assets valued at $252 million to $611 million. That may or may not include the $65 million parting gift Goldman’s board of directors gave him for “outstanding leadership” just days before Trump was sworn in.

Like anyone taking a top job in the Trump administration, Cohn was required to sign a pledge vowing not to participate for the next two years in any matter “that is directly and substantially related to my former employer or former clients, including regulations and contracts.” But presidents have sometimes issued waivers to these requirements, and it is unclear whether the Trump administration is making such waivers public.

Sens. Warren and Tammy Baldwin, a Democrat from Wisconsin, sent Cohn a letter a few days later. They brought up the $65 million bonus and asked him to publicly recuse himself from any issue that could have a direct or “significant indirect” impact on his old firm. Cohn never responded to the letter, and if he has ever received a waiver, it has not been made available to the public or the Office of Government Ethics.

Consistent with the Trump administration’s stringent ethics rules, Mr. Cohn will recuse himself from participating in any matter directly involving his former employer, Goldman Sachs,” White House spokesperson Natalie Strom said. “The White House will not comment further.

The White House declined requests to make Cohn available for an interview and declined to answer a detailed set of questions.

Cohn shared the podium with fellow Goldman alum Mnuchin (the two made partner there the same year) when the administration unveiled its new tax plan, one that, if the past is prelude, had the potential to save Goldman more than $1 billion a year in corporate taxes. The president had promised to “do a number” on financial reforms implemented after the 2008 subprime crisis, including one that threatened to cost Goldman several billion dollars a year in revenues. Under Cohn, the administration has introduced new rules easing initial public offerings — a Goldman Sachs specialty dating back to the start of the last century, when the firm handled the IPOs of Sears, Roebuck; F. W. Woolworth; and Studebaker. As Trump’s top economic policy adviser, Cohn can exert influence over regulatory agencies that have shaken billions in penalties and settlements out of Goldman Sachs in recent years. And his former colleagues inside Goldman’s Public Sector and Infrastructure group likely appreciate the Trump administration’s infrastructure plan, which is more or less exactly as Cohn first pitched it inside Trump Tower in November.

It’s hard to see how Gary Cohn recusing himself would solve a lot of these conflicts because nearly every major decision of his job would have a significant impact, likely billions of dollars, on Goldman Sachs and its executives,” said Tyler Gellasch, an attorney and former Senate staffer who helped draft Dodd-Frank, the landmark financial reform law passed in the wake of the financial meltdown. “Goldman touches nearly every aspect of the economy, from selling U.S. treasuries to helping companies go public, and the National Economic Council advises on all of that.

In the wake of last month’s white supremacist rally in Charlottesville, Virginia, Cohn confessed to the Financial Times that he has “come under enormous pressure both to resign and to remain.” But the man who the Washington Post has dubbed Trump’s “moderate voice” declared that neo-Nazis would not force “this Jew” to leave his job. “As a patriotic American, I am reluctant to leave my post as director of the National Economic Council,” Cohn told FT. “I feel a duty to fulfill my commitment to work on behalf of the American people.

Or at least a few of them. The Trump economic agenda, it turns out, is largely the Goldman agenda, one with the potential to deliver any number of gifts to the firm that made Cohn colossally rich. If Cohn stays, it will be to pursue an agenda of aggressive financial deregulation and massive corporate tax cuts — he seeks to slash rates by 57 percent — that would dramatically increase profits for large financial players like Goldman. It is an agenda as radical in its scope and impact as Bannon’s was.

Source, links:


[1] [3] [4] [5] [6]

Related:


Comments

Popular posts from this blog

WikiLeaks paper reveals US empire was becoming anxious about Venezuela adopting euro and directing exports to China

The WIKILEAKS Public Library of US Diplomacy (PlusD)holds the world's largest searchable collection of United States confidential, or formerly confidential, diplomatic communications. As of April 8, 2013 it holds 2 million records comprising approximately 1 billion words. The collection covers US involvements in, and diplomatic or intelligence reporting on, every country on earth. It is the single most significant body of geopolitical material ever published. The PlusD collection, built and curated by WikiLeaks, is updated from a variety of sources, including leaks, documents released under the Freedom of Information Act (FOIA) and documents released by the US State Department systematic declassification review.
globinfo freexchange
A cable from March, 2008 was highlighting US concerns about the fact that the Venezuelan state oil company, PDVSA, was about to adopt euro currency for some, or even all of its oil sales.
It appears that the cable source was the US embassy in Caracas and…

Russiagate collapse shows CIA black propaganda loops are obsolete and ineffective

globinfo freexchange
In his documentary The Power Of Nightmares, Adam Curtis presents the case of William Casey, head of the CIA under Reagan administration.
As has been described previously, to persuade the President, the neoconservatives set out to prove that the Soviet threat was far greater than anyone. They would demonstrate that the majority of terrorism and revolutionary movements around the world, were actually part of a secret network, coordinated by Moscow to take over the world.
The main proponent of this theory was a leading neoconservative who was the special adviser to the Secretary of State. His name was Michael Ledeen and he had been influenced by a best-selling book called "The Terror Network". It alleged that terrorism was not the fragmented phenomenon that it appeared to be. In reality, all terrorist groups, from the PLO to the Baader-Meinhof Group in Germany and the provisional IRA, all of them, were a part of coordinated strategy of terror run by the Soviet…

Arrest of Julian Assange: the last remaining leaf of the fascist neoliberal regime drops - we are now at war

globinfo freexchange
What other proof would you need to convince yourself that we already live under a global-scale fascist regime whose headquarters are located in the US evil empire?
This is a war against real journalism. It is a direct threat against all the independent media with real journalists who expose the war crimes of the empire and its allies. After this, expect an ongoing, brutal hunt against every real journalist who will attempt to report the truth, contrary the corporate PR parrots of the mainstream media - the golden operatives of the establishment, who faithfully stick to the script.
The utter joke of 'anti-establishment' Donald Trump collapsed from his first day in the US presidency, but now, its repulsive ugliness has been revealed gloriously. While Donnie was actually praising WikiLeaks before his election, he now said that "I know nothing about Wikileaks. It's not my thing".

"I know nothing about Wikileaks. It's not my thing" says …

A message for the worst liberal establishment ever: don't you dare harm Julian Assange

by system failure
The neoliberal clowns of the Western mainstream media increasingly shed crocodile tears about what they consider 'fake news' and the rise of the far right.
The hypocrisy and absurdity of the whole thing will make you laugh loud. Because these are the PR agents of the corporations behind the mainstream media who brought us Trump and the far right.
These are the cheerleaders of endless wars, and in fact, the only time they supported Trump was when he bombed Syria.
This is the ugly face of the establishment that pretends to be the gatekeeper of 'real news', while everyone else is 'fake news'. It doesn't matter if they work 24 hours a day to brainwash you with BS neoliberal and pro-war propaganda. You know, just to maintain this awful status in favor of their super-wealthy bosses.
It's not new. They did it for decades and it worked. People back then were like blind rats whose sole information was coming from the mainstream media. There were n…

The ruthless neo-colonialists of 21st century

by system failure
The start of current decade revealed the most ruthless face of a global neo-colonialism. From Syria and Libya to Europe and Latin America, the old colonial powers of the West tried to rebound against an oncoming rival bloc led by Russia and China, which starts to threaten their global domination.
Inside a multi-polar, complex terrain of geopolitical games, the big players start to abandon the old-fashioned, inefficient direct wars. They use today other, various methods like brutal proxy wars, economic wars, financial and constitutional coups, provocative operations, 'color revolutions', etc. In this highly complex and unstable situation, when even traditional allies turn against each other as the global balances change rapidly, the forces unleashed are absolutely destructive. Inevitably, the results are more than evident.
Proxy Wars - Syria/Libya
After the US invasion in Iraq, the gates of hell had opened in the Middle East. Obama continued the Bush legacy of US …

Bernie Sanders has just put the Wall Street/corporate lobbyists and their DNC proxies into panic mode - expect an all-out war

globinfo freexchange
Bernie Sanders campaign announced something extraordinary for the US political standards. It has raised $18.2 million from just under 900,000 individual donations since launching 41 days ago!
As commondreamsreported:
Bernie Sanders' presidential campaign announced Tuesday that it raised $18.2 million from just under 900,000 individual donations since launching 41 days ago.
Sanders' first quarter haul tops all other 2020 Democratic candidates who have reported their fundraising totals. Sen. Kamala Harris (D-Calif.) raised $12 million in the first quarter, and South Bend, Indiana, Mayor Pete Buttigieg raised $7 million.
Faiz Shakir, Sanders' campaign manager, said during a press call that 88 percent of the donations were $200 or less, and the average donation was $20.
The profession with the most donors to Sanders' campaign was teachers, according to Shakir.
In total, 525,000 individuals donated to Sanders' campaig…

Tulsi Gabbard bravely defends Julian Assange on a US deep state platform

Here is another proof that she, or Jill Stein, should be the next US president if we want to escape from the fascist neocon/neoliberal regime - sorry Bernie, but your silence is very disturbing
globinfo freexchange
Many progressives feel extremely disappointed for the fact that the only 2020 Democrat progressive candidate who clearly defended one of the few remaining real journalists against the neocon/neoliberal fascist regime, is Tulsi Gabbard.
We still hope that Bernie Sanders will eventually take a clear position in favor of Julian Assange.
Nevertheless, in dark times like the one we are experiencing, things become more clear. We can see who is the one that will defend bravely the interests of the people against the totalitarian complex of Wall Street, corporate cabal and US deep state.
Tulsi Gabbard, and of course Jill Stein, are the best options right now for the 2020 US presidency, if we really want to see a radical change for the benefit of the American people and the world.

Arres…

Juan Guaido confesses being behind the sabotage of Venezuela’s electric system

Translated from the Spanish by Global Research
A confession from [America’s] puppet pointing to evidence,” said journalist Gustavo Villapol Wednesday, noting that the deputy of the National Assembly in contempt Juan Guaidó confessed to be behind the attacks perpetrated against the National Electric Service (SEN) that have affected the Venezuelan people since last March 7.
The gentleman, Deputy Guaidó, has told the world that they are behind this devious and terrorist attack against the Electric System,” he said during an interview on the Punto de Encuentro program broadcast by Venezolana de Televisión.
[These are the quotations from Guaido’s statements at the National Assembly, video below 13′ 11″ – 14′ 09″, GR editor]
And I repeat, the cessation of darkness will definitely come with the cessation of usurpation,” culminates the self-proclaimed Juan Guaidó (VTV Fotogram)
There will be no solution to the electrical problem, there will be no water to the houses much less domestic gas”…

A second Brexit referendum will boost the extreme right and the fascists further

globinfo freexchange
Costas Lapavitsas spoke with Paul Jay of The Real News and explained why a second Brexit referendum will fuel the far right nightmare:
The working class people, the poor and others who voted for Brexit in 2016, take their vote very seriously. Another referendum - before the first one will have been implemented - will look, and it will be, a direct negation of democracy. It will be a direct subverting of democracy. They will have been told ‘your vote counts for nothing’.
In that context, the only political current that can benefit is the extreme right. And they're there. They're already active. They speak the language of the working people.
There are actually now out and out fascists who are organizing actively. They call for a defense of democracy. They call for a rejection of politicians and politics in the sense that these politicians and official politics, democratic politics, are maneuvers used by the rich, and they’ve got nothing to do with the poor, and…

The weaponising of antisemitism

The smears against Corbyn and the left are part of a concerted effort to undermine a potential left government and must be opposed
by Alex Snowdon
Part 1
There is currently another round of attacks on Jeremy Corbyn’s leadership of the Labour Party on the basis of alleged antisemitism - or failures to deal with it effectively. This is a long-running saga. The charges against the Labour leadership have become progressively harsher: we are now routinely being told that Labour is an ‘institutionally antisemitic’ party.
While there have indeed been instances of antisemitism from some Labour members, the evidence shows overwhelmingly that it is not a widespread problem in the party, it has increasingly been addressed in a serious way, and the notion that Corbyn personally is complicit is absurd.
In the US, meanwhile, there has been an outpouring of vitriol directed at Ilhan Omar, a newly-elected congress member, for critical comments of Israel that have been tendentiously spun as antisemitic. In…