After falling out of favor in Washington, DC, in the nearly 10-year stretch following the bursting of the housing bubble, Goldman Sachs is poised for a remarkable comeback to the corridors of power.
After tapping former Goldman partner Steven Mnuchin to be his Treasury secretary, President-elect Donald Trump now has two former executives of the powerhouse bank head by Chief Executive Lloyd Blankfein in position to formulate the country’s fiscal policy.
Former Goldman Vice President Stephen Bannon was previously named Trump’s chief strategist.
Goldman’s move back to the center of the nation’s financial decision-making will be further cemented if, as expected, current Chief Operating Officer Gary Cohn is named Trump’s budget chief.
In addition, Anthony Scaramucci, one of Trump’s inner-circle transition advisers, cut his teeth at Goldman.
What makes the Goldman Sachs comeback even more startling is that just over three weeks ago, Wall Street’s smart money had Hillary Clinton winning — and Goldman spending at least another four years sidelined.
“This just would not have happened if Hillary was elected,” said one Goldman source, noting that she was criticized for making too much money from paid Goldman speeches.
“Given the campaign rhetoric, [Goldman’s return to power] is very ironic,” the source said.
During one Republican presidential primary debate, Trump attacked both rival Ted Cruz, whose wife was a Goldman managing director, and his future general election opponent, Clinton, as Goldman pawns.
A Goldman spokesman said the bank “has encouraged its employees to give back to the community while they are working here and after they leave. We are proud that many have gone on to serve their country.”
Lawyer Richard Farley, with Kramer Levin, the author of “Wall Street Wars: The Epic Battles With Washington that Created the Modern Financial System,” said presidents often turn to Wall Street execs for Treasury secretary because they are among the only ones who really understand the global economy.
“I think just understanding the plumbing of the financial system, given how complicated it is, makes it almost necessary to have someone who understands it.”
The choice of a Goldman alum for Treasury boss did not sit well with everyone.
“It’s a horrid appointment,” President Reagan’s former Office of Management and Budget Director David Stockman told The Post.
“We don’t need another plenipotentiary from Goldman Sachs and crony capitalist speculator who made billions off the backs of taxpayers,” he said.
While President Obama did not tap Goldman execs for the key positions, President George W. Bush named Goldman CEO Henry Paulson his Treasury secretary, and President Clinton named Goldman co-Chair Robert Rubin to the same post.