The White House hex on Goldman Sachs has clearly been lifted. Six weeks from now, former Goldman banker Stephen Bannon will be ensconced in the West Wing as chief advisor to incoming US president Donald Trump. Former Goldman partner Steven Mnuchin will be seeking Senate confirmation to run the Treasury Department. And Gary Cohn, currently Goldman’s president and chief operating officer, looks set to join the administration as an advisor to Trump and director of the National Economic Council.
What a difference eight years makes.
When Barack Obama was first elected president, Goldman Sachs had just become the third rail of US government-appointee politics. For candidates to high-profile posts, any association with one of the world’s most successful, most vampire squid-like investment banks would be viewed with suspicion. This was populism, 2008-style.
Of course, back then politicians had little to gain by being seen in the company of anyone on Wall Street. But “Government Sachs” stood out as an especially objectionable source of nominees for financial policy and regulation roles. After all, the electorate had watched one former-Goldman-chairman-turned-Treasury-secretary champion laws to deregulate America’s big banks. Then it watched another draft the bailout plan to rescue them.
After the markets came crashing down, the idea of a nominee with a Goldman past winning Senate approval for a role like Treasury secretary was a nonstarter. Tim Geithner, Obama’s first Treasury secretary, offered the president some cover in that regard. But even Geithner, an economist and civil servant who had never worked on Wall Street, found it difficult to escape accusations of being too cozy with Goldman.
By the time Geithner stepped down in 2013, public ire toward Wall Street had calmed enough for Obama to nominate Jack Lew, who had spent most of his career in government but took a detour to work for Citigroup. But had Obama tried to put forth a nominee with a Goldman pedigree, he no doubt would have been lambasted for it—from the left especially.
It’s not clear that voters on the right are any more forgiving of Goldman. But they’ve proven exceptionally forgiving of Trump, who has a King Midas-like gift for grabbing the third rails of American politics and turning them into political gold.