President Trump was put into office riding a wave of anti-Establishment sentiment, with voters at the grassroots level seeing him as the candidate to overturn business as usual in Washington. As with any Administration, however, personnel is policy. While the Trump Administration has moved very slowly to fill positions, many of its senior policy positions have gone to alumni of Goldman Sachs, leading some to wonder whether President’s agenda will reflect the will of his voters or the wishes of Wall Street.
Three Top Goldman Sachs Alumni
A trio of Goldman alumni fill some of the most senior positions in the Trump Administration. Topping the list is, of course, Chief Strategist advisor Steve Bannon, the former head of Breitbart News. Bannon worked at Goldman Sachs during the 1980s before moving off into other ventures. While it is alleged that his views have become more anti-Establishment since that time, Bannon is a tough person to read.
Treasury Secretary Steven Mnuchin worked for Goldman for 17 years, eventually becoming the firm’s Chief Information Officer. He left the company in 2002 and founded a number of hedge funds. As Treasury Secretary, he has relied on Goldman Sachs officials such as former Deputy Treasury Secretary nominee Jim Donovan to help staff the Treasury Department
The Director of the National Economic Council is Gary Cohn, who up until January was the President of Goldman Sachs. Cohn was seen as the favorite to become the next CEO when Lloyd Blankfein retires. Cohn has also been tasked with finding a nominee to replace Janet Yellen as Chairman of the Federal Reserve’s Board of Governors, and rumor has it that he may very well choose himself.
Goldman Sachs Around the World
If Cohn ends up as the Fed Chairman, that would mean that three of the world’s largest central banks would be run by Goldman alumni. The Governor of the Bank of England is Canadian Mark Carney, who spent thirteen years at Goldman Sachs before joining the Canadian Department of Finance and working his way up to head the Bank of Canada and eventually the BOE.
The European Central Bank is headed by President Mario Draghi, who spent three years at Goldman Sachs as the vice chairman and managing director of Goldman Sachs International before being appointed to head the Bank of Italy.
Goldman Sachs Within the Federal Reserve System
Four of the eleven currently filled positions of President at the regional Federal Reserve Banks are filled by those with Goldman Sachs connections. The most important of those is William Dudley, President of the New York Fed, who has a permanent seat on the Federal Open Market Committee, the committee that sets United States monetary policy. Dudley spent 21 years at Goldman, including 10 years as its chief economist.
Robert Kaplan, President of the Dallas Fed, spent 23 years at Goldman before being appointed to the Dallas Fed in 2015. He worked his way up to vice chairman at Goldman before leaving in 2006 to join Harvard Business School. After his departure, he remained a senior director of Goldman.
Philadelphia Fed President Patrick Harker, also appointed in 2015, had previously been the President of the University of Delaware and the Dean of the Wharton School at the University of Pennsylvania. He also served as a member of the Board of Managers of the Goldman Sachs Hedge Fund Partners Registered Fund LLC and as a Trustee of the Goldman Sachs Trust and the Goldman Sachs Variable Insurance Trust.
Minneapolis Fed President Neel Kashkari, who took office in 2016, was famous for overseeing the US Treasury’s bank bailout program in 2008. He arrived at Treasury from Goldman Sachs, having followed former Goldman CEO Hank Paulson to Treasury.
There are more government officials with Goldman connections, but these are just the most visible. Having such a large number of Goldman-connected individuals in senior policy-making positions leads justifiably to questions about the policies they pursue.
Will those in the executive branch carry out President Trump’s agenda or will they try to influence him to engage in policies that will benefit Goldman? Will the Goldman-connected Fed officials give Goldman a pass that they wouldn’t give to other banks? Particularly given the revolving door that has existed for decades between Washington and Wall Street, the odds of any of these officials ending up in positions where they can benefit from the decisions they make in government service are very high.