After eight years as the face of Wall Street greed and the target of public scorn, the bankers at Goldman Sachs can be cheerful again. Not only has Trump’s election stoked hopes for looser regulatory policies that will make it easier for banks to take bigger risks and book fatter profits, but Goldman also appears to have regained its place at the nexus between Wall Street and Washington. After being largely cut out of the federal government during the Obama years, with few of its alums tapped for big jobs, Goldman is starting to live up to its former nickname, Government Sachs. If confirmed, Mnuchin will be the third former Goldman partner to lead the Department of the Treasury in the past 25 years, joining Robert Rubin and Hank Paulson.
“They outlasted the criticism,” says Charles Geisst, a Wall Street historian and author of books about the industry. Mark Williams, a lecturer at Boston University and the author of a book about Lehman Brothers’ collapse, puts it more bluntly: “Although politicians love to publicly decry Goldman Sachs, in times of need they run to the firm for capital-markets expertise and to fill key cabinet seats.” Trump is no exception. Despite painting Goldman as a symbol of a corrupt system during the campaign, he is leaning heavily on the firm’s people.
Goldman’s Chief Executive Officer Lloyd Blankfein didn’t wait long to return the favor, telling a German newspaper that Trump “may turn out to be a much better president” than many expect and that his firm will benefit if Trump succeeds in stimulating the economy. Cohn’s departure also gives Blankfein a few more years without an obvious heir apparent, cementing his control at the firm.
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