Plugging the Swamp Drain at Treasury?
Picking Steven Mnuchin sends a message to Wall Street.
For more than 16 months, Donald Trump ran a populist campaign based on supporting Main Street instead of Wall Street. But a sign that the rhetoric isn’t going to meet reality was Trump’s appointment of Steven Mnuchin, a onetime partner of the much-maligned Goldman Sachs, as his finance chairman. Once elected, it was no surprise that Trump tapped Mnuchin for his treasury secretary. He’s made many smart cabinet moves to shore up various constituencies, and with this one, he’s thrown Wall Street a bone.
Remember, this was the candidate who accused fellow Republican Ted Cruz on Twitter: “Goldman Sachs owns him, he will do anything they demand. Not much of a reformer!” Add to this the facts that Mnuchin is second-generation Goldman Sachs, worked for a time for a firm controlled by radical leftist financier George Soros, and has donated millions of dollars to Democrats over the years, and it seems a curious choice. Then again, Donald Trump admitted he wasn’t running as a conservative, so this shouldn’t be completely unexpected.
Nor is the Goldman Sachs-to-Washington connection stopping with Mnuchin. High on Trump’s short list for a high-level position is Goldman Sachs President Gary Cohn. We also shouldn’t forget that the much-reviled Trump chief strategist Steve Bannon spent time there in the 1980s. It’s a series of selections that’s turning heads, and bringing some to ask: How much Goldman Sachs is too much?
And while Trump’s pick for Secretary of Commerce, Wilbur Ross, isn’t a Goldman Sachs alumnus, he’s associated with Rothschild, another Wall Street firm. But Ross, until recently a longtime Democrat donor as well, made his billions buying and selling distressed businesses in the coal and steel industries, among others.
Assuming all of Trump’s selections are confirmed, the finance portion of his cabinet will look more like Wall Street than Main Street. Obviously they will be experts in the financial field, but the question is whether they will be using the same playbook Trump used to win election. This holds especially true for Trump’s tax plan, which Mnuchin said would be the “largest tax change since Reagan” while warning that the changes would not address the extremely progressive nature of the tax code. “Any reductions we have in upper-income taxes will be offset by less deductions, so that there will be no absolute tax cut for the upper class,” said Mnuchin. While it sounds like those in the top 1% of households are greedy because they make 17.2% of the income, they pay more than their fair share according to the Tax Policy Center — 28.7% of all federal taxes. In any case, it’s a sure bet Democrats will be restoring their mantra of “no tax cuts for the rich” no matter what Mnuchin does.
And if nothing else, the incoming treasury secretary is already on the Democrats’ bad side: As an investor in several blockbuster films (as part of a financial entity called RatPAC-Dune Entertainment), he was a backer of the film “American Sniper.” Some colleges banned the film from campus because a few Muslim students were offended.
Donald Trump won election by cutting against the political grain. That doesn’t mean he’s always going to cut against that grain. And his election doesn’t mean the swamp will be drained overnight. The question about his money men is whether they’ll help drain it.