The Best Parts Of Rolling Stone's Takedown Of Goldman Sachs Amid Trump's Appointment Of Gary Cohn

During his campaign, President-elect Donald Trump dissed about half of the United States’ major corporations, and Goldman Sachs Group Inc GS was not exempt from his rage – pretty much the opposite. Trump repeatedly promised to “drain the swamp,” making reference to eliminating Wall Street’s influence over domestic politics and policy.

Once elected, he made a u-turn, appointing Goldman Sachs investment banker and managing partner Steve Bannon as the White House chief strategist and Steven Mnuchin as the Treasury secretary. Other former Goldman Sachs employees who will occupy key spots in Trump’s administration include Bob Rubin, Lawrence Summers, Hank Paulson and Anthony Scaramucci.

Notwithstanding, Trump’s most notable move was the appointment of Goldman’s chief operations officer Gary Cohn as the director of the National Economic Council and an assistant to the president for economic policy.

In a long editorial piece titled "The Vampire Squid Occupies Trump's White House," Rolling Stone’s Matt Taibbi delved into Cohn’s problematic appointment.

“The new party line, emanating both from Washington and from Alt-Right yahoos on the Internet, is that people like Gary Cohn are no longer the swindling scum-lords Trump said they were a few months ago, but simply smart businessmen,” he wrote.

A Close Look At Goldman's Not-So-Golden History

In order for people not to get lost in rhetoric and remember how “evil” Goldman Sachs and its executives are, Taibbi went over the company’s recent history of controversy. Here are some of the main points:

  • Goldman has “an extraordinary history of placing its executives in high-ranking governmental and quasi-governmental positions.”
  • The bank has been mixed up in the trafficking of toxic mortgages, an extensive state corruption case in Malaysia, the manipulation of global commodity prices and “a heinous episode involving Greece in which the bank helped to mask the country's ballooning debt while simultaneously working with JPMorgan Chase [JPMorgan Chase & Co. JPM] to create an index for betting against Greece's economy.”
  • Goldman Sachs was one of the main players responsible for the 2017 financial crisis. But, unlike Bear Stearns, Merrill Lynch and Lehman Brothers, the company survived the cataclysm. While the corporation argued that this was due to its smart and humble leadership, the Senate Permanent Subcommittee on Investigations concluded that it had instead saved itself by passing on its terrible mortgage investments to its clients while simultaneously shorting them. Through numerous, questionable deals, the bank “went from having a $6 billion bet on mortgages to having a $10 billion bet against them” in just a few months — this is what they call the "big short." Notice, however, that the company has repeatedly denied having bet against its own clients.
  • Analysts have argued that Goldman Sachs should have gone out of business around the financial crisis, like other big banks. Nonetheless, “two little-discussed acts of government welfare in September of 2008 helped save the company,” Taibbi explained. (1) The government granted the company an emergency Commercial Bank Holding Company status, even though it was never a commercial bank, allowing it to get funds from the Federal Reserve. (2) The Fed prohibited short-selling financial stocks, protecting Goldman from smart investors who sensed that something was wrong.
Image Credit: By Rolling Stone - http://www.rollingstone.com/templates/rolling-stone-templates/theme/rstheme/images/rsLogo.png, Public Domain, Wikimedia Commons
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Posted In: NewsPoliticsEventsGlobalEcon #sMediaGeneralBEAR STEARNSBob RubinDonald TrumpGary CohnHank Paulson and Anthony ScaramucciLawrence SummersLehman BrothersMerrill LynchRolling StoneSteve BannonSteven MnuchinTrump
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