During the campaign, Donald Trump said he wanted to fix our rigged economic system. And we can’t do that, he said, by counting on the people who rigged it in the first place.
He talked a big game about Wall Street and the big banks. He repeatedly called out Goldman Sachs, the Wall Street behemoth, by name in ads and speeches, characterizing the firm as controlling his rivals Hillary Clinton and Ted Cruz.
So it should come with some shock, at least to Trump voters, that now President-elect Trump has chosen a consummate Wall Street insider, Steve Mnuchin, for treasury secretary.
Mnuchin spent 17 years as an executive at Goldman Sachs before continuing his lucrative career as a banker and investor. Is this not the swampiest of characters that Trump vowed to drain away?
Trump’s anti-Wall Street messaging resonated with millions of voters. A poll taken just before the election showed that nearly 70 percent of undecided voters in key swing states wanted to break up the big banks and cap their size to avoid another financial crisis.
The same proportion wanted to close the “carried-interest loophole,” an insidious provision that enables hedge fund managers to pay lower taxes than nurses.
It’s unclear whether Trump’s anti-Wall Street messaging made the difference for these voters. But it’s abundantly clear that he didn’t mean a word of it.
In Washington, personnel is policy. And Mnuchin’s appointment casts serious doubt that Trump will follow through with any of his bluster on Wall Street.
Mnuchin isn’t just any Goldman Sachs alumnus: He oversaw one of the largest foreclosure operations in the country. Mnuchin bought mortgage lender IndyMac in 2009, renamed it OneWest, and continued on as its chair through 2015 — a period in which OneWest foreclosed on more than 36,000 families.
What exactly does Mnuchin want to do while in power?
In his first announcement, Mnuchin exclaimed his “number one priority is tax reform,” promising to work with Congress to pass the “biggest tax cut since Reagan.” He claims the benefits of this tax cut will go to middle class families, rather than the upper class.
Fortunately, tax plans, unlike campaign promises, can be easily and quickly fact checked. Unfortunately, Mnuchin’s statement comes back pants-on-fire false.
Over half of the cuts in Trump’s proposed tax plan would exclusively benefit the top 1 percent, according to the non-partisan Center on Budget and Policy Priorities. The plan would increase their after-tax income by 14 percent, 10 times more than for middle-income earners.
Mnuchin won’t be the only Wall Streeter in the Trump administration. Steve Bannon, the chief strategist for the president-elect and former head of the white supremacist news outlet Breitbart, is a fellow former Goldman Sachs employee.
The Wall Street swampiness of both Mnuchin and Bannon, however, pales in comparison to that of Wilbur Ross, the billionaire investor selected by Trump to lead the Commerce Department. The 79-year-old investor built a career on greed, exploitation, and apparent tone deafness. Ross infamously whined in 2014, “The 1 percent is being picked on for political reasons.”
These former Wall Streeters will have serious power overseeing major parts of the government and the overall economy.
It’s been just eight years since Wall Street bankers had to come to Washington, hat in hand and utterly humbled, to ask for a taxpayer funded bailout. The reforms put in place to prevent a repeat of the 2008 crisis are tenuous at best — and now they’re under serious threat from the same people they were designed to rein in.
Josh Hoxie directs the Project on Taxation and Opportunity at the Institute for Policy Studies.