Thursday, March 15, 2018

Gary Cohn of Goldman Sachs in the White House: A Hidden Agenda?

Rex Tillerson, the U.S. Secretary of State fired by U.S. President Donald Trump and former CEO of Exxon, an international oil company based in the U.S., did not allow his difference with the president of tariffs on steel and aluminum to be a deal breaker. In this respect, the ex-CEO was not doing his company’s bidding. That is to say, he was not primarily in public service to serve the private interests of a multinational corporation. Unfortunately, this cannot be said of Gary Cohn, the ex-president of Goldman Sachs who quit as Trump’s chief economic advisor just after the tariffs were announced. Tariffs in general and especially to protect goods in another sector are not in the interests of a major American banks with substantial international business. If the former president of Goldman Sachs had taken the post in government to further Goldman’s interests, the question is whether public service is mere window-dressing at the highest levels of government—plutocracy being the real name of the game.
In a statement at the time of his resignation, Cohn wrote, “It has been an honour to serve my country and enact pro-growth economic policies to benefit the American people. In particular the passage of historic tax reform.”[1] That reform lowered the corporate tax rate and thus was a financial benefit to Goldman Sachs. Cohn left this point out and instead cited the benefit to the American people, which might thus have been a mere subterfuge designed to hide the possibility that the ex-president of Goldman Sachs was actually doing his firm’s bidding.
That Cohn was instrumental in getting the corporate tax rate reduced and that he resigned at least in part because President Trump acted aversely to Goldman Sachs’ interests in enacting tariffs—even just as a negotiating tactic in the trade negotiations then going on—suggests that Cohn had taken the governmental post to safeguard and promote the financial interests of Goldman Sachs. Perhaps President Trump had been obliged to fill the position with such a person in exchange for having accepted campaign contributions from the firm or even the financial industry more generally. It would then be no accident that the Secretary of the Treasury was also a Goldman alum.
The larger question regards whether the public interest can be served in a political economy in which large companies have substantial political leverage over aspiring candidates for office via campaign contributions. At the time of Tillerson’s firing, President Trump remarked that he was finally able to have a cabinet of his own—of his choosing. This statement implies that he had been obliged initially to hand over several cabinet positions to people not of his own choosing. Had Exxon purchased the de facto first chance to fill the Secretary of State position, and Goldman Sachs the U.S. Treasury and chief economic advisor positions? With public statements insisting on having served the American people, which would hardly be need to be said were it true, it should come as no surprise that the American people have been kept in the dark concerning the influence of “dark” money on “public” offices at the expense of the public good.

For more on this topic, see Institutional Conflicts of Interest



1. Kate Kelly, Maggie Haberman, and Peter Baker, “Gary Cohn to Resign as Trump’s Top Economic Advisor,” The New York  Times, March 6, 2018.