News Release

Tax Plan: Goldman Always Wins

GARY RIVLIN, garyrivlin at gmail.com, @grivlin
Available for a limited number of interviews, Rivlin is a reporting fellow with The Investigative Fund at The Nation Institute. A former New York Times reporter, he is the author of six books, including, most recently, Katrina: After the Flood.

He recently co-wrote the pieces “Gary Cohn Is Giving Goldman Sachs Everything It Ever Wanted From the Trump Administration” about the director of the National Economic Council, and “Wall Street Wants to Kill the Agency Protecting Americans From Financial Scams.”

Rivlin wrote: “Like anyone taking a top job in the Trump administration, Cohn was required to sign a pledge vowing not to participate for the next two years in any matter ‘that is directly and substantially related to my former employer or former clients, including regulations and contracts.’ But presidents have sometimes issued waivers to these requirements, and it is unclear whether the Trump administration is making such waivers public. …

“Cohn shared the podium with fellow Goldman alum [Treasury Secretary Steven] Mnuchin (the two made partner there the same year) when the administration unveiled its new tax plan, one that, if the past is prelude, had the potential to save Goldman more than $1 billion a year in corporate taxes. …

“Years of financial disclosure forms confirm that Cohn is indeed very rich. At the end of 2016, he owned some 900,000 shares of Goldman Sachs stock, a stake worth around $220 million on the day Trump announced his appointment. Plus, he’d sold a million more Goldman shares over the previous half-dozen years. In 2007 alone, the year of the big short, Goldman Sachs paid him nearly $73 million — more than the firm paid CEO Lloyd Blankfein. …

“In the wake of the … white supremacist rally in Charlottesville, Virginia, Cohn confessed to the Financial Times that he has ‘come under enormous pressure both to resign and to remain.’ But the man who the Washington Post has dubbed Trump’s ‘moderate voice’ declared that neo-Nazis would not force ‘this Jew’ to leave his job. ‘As a patriotic American, I am reluctant to leave my post as director of the National Economic Council,’ Cohn told FT. ‘I feel a duty to fulfill my commitment to work on behalf of the American people.’

“Or at least a few of them. The Trump economic agenda, it turns out, is largely the Goldman agenda, one with the potential to deliver any number of gifts to the firm that made Cohn colossally rich. If Cohn stays, it will be to pursue an agenda of aggressive financial deregulation and massive corporate tax cuts — he seeks to slash rates by 57 percent — that would dramatically increase profits for large financial players like Goldman. …

“Goldman received at least $22.9 billion in public bailouts, including $10 billion in TARP funds and $12.9 billion in taxpayer-funded payments from AIG. …

“Yet rather than publicly recuse himself on attempts to undo Dodd-Frank, Cohn has led the charge from inside the White House. On that matter, Cohn is a walking, talking conflict of interest. …

“As federal investigations found, the firm, which still claims ‘our clients’ interests always come first’ as a core principle, failed to disclose that its top people saw disaster in the very products its salespeople were continuing to hawk.

“Goldman still held billions of mortgages on its books in December 2006 — mortgages that Cohn and other Goldman executives suspected would soon be worth much less than the firm had paid for them. So, while Cohn was overseeing one team inside Goldman Sachs preoccupied with implementing the big short, he was in regular contact with others scrambling to offload its subprime inventory. One Goldman trader described the mortgage-backed securities they were selling as ‘shitty.'”