With everyone acting somewhat "shocked" by the rumors that Gary Cohn has usurped power from Steve Bannon inside the Trump White House, we wanted to take this moment to ask, "Why?"
See, we're not even raising an eyebrow at the idea that Bannon could be stymied and then overwhelmed by a Goldman Sachs executive because not only is it not surprising, it's happened before. In fact, Bannon presents the perfect retort to the argument that Goldman Sachs is running an evil coup inside Trump's administration. Bannon is about as beholden to Goldman Sachs as Justin Timberlake is to N*Sync, and as far as Goldman is concerned, Bannon is more of a Joey Fatone.
In 1985, Bannon was a Navy vet in his early 30s fresh out of Harvard Business School who went to work at Goldman Sachs working in M&A. He lasted there until 1990 when he left as a VP to start his own boutique M&A firm. Now, for the kids and Millennials out there, being a VP at Goldman in 1990 was even more junior than it is now and boutique M&A was the late 80s Wall Street version of a craft cocktail bar; they seemed to pop up everywhere and you definitely knew someone who knew someone who started one.
The other thing about leaving Goldman as a junior person in 1990 is that it's a stone certainty Bannon started with guys who made partner by 1999, and being a partner at Goldman in 1999 cut you in on the spoils from Goldman's IPO. As we now know, Steve Bannon holds a pretty intense grudge, so it's not hard to fathom that Bannon holds Goldman Sachs in roughly the same esteem that Elizabeth Warren does. A born-again blue-collar class warrior like Bannon cannot look back fondly on years of running models 20 hours a day in the pre-internet era only to realized that 33-year-old analysts with no prep school connections had limited futures at Goldman Sachs.
To put it more succinctly, if you're someone who thinks that they vehemently distrust Goldman Sachs, Steve Bannon more than likely thinks you're an amateur.
So imagine Bannon's fury upon seeing that this is now happening inside the White House he made possible by filling Trump's brain with enough populist pablum to pull in previously un-winnable swing states:
Trump refers to his director of the National Economic Council (NEC), as "one of my geniuses," according to one source close to Cohn.
More than half a dozen sources on Wall Street and in the White House said Cohn has gained the upper hand over Trump's chief strategist, Steve Bannon, the former head of the right-wing website Breitbart News and a champion of protectionist trade opposed by moderate Republicans and many big companies.
There sits another blue-collar boy with Goldman on his resume, his massive frame and shiny pate presenting an embarrassing rejection to what Bannon was almost able to pull off. Gary Cohn was a huge success at Goldman Sachs, a power player with name recognition. And that's the shit that gets Donald Trump's blood pumping, especially when Gary isn't the one uncomfortably close to Neo-Nazis and/or picking fights with his son-in-law.
More importantly, Gary Cohn succeeded at Goldman Sachs how almost everyone succeeds at Goldman Sachs; employing an agnostic pragmatism in which profit is divine. Say what you will about Goldman Sachs, but it's hard to say that it's not at its basest level one of our greatest meritocracies. Here's a thought experiment: If Goldman Sachs is running the White House, how the fuck is Sean Spicer still giving daily briefings?
But Goldman's influence is creeping into visibility:
Apparently paying more heed to Cohn and other moderates on his team, Trump last week said he was open to reappointing Janet Yellen as Federal Reserve chairman when her term is up and he also held back from naming China a currency manipulator.
Both stances marked a reversal from his campaign when Trump criticized Yellen and vowed to label China a currency manipulator on "day one" of his administration, a move that could lead to punitive duties on Chinese goods.
Sources close to Cohn and inside the White House said there are sharp policy differences between Cohn and both Bannon and Reince Priebus, White House chief of staff.
Clearly Cohn and Dina Powell (who is not only a Goldman alum but also the only senior Trump staffer to have actually worked in the White house before) have used their dark Goldman Sachs magic to prevail upon the new president to do evil things like avoid a trade war and stop delegitimizing the Federal Reserve. The Goldman people aren't "running some Goldman playbook," they're undoing all the radically Un-Goldman shit that never should have happened in the first place.
And if Trump stays on this Goldmanesque course of logical thinking, Bannon might be truly fucked because things might start getting done. Should that happen, conspiracy theorists would have us believe that Bannon would turn to other powerful Goldman Trumpists to get back in the game.
Steve Mnuchin? To Steve Mnuchin, Goldman is a place where his dad worked and he learned some stuff. As we've said before, Mnuchin is the only person on the planet Earth who can point to his time at Goldman as the least controversial period of his career.
Jay Clayton? He was Goldman's lawyer, he didn't actually work there. He worked as a partner as Sullivan & Cromwell, so frankly if Goldman wasn't his client, the guy would've sucked as a white shoe corporate lawyer. Sure, Clayton's wife works at Goldman, but when it comes to Trump and Bannon, let's just leave wives out of it, shall we?
Jim Donovan? Bitch, please.
It turns out that while everyone was worried that Goldman Sachs was the VD spreading inside our body politic, Bannon and his team tried to close our borders and set fire to our already rickety health care system. But with Gary Cohn and Dina Powell moving from 200 West Street to 1600 Pennsylvania Ave, it now seems clear that Goldman Sachs is the condom.