Remember when the Trump administration nominated someone to run the SEC back in January? Yeah, we almost forgot too, but there's been a development...
The Senate on Tuesday approved President Donald Trump’s choice to lead the Securities and Exchange Commission, elevating a Wall Street lawyer who hopes to turn around the decline in the number of public companies over the past 20 years.
So the new White House finally has its "Top Wall Street Cop" in place with Jay Clayton. But before he even gets sworn-in the now former partner at Sullivan & Cromwell has been politically thrown-into Trump's "Government Sachs" basket of former Goldman execs relocating to his administration. But if you will indulge us for a moment, may we offer the opinion that calling out Jay Clayton for his connections to Goldman Sachs is really fucking dumb?
As we polemicized recently, the seemingly constant drumbeat of attacking Trump by pointing out his connections to Goldman Sachs is probably the weakest position from which one can wage a thoughtful assault on a president who doesn't know why the Civil War happened and openly yearns to have a fun boys weekend with the violent maniac currently running the Philippines. Working at Goldman Sachs was a dark mark on people working in past White Houses because those White Houses all made at least some effort to disguise the fact that the revolving door between Wall Street and The Beltway hasn't evolved from "accepted" to "necessary." Regardless of your political persuasion, it's hard to deny that 200 West Street contains a stockpile of top-tier human capital the government cannot afford to hire without the lure of power and future private sector wealth. And in this administration, we should thank our lucky stars that a handful of Goldman-trained adults are minding the store.
That said, almost none of this matters when discussing Jay Clayton because HE NEVER WORKED AT GOLDMAN SACHS.
Clayton did represent Goldman as a partner at Sullivan & Cromwell (kind of like how his predecessor Mary Jo White represented Lehman Brothers during her first tour at Debevoise) and his wife currently works at Goldman (kind of like how White's husband John was, and is, the head corporate partner at Cravath Swaine & Moore, a gig that puts him somewhere on the Wall Street power structure just behind Jamie Dimon and well ahead of Michael Corbat). Clayton's resume isn't as varied as White's and he lacks her prosecutorial background, but running the SEC hardly makes one part of a hallowed lineage of moral paragons. Joe Kennedy Sr. was the first-ever SEC chairman and his previous experience came from openly trading on insider information and "not" bootlegging (wink wink.)
According to previous reports, Clayton's wife Gretchen has already committed to leaving Goldman once he's confirmed and Clayton will recuse himself from all matters relating to Goldman while in office. While that's not exactly the ideal situation, it hardly prompts this kind of response:
The Senate on Monday cleared the way to confirm Jay Clayton as chairman of the Securities and Exchange Commission, making a Wall Street power lawyer one of the nation’s top financial regulators.
By a vote of 60 to 36, the Senate voted to proceed to a final vote for Clayton, which he is all but certain to clear. Clayton, a partner at the elite corporate law firm Sullivan & Cromwell, is also one of several top Trump appointees with a Goldman Sachs background, having served as the megabank’s bailout attorney in 2008. Trump’s top economic advisor, Gary Cohn, White House chief strategist Steve Bannon and Treasury Secretary Steven Mnuchin all enjoyed lucrative careers at Goldman.
These are the first two paragraphs of a Huffington Post report on Clayton's pending confirmation entitled "Congress Is About To Confirm Another Former Goldman Sachs Honcho For Trump."
Right off the bat we have a dumb and wrong headline. The word "Honcho" would lead an uniformed reader to believe that Clayton not only worked at Goldman but likely held a very senior role. It's also rather spurious to compare the "lucrative careers" that Cohn, Bannon and Mnuchin had at Goldman to Clayton. Those guys benefitted from their time at Goldman because Goldman paid them...directly...for WORKING THERE.
And let's not get too carried away with how well Steve Bannon did at Goldman because by Goldman standards he was something of a failure.
Challenging the Trump administration for its bald conflicts of interest and cosmically strange staffing is totally fair game. Yes, the whole thing does feel like the guys behind Fyre Festival threw a circus in which all the performers are escapees from a gothic, fictional mental asylum where inmates were forced to read only Ayn Rand and The Art of the Deal, but going after Clayton for working at Goldman Sachs is imbecilic and harmful because it is actual fake news.
We get that things are fraught between this administration and the media, but this kind of shit not only doesn't inform "The Opposition," it makes HuffPo look like the liberal answer to Breitbart.
But let's get down to brass tacks. As far as we can tell - based on the role itself and the backgrounds of former chairmen - Jay Clayton is more than qualified to run the SEC. He is by all accounts an adult man who could be reasonably expected to take the job seriously and has seen a lot of shit in his career from which he can draw upon to protect the markets. In fact, if there are people out there looking to nail Jay Clayton to the wall, we would point out that he also represented Deutsche Bank and Pershing Square Capital.
But once again we might run into something of a political Rorschach test here, because while some might see a surfeit of conflict in the fact that Clayton once counseled Bill Ackman and John Cryan, we take pity on him for this and feel like he's earned a break working in government.