Want a top position in the administration of U.S. President George W. Bush? It helps to have worked at Goldman Sachs.
Robert Zoellick, currently a vice chairman at Goldman, is the latest from the powerful Wall Street investment bank to be appointed to a top post by the president. A former U.S. trade representative, Zoellick has also served at high levels in the State and Treasury departments. But his ascension to the presidency of the World Bank is the latest chapter in what has become an unmistakable trend. Indeed, Goldman Sachs has become a favorite source from which the administration draws many appointees.
Hank Paulson, the former Goldman Sachs Chief Executive Officer and current treasury secretary, is the most prominent alumnus serving in the Bush Administration, but he is hardly alone. In fact, many say it was White House Chief of Staff Josh Bolton, a former executive director of legal and government affairs at Goldman, who helped persuade Paulson to give up the highest pay package on Wall Street and come to Washington. Robert Steel should feel comfortable as Paulson's advisor for domestic finance at the Treasury Department, as he was formerly vice chairman to Paulson at Goldman Sachs. Reuben Jeffrey, who worked for the firm as a managing partner, now serves as chairman of the government commission regulating U.S. commodity futures and trading.
Other Goldman alumni include Assistant Secretary of State Randall Fort, who was the firm's co-chief operating officer, and Stephen Friedman, a former Goldman CEO, who is currently chairman of the President's Foreign Intelligence Advisory Board.
"There's no question there's a tradition of public service here," says Peter Rose, a Goldman Sachs spokesman, who also points to the command-and-control mindset his firm tries to avoid. "Teamwork is very important here, as in Washington, where you have to work by persuasion, rather than just barking an order."
The fact that Goldman executives are among the highest earners on Wall Street may be another reason they end up in Washington. "They've already made so much money that they can afford to work for what is essentially a rounding error," explains John Steele Gordon, a Wall Street historian. "I don't know what the chairman of the Council of Economic Advisors gets paid, but I'd be surprised if it was more than 150,000 dollars a year. And to a Goldman Sachs partner, that's what he pays to have his private jet parked." [Gee, thanks for the anti-populist commentary, John. Rounding error...that's exactly former Enron CEO Jeff Skilling's terminology.]
While these former Goldman executives are qualified, not everyone is happy with the situation. "The views of Wall Street are not necessarily the views of the country as a whole," argues Dean Baker, co-director of the Center for Economic and Policy Research...
Meanwhile, the level of influence Goldman Sachs gains from the arrangement is unclear. "They certainly don't direct business to Goldman Sachs because Congress would be all over them if they tried something like that," Gordon contends.
Goldman Sachs's White House LBO
From the Yomiuri Shimbun comes this self-explanatory article about the revolving door between the Bush White House and the venerable investment banking firm Goldman Sachs. I have made some previous notes on Treasury Secretary Henry Paulson and former US Trade Representative Robert Zoellick. However, it turns out that a couple of more Bushites are Goldman Sachs alumni: