New York
UJ Business
—
Kevin Hassett, a leading economic advisor to President Donald Trump, indicated that Goldman Sachs might be tilting its economic analysis in favor of the Democrats in light of the upcoming midterm elections.
Hassett remarked to UJ’s Poppy Harlow on Tuesday that the Goldman Sachs economic team “almost resembles the Democratic opposition” at times.
His comments followed a question from Harlow regarding a Goldman Sachs research report that cautioned a 25% US tariff on all Chinese imports could severely impact corporate profit growth in 2019.
Although Hassett admitted he had not reviewed the research, he criticized Goldman’s previous analyses. He asserted that their evaluation of last year’s tax cuts was “significantly flawed and politically motivated,” claiming Goldman had initially suggested that the tax cuts would be “very damaging” to the economy, only to later revise their forecast positively after the tax cuts were enacted.
“Perhaps they’re just trying to make a partisan statement leading up to the elections,” said Hassett, who chairs Trump’s Council of Economic Advisers.
It’s important to note that Goldman Sachs (GS), like many investment banks, charges clients for access to their economic and market expertise, which investors expect to be impartial.
Goldman Sachs chose not to address the criticism.
This incident adds a new chapter to the complicated relationship between Team Trump and Goldman Sachs, the leading financial institution on Wall Street.
Trump was critical of Goldman Sachs during the 2016 presidential campaign, asserting that the firm had “complete, complete control” over opponents Hillary Clinton and Ted Cruz.
Trump’s final campaign advertisement featured an image of Lloyd Blankfein, the then-CEO of Goldman Sachs, as his narration denounced the “global power structure” for exploiting America’s working-class citizens.
Following the election, Trump shifted his stance.
He appointed former Goldman Sachs partner Steve Mnuchin as Treasury Secretary and brought on board Gary Cohn, then Goldman Sachs president and a registered Democrat, to lead his economic team. (Cohn departed earlier this year following a disagreement regarding trade policies.)
During the 2016 election, Clinton received $388,426 from Goldman Sachs individuals, the highest amount for any candidate, as reported by OpenSecrets. Trump, in contrast, received $5,607. Nevertheless, employees from Goldman Sachs contributed more to Republican candidates than Democrats during the 2016 federal elections.
Blankfein supported Clinton during the election.
However, after the election, Blankfein acknowledged Trump for the strong American economy.
“If the president hadn’t won, and Hillary Clinton had won… I believe the economy would be performing better today than it otherwise would have,” Blankfein stated to UJ in February.
Alumni of Goldman Sachs have held positions in both Republican and Democratic administrations. Robert Rubin, who was co-chairman of Goldman Sachs, served as the Treasury Secretary under former President Bill Clinton.
Hank Paulson was previously the chairman and CEO of Goldman Sachs before heading the Treasury Department under former President George W. Bush amid the 2008 financial crisis.
