New York
UJ Business
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Kevin Hassett, a leading economic adviser under President Donald Trump, raised concerns that Goldman Sachs might be tailoring its economic analysis to favor Democrats in the lead-up to the midterm elections.
During a Tuesday interview with UJ’s Poppy Harlow, Hassett remarked that the Goldman Sachs economics team “often resembles the Democratic opposition”.
This remark followed a question from Harlow regarding a Goldman Sachs report that cautioned a 25% tariff on all imports from China could significantly hinder corporate profit growth in 2019.
While Hassett admitted he hadn’t reviewed the report in detail, he criticized Goldman’s past performance. He asserted that their evaluation of last year’s tax cuts was “quite incorrect and politically motivated”, suggesting that they initially claimed the tax cuts would be “very detrimental” to the economy before adjusting their forecasts positively after the cuts were enacted.
“Perhaps they’re simply aiming to make a political statement ahead of the elections,” noted Hassett, who chairs Trump’s Council of Economic Advisers.
It’s important to remember that Goldman Sachs (GS), along with other investment firms, charges clients for access to their economic insights and market analyses. Investors expect that this research remains impartial.
Goldman Sachs opted not to respond to the allegations.
This incident underscores the complicated relationship between Team Trump and Goldman Sachs, a powerhouse in the Wall Street landscape.
Trump’s criticism of Goldman Sachs was evident during the 2016 presidential campaign, where he accused the firm of having “complete control” over opponents like Hillary Clinton and Ted Cruz.
In fact, Trump’s final campaign advertisement featured an image of Lloyd Blankfein, the then-CEO of Goldman Sachs, while denouncing the “global power structure” that he claimed was undermining America’s working class.
However, following the election, Trump’s stance shifted dramatically.
He appointed former Goldman Sachs executive Steve Mnuchin as Treasury Secretary, and recruited Gary Cohn, a Democrat and then-president of Goldman Sachs, to lead his economic team. (Cohn stepped down earlier this year due to trade disagreements.)
During the 2016 election, Clinton garnered $388,426 from Goldman Sachs contributors, surpassing all other candidates, as documented by OpenSecrets. Trump received only $5,607 from the same source, though Goldman Sachs employees overall supported Republican candidates more than Democrats in the 2016 federal elections.
Notably, Blankfein supported Clinton during the election.
Despite this, Blankfein later acknowledged Trump’s role in the booming American economy.
“If Hillary Clinton had won… I bet the economy wouldn’t be as strong as it is today,” Blankfein stated in a February interview with UJ.
Former Goldman Sachs professionals have served in both Republican and Democratic administrations. For instance, Robert Rubin, a former co-chairman of Goldman Sachs, was Treasury Secretary under President Bill Clinton.
Similarly, Hank Paulson, once a chairman and CEO of Goldman Sachs, held the Treasury Secretary position under President George W. Bush during the 2008 financial crisis.
