Has Former Goldman Sachs President, Gary Cohn, Gone Rogue on Glass-Steagall?

There are a few important things to know about Gary Cohn. Until Donald Trump tapped him to be the Director of the National Economic Council, he had worked at Goldman Sachs for a quarter century, rising to the position of President of the firm and second only to its CEO, Lloyd Blankfein. Cohn walked out of Goldman in December with approximately $285 million, comprised mainly of Goldman stock, some of which had been granted early vesting. Since his exit from Goldman, Cohn has wasted no time in selling large chunks of his Goldman shares according to his financial disclosures. While this serves to reduce his conflicts of interest with Goldman, it also provides a face-saving means of exiting a massive position in a Wall Street bank without the appearance of panic or disloyalty.
Against this backdrop comes the widely reported news that on April 5 Cohn met with Senators serving on the Senate Banking Committee and expressed support for bringing back a modern-day version of the depression era Glass-Steagall Act – legislation which was passed as a result of the Wall Street collapse of 1929 to 1933, which erased 90 percent of the market’s value. (Yes, 90 percent.) That legislation created Federally-insured deposits and barred insured commercial banks from being affiliated with Wall Street investment banks. It protected the U. S. financial system for 66 years until its repeal in 1999 under the Bill Clinton administration. It took only nine years after its repeal for Wall Street to implode in the same epic fashion as the ’29 crash.

This post was published at Wall Street On Parade on April 17, 2017.

NOT JUST SYRIA: 5 HUGE NEWS STORIES TO KEEP AN EYE ON AMID THE MADNESS

The world’s eyes and ears have once again turned toward Syria following last week’s chemical weapons attack and U. S. President Donald Trump’s subsequent air strikes on the Assad government. Mainstream media, independent media, and social media platforms are fixing fierce attention on the ongoing developments.
These events undoubtedly deserve widespread, ongoing scrutiny. From the United States government’s lack of evidence that the Syrian government was behind the chemical attack to the media’s complicity in driving a pro-war narrative and president Trump’s hypocrisy in bombing Syria – after criticizing former president Barack Obama for doing the same thing – further critical analysis of the recent airstrikes is vital.
But even as skepticism toward these events should remain heightened, so should awareness of countless other major developments. Here are five to follow:
1. Trump Appoints Pharmaceutical Consultant to Head the FDA – This week, the president appointed Scott Gottlieb, a pharmaceutical industry insider who has served the boards of multiple pharmaceutical companies, to chair the Food and Drug Administration. Gottlieb currently still works as a consultant for GlaxoSmithKline. He has received $414,000 from GSK, Pfizer, AstraZeneca, Bristol-Myers Squibb, and Valeant Pharmaceuticals. He has also received tens of thousands of dollars in speaking fees from pharmaceutical companies like Merck and Mikart, as well as other corporations – including Goldman Sachs. He has taken several trips through Washington’s revolving door, with brief stints at the FDA mixed in with multiple positions consulting pharmaceutical companies. Trump’s pick follows in the footsteps of Barack Obama, who also appointed a pharmaceutical industry insider to chair the FDA.

This post was published at The Daily Sheeple on APRIL 11, 2017.

45 Trillion Reasons Why Gary Cohn Has Recused Himself From All Goldman Matters

Goldman’s former President and COO, who was recently picked to be Trump’s chief economic advisor as head of the National Economic Council, will recuse himself from any matters directly involving his former employer, the White House told the Financial Times.
The topic emerged when the FT learned that the former “#2” at Goldman was spearheading Goldman’s lobbying at the US derivatives regulator on rules prompted by the role swaps contracts played in the 2008 financial crisis. As president of Goldman Sachs, Cohn attended four meetings in 2015 and 2016 with top officials at the CFTC to discuss the swaps rules mandated by the sweeping Dodd-Frank reforms, according to meeting records.
As the FT adds, Cohn’s most recent CFTC meeting as a Goldman representative was on February 19 2016, according to the records. On the same day Trump was campaigning in South Carolina, where he mocked Ted Cruz and Hillary Clinton by saying Goldman Sachs had ‘total control’ over them. He ended his campaign by airing an anti-Wall Street ad that displayed an image of Goldman chief executive Lloyd Blankfein as Mr Trump talked of ‘a global power structure that is responsible for the economic decisions that have robbed our working class’.

This post was published at Zero Hedge on Feb 23, 2017.

Trump Concerned There Are Too Many “Goldman Guys” On His Team

Two days after democratic senators Elizabeth Warren and Tammy Baldwin sent a letter to Goldman CEO Lloyd Blankfein, asking if Goldman effectively runs the country through its extensive alumni links at the Trump administration, and requesting details on “lobbying” activities in the bank related to review of the Dodd-Frank Act and the Obama-era fiduciary rule on financial advice, as well as asking for any communication between the bank’s employees and Cohn, Mnuchin, nominee for the SEC chair Jay Clayton and chief strategist Steve Bannon, Bloomberg reported overnight that yet another Goldman banker, Jim Donovan, was under consideration for the No. 2 job at the Treasury Department, however it appears he has “got one big thing working against him.”
That “thing” is the overdue realization by the new president that his cabinet openly appears to have been created and staffed by populism arch nemesis #1, Goldman Sachs. Besides Steven Mnuchin, Trump’s pick for Treasury Secretary, former Goldman officials working for the new administration include former president Gary Cohn, now director of the National Economic Council; Stephen Bannon, the chief White House strategist; and Dina Powell, formerly the bank’s head of philanthropic investment, who’s an assistant to the president and senior counselor for economic initiatives.
So just like Goldman would staff every central bank’s core positions prior to Trump, after the US election, the world’s most influential investment bank has shifted all of its attention on just one person, and he is finally starting to realize that that may not be a good thing.

This post was published at Zero Hedge on Feb 12, 2017.

Is Trump Draining the Swamp or Filling It?

Trump has broken his word and is by no means draining the swamp – he is filling it. He has really betrayed a lot of people by his nomination of Gary D. Cohn as Director of the National Economic Council, which is a policy-making position for domestic and international economic issues.
The one legal firm in New York that defends the bankers is Sullivan & Cromwell. Trump has named a lawyer from that firm, Jay Clayton, to serve as Wall Street’s top cop as Chairman of the Securities and Exchange Commission. There is absolutely no possible way Clayton will call the bankers to account for anything. In fact, it would probably be a huge conflict of interest to bring charges against any bankers in New York when Sullivan & Cromwell will most likely represent them (including Goldman Sachs).

This post was published at Armstrong Economics on Jan 11, 2017.

A Complete List Of What Trump Can, And Can Not Do, On Day One And For The Rest Of 2017

With the Trump inauguration just over 10 days away, attention has now shifted to what Trump will do the moment he steps foot in the White House, and as The Hill reported this morning, judging by his campaign promises, Donald Trump will be a busy man starting on his first day in the Oval Office: “Trump has pledged to take sweeping, unilateral actions on Jan. 20 to roll back President Obama’s policies and set the course for his administration. Many of Obama’s policies he can reverse with the simple stroke of a pen.”
The Hill then lays out some of the key agenda items in terms of Immigration, Environment, Lobbying, Trade and Healthcare.
The reality, however, is a bit more nuanced than captured in the report, and has to take into consideration not only what Trump’s intentions are, but how they would integrate with Congress, where simply structural limitations could put hurdles ahead of the Trump agenda.
So, for a more comprehensive preview of what Trump can – and can not do – both on day one, and for the rest of 2017, we present a recent analysis by Alec Phillips of Goldman Sachs (which, now that Trump has surrounded himself with Goldman alumni will be as critical when it comes to fiscal policy as Goldman was when it came to advising the Federal Reserve on monetary policy), which notes that the political agenda for 2017 is starting to take shape, with tax reform and Obamacare repeal seemingly at the top of the agenda.
Trump will be delighted to know that both items can be passed without Democratic support via the budget reconciliation process.

This post was published at Zero Hedge on Jan 9, 2017.

How You Become a Crony

Trump Bump
BALTIMORE – Who’s the biggest winner so far? ‘Government Sachs!’ Fortune magazine reports that the winningest person since Trump’s election is Goldman Sachs CEO Lloyd Blankfein. Goldman’s stock price is back to where it was just before the last crash in 2008. And Blankfein is back in high cotton, too; his holdings in the firm have gained $140 million in the last four weeks.
Donald Trump pledged to take the elite down a notch. So far, they’re going in the opposite direction. Worldwide, they’re up about $4.4 trillion, as their stocks have soared in the ‘Trump Bump.’
Many of America’s best investors – including Carl Icahn and Ray Dalio – think this is just the beginning. And with some of the nation’s most successful moneymen at his side, including a former Goldman guy in the Treasury, many people are betting that Trump will bring a sustained boom.
We’ve been looking at crony capitalism. Our hypothesis is that it is funded by the feds’ fake money and enabled by their regulations. So far, we’ve looked at ex-Goldman banker Steven Mnuchin, Trump’s pick for secretary of the Treasury.
While he was making a fortune at Goldman, a major Main Street company, Sears was turned into a Wall Street victim. Its stock is down quite a bit. And it is expected to declare bankruptcy in a few months. Wilbur Ross, Trump’s new man for the Department of Commerce, used federal regulation of imports to make a billion dollars in the steel industry.

This post was published at Acting-Man on December 22, 2016.

The Week in Review: December 3, 2016

Fidel Castro died last week, giving the world – or at least those interested in truth – reason to remember the true horrors of communism. Dr. Yuri Maltsev, who visited as a former USSR economist, noted the horrific cost of Castro’s rise to power: ‘To enforce socialist slavery, more than a 100,000 were murdered and millions squeezed out.’ While many in the media and many heads of state seem to prefer to overlook this brutal reality, as Brittany Hunter noted ‘Neglecting to acknowledge the strife endured by the Cuban people during Fidel Castro’s decades-long reign of terror is not only a disservice to the memory of those who suffered, it is also a disservice to history itself.’
Meanwhile in America, President-elect Trump named former Goldman Sachs banker Steve Mnuchin to the Treasury, a curious choice for someone who claims to be draining the swamp. Trump also fulfilled a campaign promise when Carrier Air Conditioning announced they would be keeping hundreds of jobs in the US. While any steps toward tax and regulatory relief should be celebrated, so should the advantages inherent in free trade. American’s should worry less about companies leaving for oversees, and more the way government policies continue to erode their own freedoms, prosperity, and even their chocolate bars.
There is no Mises Weekends this week as Jeff is on the road traveling back from an event with Tom Woods in Orlando. But Jeff will be appearing tonight at 9pm EST with John Stossel on Fox Business Tonight to discuss cronyism is DC and the challenges politics creates in draining the swamp.

This post was published at Ludwig von Mises Institute on December 3, 2016.

The Fallacies of Bernie Sanders

Where Bernie Went Wrong: And Why His Remedies Will Just Make Crony Capitalism Worse. By Hunter Lewis. Axios Press, 2016. 284 pages.
Hunter Lewis has rendered a great service with his new book. Writing from an Austrian perspective, he has given us the definitive analysis of the Bernie Sanders phenomenon. Though Sanders did not win the Democratic nomination, he accomplished something remarkable. ‘If Bernie’s campaign was primarily an exercise in moving public opinion, it was wildly successful. He carried young people by wide margins. He shifted the Democratic Party and eventually its platform in his direction.’ (p.1)
How did he do this? ‘Bernie often says out loud what others are privately thinking.’ (p.13) The middle class and the poor are not doing well, he says; and the fault lies in a ‘rigged’ system. ‘The economy becomes rigged because the rich, primarily represented by ‘greedy’ billionaires and corporations, use their wealth to subvert the political process and take command of government.’ (p.24)
Lewis finds much truth in Sanders’s accusation. In a manifestly corrupt way, for example, failed banks and businesses were ‘bailed out’ after the financial crash of 2008. ‘[Hank] Paulson, former CEO of Goldman Sachs, was one of the architects of the Wall Street bailout of 2008 which not only rescued Wall Street, but also rescued his own firm, along with all the shares he still retained in that firm.’ (p.132)

This post was published at Ludwig von Mises Institute on Nov 25, 2016.

GREY CHAMPION ASSUMES COMMAND (PART ONE)

At each of these great gates of history, eighty to a hundred years apart, a similar generational drama unfolded. Four archetypes, aligned in the same order – elder Prophet, midlife Nomad, young adult Hero, child Artist – together produced the most enduring legends in our history. Each time the Grey Champion appeared marked the arrival of a moment of ‘darkness, and adversity, and peril,’ the climax of the Fourth Turning of the saeculum. – The Fourth Turning – Strauss & Howe
In September 2015 I wrote a five part article called Fourth Turning: Crisis of Trust. In Part 2 of that article I pondered who might emerge as the Grey Champion, leading the country during the second half of this Fourth Turning Crisis. I had the above pictures of Franklin, Lincoln, and FDR, along with a flaming question mark. The question has been answered. Donald J. Trump is the Grey Champion.
When I wrote that article, only one GOP debate had taken place. There were eleven more to go. Trump was viewed by the establishment as a joke, ridiculed by the propaganda media, and disdained by the GOP and Democrats. I was still skeptical of his seriousness and desire to go the distance, but I attempted to view his candidacy through the lens of the Fourth Turning. I was convinced the mood of the country turning against the establishment could lead to his elevation to the presidency. I was definitely in the minority at the time:
Until three months ago the 2016 presidential election was in control of the establishment. The Party was putting forth their chosen crony capitalist figureheads – Jeb Bush and Hillary Clinton. They are hand-picked known controllable entities who will not upset the existing corrupt system. They are equally acceptable to Goldman Sachs, the Federal Reserve, the military industrial complex, the sickcare industry, mega-corporate America, the moneyed interests, and the never changing government apparatchiks. The one party system is designed to give the appearance of choice, while in reality there is no difference between the policies of the two heads of one party and their candidate products. But now Donald Trump has stormed onto the scene from the reality TV world to tell the establishment – You’re Fired!!!

This post was published at The Burning Platform on November 20, 2016.

Wall Street Democrats Proved Yesterday That They Still Don’t Get It

After a humiliating election loss just eight days earlier, the Wall Street Democrats in the U. S. Senate laid the groundwork for another humiliating defeat in the midterms in 2018 by electing Senator Chuck Schumer to be the Senate Minority Leader.
Schumer is considered the poster boy for Wall Street – as their mouthpiece for lax regulation and a reliable Senate confirmation vote for Wall Street cronies to lead regulatory agencies. Over the past five years, Schumer has raised over $25.8 million for his campaign committee and Leadership PAC with the leading donors being security and investments firms and their outside law firms, according to data from the Center for Responsive Politics. Schumer’s top ten largest donors over his entire political career include seven major Wall Street banks: Goldman Sachs, Citigroup, JPMorgan Chase, Credit Suisse, Morgan Stanley, UBS and the now defunct Bear Stearns. Also in the top ten are two law firms that regularly represent Wall Street firms when they are charged with fraud: Paul Weiss and Sullivan and Cromwell.
The Democrats’ head-in-the-sand vote yesterday came despite progressive activists staging a sit-in in Schumer’s office on Monday to demand that he step aside and allow the Senate Minority Leader post to go to Senator Bernie Sanders – now widely seen across America as the true leader of the Democratic Party.

This post was published at Wall Street On Parade on November 17, 2016.

Changing the Culture of Wall Street Requires Ending Continuity Government in Washington

It’s more than a coincidence that at a time when the two leading candidates for the highest office in the United States are considered untrustworthy by tens of millions of their fellow citizens, the industry that has perpetually attempted to stack the political deck in Washington has also lost the trust of a majority of Americans.
This feels to many like having Wall Street’s one percent at the rudder for the past two decades has finally steered the ship of state into a toxic sink hole that is devouring the credibility of the United States at home and abroad.
Wall Street’s image has fallen so low that the Federal Reserve Bank of New York is holding an annual ‘Reforming Culture and Behavior in the Financial Services Industry’ conference. That New York Fed President Bill Dudley is heading up this conference shows just how hopelessly lost Wall Street really is. (Dudley is the guy who didn’t see a problem with his wife collecting $190,000 annually from JPMorgan Chase while Dudley supervised the bank. The New York Fed is also the place that allowed JPMorgan CEO Jamie Dimon to continue to sit on its Board as JPMorgan was being investigated by the Fed for losing over $6 billion in depositors’ money in the London Whale derivatives fiasco. And Dudley is also the guy that allowed the firing of one of his own bank examiners, Carmen Segarra, after she filed a negative examination of Goldman Sachs. Segarra filed a Federal lawsuit charging that she was fired in retaliation for refusing to change her examination report. The portrait of the New York Fed as a crony regulator under Dudley was dramatically broadened in 2014 when ProPublica and public radio’s This American Life released internal tape recordings Segarra had made inside the New York Fed showing a lap dog regulator cowering before a powerful Wall Street firm.)

This post was published at Wall Street On Parade on November 2, 2016.

Week in Review: October 29, 2016

Obamacare premiums are exploding, just as mises.org has long predicted. Another disastrous example of politicians discarding basic common sense in passing through legislation to address a problem they themselves have created. Unfortunately there is little hope of politicians learning from their mistakes, as they continue to push through bill, after bill, after bill that expands their influence at the expense of the market and human freedom. No wonder public faith in elections is collapsing as the reach of the state grows larger. Hopefully this growing distrust can spur a libertarian populist awakening, leading to the spread of the ideas that make civilization prosperous.
The Mises Institute will further discuss the collapsing public trust in politics next weekend during our Dallas-Ft. Worth, Mises Circle. You can join Jeff Deist, Lew Rockwell, Robert Murphy and our other great speakers in person, or follow the event live at Mises.org/live.
On Mises Weekends, Jeff is joined by Nomi Prins, a prolific writer and speaker on the subjects of central banking, financial markets, and Wall Street cronyism. She is a former managing director at Goldman Sachs and Bear Stearns, but left investment banking to speak out against what she perceives as global financial malfeasance by commercial, investment, and central banks. Nomi is a dedicated progressive who supported Bernie Sanders, but she’s also a harsh critic of the Fed and sympathetic to Austrian depictions of malinvestment and artificially-created bubbles.

This post was published at Ludwig von Mises Institute on October 29, 2016.

Goldman Sachs Said to Plan 25% Cut to Asia Investment Bank Jobs

Goldman Sachs Group Inc. plans to cut about a quarter of its investment-banking jobs in Asia, excluding Japan, because of a slump in deal-making in the region, according to a person with knowledge of the matter.
The New York-based bank plans to make the cutback of about 75 jobs in the region later this year, the person said, asking not to be identified because the matter is confidential. The job reduction comes as the bank faces its worst Asia ranking in equity issuance since 2008, according to data compiled by Bloomberg data. A Goldman Sachs spokesman said he was unable to comment.
Asia ex-Japan equity offerings have declined 29 percent this year, and Goldman’s ranking plummeted to 11th from second in 2015, its worst showing in about eight years, the data show. The company also has come under scrutiny by authorities for its role in underwriting $6 billion of bond sales for 1MDB, the Malaysian government fund at the center of several international investigations into suspected corruption and money laundering.
Chinese securities firms are mounting a challenge to western banks like Goldman Sachs and Morgan Stanley in Asia, with mainland companies occupying seven of the top 10 positions in advising on Hong Kong initial public offerings this year, data compiled by Bloomberg show. Postal Savings Bank of China Co. raised $7.4 billion in a Hong Kong initial public offering this week, the world’s biggest first-time share sale this year.

This post was published at bloomberg

New York Times Proves it is the Establishment – End of Independence

The lack of integrity among the press is becoming just in your face. The New York Times published an amazing endorsement of Hillary Clinton on Saturday in hope that they can persuade their readers readers to overlook all the scandals of Hillary and make her Present. I would understand not endorsing either, but to ignore the law, the corruption, and common sense, merely reveals that the New York Times cannot be trusted. This is even more astonishing from the standpoint that the New York Times was the paper to break the story on Hillary’s emails on March 2nd, 2015. It was also the New York Times that published ’2008 Crisis Deepened the Ties Between Clintons and Goldman Sachs’ explaining how Hillary came to help rescue their image. It was the New York Times that reported how Hillary kept changing her story on the emails. To simply ignore all of this as if it never happened leave one speechless at the political attempt to manipulate the public. This is what the New York Times actually wrote in their endorsement:
‘In any normal election year, we’d compare the two presidential candidates side by side on the issues. But this is not a normal election year. A comparison like that would be an empty exercise in a race where one candidate – our choice, Hillary Clinton – has a record of service and a raft of pragmatic ideas, and the other, Donald Trump, discloses nothing concrete about himself or his plans while promising the moon and offering the stars on layaway. (We will explain in a subsequent editorial why we believe Mr. Trump to be the worst nominee put forward by a major party in modern American history.)’

This post was published at Armstrong Economics on Sep 26, 2016.

Heidi Cruz Rejoins Goldman Sachs

While Goldman is best known for creating the revolving door, where it either soaks up SEC “regulators”, spawns countless central bankers, Treasury Secretaries like Hank Paulson (whose departure from the firm allowed him a tax free cash out on his vested GS equity), NJ governors and client fund comminglers like Jon Corzine, a new function was revealed today: providing sabbaticals for the spouses of presidential candidates. Case in point: Heidi Cruz, who left Goldman Sachs last year to help her husband Ted Cruz in his quest for the Republican presidential nomination, is returning to the bank in a newly created role in the Houston office.
According to Bloomberg which first reported the story, Cruz will focus on helping to win new clients, focusing on strategic relationships, and report to David Fox, head of private wealth management for the southwest region, according to a memo to staff on Friday.
Here is her latest bio:

This post was published at Zero Hedge on Sep 23, 2016.

Fed Seeks to Prohibit Companies from Merchant Banking to Promote Lending

The Federal Reserve wants to take away the ability of Goldman Sachs and other banks to invest in companies rather than acting as bankers and lending. The U. S. banking regulators are urging Congress to prohibit merchant banking where firms buy stakes in companies rather than lend them money. They are pushing for limits on Wall Street’s ownership of physical commodities after lawmakers accused Goldman Sachs and other banks of seizing unfair advantages in metal and energy markets in recent years.
Merchant banking has generally become the business of making private equity investments in non-financial firms, in particular, equity investments that have a venture capital character. Based upon a report on a multi-agency study of banks’ investment activities required by the Dodd-Frank Act, they highlighted ways to fix potential risks that regulators didn’t think were handled by the Volcker rule ban on certain trading and investments. However, Congress needs to pass legislation and they are subject to bribes that we call lobbying, which presents the greatest hurdle to actually changing anything. The Fed’s recommendations on merchant banking would end the ability to operate mines, warehouse metals, and engage in shipping oil.

This post was published at Armstrong Economics on Sep 22, 2016.

Top Goldman Sachs hire, Jose Manuel Barroso, sparks E.U. staff revolt

Conflict of interest? More than 130,000 people think so, and they’ve signed a petition started by E.U. staff in protest against the bank’s recruitment of the former president of the European Commission, Jose Manuel Barroso.
He was hired in July — after the Brexit vote — and will advise Goldman Sachs, among other things, on how to limit the damage from the U.K.’s withdrawal from the E.U.
The appointment has also drawn a warning from the official charged with investigating complaints into the behavior of E.U. institutions. Emily O’Reilly wrote to Barroso’s successor on Tuesday, saying the move had caused “widespread concerns.”
“This public unease will be exacerbated by the fact that Mr Barroso has publicly stated that he will be advising on the U.K.’s decision to leave the E.U.,” O’Reilly said.

This post was published at CNN Money

Clinton’s Pay-to-Play Is the Natural Consequence of Big Government

Hillary Clinton has been taking heat for her relationship with the Clinton Foundation. Did individuals and firms making large donations to the Foundation, or paying large speaking or consulting fees to Bill Clinton, get preferred access to Ms. Clinton as Secretary of State? Is there a revolving door between the Clinton campaign and the Foundation’s fundraising staff? Are these relationships the subject of the emails she deleted from her private server?
These questions point to a more basic issue about the role of money in politics. What, exactly, do large corporations get in exchange for their campaign contributions? Ms. Clinton gave 92 speeches between 2013 and 2015 that netted her $21.6 million, including $1.8 million for just 8 speeches to large banks. (CNN provides eye-opening details about her speaking requirements – the $225,000 fee is just the tip of the iceberg.) Ms. Clinton is hardly known for her business acumen; her infamous cattle-futures trades are widely recognized as a political payoff, and her views on corporate governance have been ridiculed by experts. Her opinions on world politics are already in the public domain, so I doubt that Goldman Sachs was getting $200K worth of unique insight into global affairs. Bill Clinton, with zero experience in higher-education administration, bagged $17 million to be honorary chancellor of an obscure for-profit university. Why are these companies throwing their money away?
Most people assume that campaign contributions, speaking and consulting fees and lucrative board positions for former and future politicians, and similar payments are pure graft, the kinds of pay-to-play arrangements common under crony capitalism. And some of these transfers surely do buy access and even specific policy outcomes. There are several problems with the common assumption, however. First, research on campaign contributions finds that the expected rate of return on these payments is quite high and yet, given the potential gains, the contribution amounts are remarkably small. Second, there is little systematic evidence that policies are, on average, greatly influenced by such contributions, leading some to suggest that this form of payment to politicians and political parties is mainly consumption, not investment.

This post was published at Ludwig von Mises Institute on August 26, 2016.

Trump is Goldman’s Golden Goose

The reporting of Susanne Craig of the New York Times and David Cay Johnston, who won a Pulitzer Prize for his reporting when he was with that paper, and has recently published The Making of Donald Trump, combine to allow us to draw a critical insight about Trump and Goldman Sachs. From Susanne Craig, we learn:
[A]n office building on Avenue of the Americas in Manhattan, of which Mr. Trump is part owner, carries a $950 million loan. Among the lenders: the Bank of China, one of the largest banks in a country that Mr. Trump has railed against as an economic foe of the United States, and Goldman Sachs, a financial institution he has said controls Hillary Clinton, the Democratic nominee, after it paid her $675,000 in speaking fees.
Goldman Sachs is infamous for two things, both of them relevant here. Its senior managers encourage the most incestuous of relationships between the government and the firm. The revolving door is an exclusive penthouse elevator that rockets Goldman executives back and forth from positions of immense power in government and the firm. As the then President of the Federal Reserve Bank of Kansas City (now, Deputy Chair of the FDIC) told a small group of us several years ago: ‘For the last 20 years we’ve been holding an auction to fill the position of U. S. Treasury Secretary – and of late Goldman Sachs has been winning.’
Second, Goldman is infamous for ripping off its clients. It is the place that structured deals like Abacus to deceive and rip off its customers. Matt Taibbi aptly dubbed them the Vampire Squid.

This post was published at Wall Street Examiner by William Black ‘ August 23, 2016.