Economy

Goldman Sachs, The Singular New York-To-Washington Path To Power

After bashing the investment bank during the campaign, why Donald Trump could not resist picking three top executives to run his economic policy.

Goldman Sachs, The Singular New York-To-Washington Path To Power
Dan Zak

NEW YORK — Goldman Sachs. The name feels like the bob of a yacht in Biarritz and tastes like the marbling of a Wagyu steak. It sounds like money being moved, invested, tripled, then moved again to avoid taxes and bubbles and crashes. Its headquarters on Lower Manhattan's West Street smells like wealth, from the handsomely kitted-out coffee station on the 11th floor down to the $5 million, 1,800-square-foot painting commissioned for its lobby.

Goldman Sachs. Again with Goldman Sachs! Always Goldman Sachs. An alien race could invade Earth, create an economy based on quasars and dark matter, and our new six-eyed overlord would still hire someone from Goldman Sachs.

The investment bank gave George W. Bush one of his treasury secretaries, and Bill Clinton one of his before that. It was the largest private donor to Barack Obama's 2008 campaign. Throughout 2016, Donald Trump hammered Hillary Clinton for giving paid, closed-door speeches to Goldman Sachs, and he spat its name like it was the embodiment of evil. Goldman Sachs has "total control" over Clinton, he charged again and again.

And now? Trump has plucked his treasury secretary from Goldman. Trump's senior adviser is a former Goldman guy. On Monday, Trump officially named his choice for director of the National Economic Council: the president of Goldman Sachs, Gary Cohn.

What gives? Why does this white-shoe investment firm always turn up, a tuxedoed stowaway, in the White House?

The Goldman mystique has been honed over 147 years, since the day a German immigrant named Marcus Goldman left the tailoring business to trade debts, via slips of paper he stacked under his silk top hat. Goldman's first office was a block from Wall Street, in a basement, by a coal chute.

Now it's a publicly traded behemoth with deep roots in Washington and branches reaching into economies all around the world.

"We've got Goldman Sachs people in every major market," Cohn said in an in-house podcast recorded Monday after his departure for Washington was announced. "You know, you look at the size of our capital, you look at the size of our balance sheet, you look at the size of our people - it's just enormous."

Goldman's omnipresence inspires anxiety in both regulators and conspiracy theorists. It makes it easy to imagine the type of rigged system that both Bernie Sanders and Donald Trump campaigned against.

"Next year, four of the 12 presidents at the regional Federal Reserve Banks will be former executives from one firm: Goldman Sachs," Sanders tweeted a year ago.

Goldman has been a dark punchline as far back as the 1930s, when vaudeville superstar Eddie Cantor - who lost a fortune in a Goldman shell game on the cusp of the Great Depression - worked the firm into his act.

"They told me to buy stock for my old age, and it worked perfectly - within six months, I felt like a very old man," Cantor joked onstage, according to Charles D. Ellis's Goldman history "The Partnership."

Cut to 2008, when Goldman made money off the economic collapse by shorting the housing market. The firm was charged with fraud in 2010.

"When you've had a financial calamity like we'd experienced in 2008, symbolism and symbols become very important - and Goldman is the perfect cultural touchstone of greed and avarice," says author and former Wall Street banker William D. Cohan, who wrote "Money and Power: How Goldman Sachs Came to Rule the World."

In 2012, internal Goldman emails were leaked that suggested its traders referred to clueless investors as "muppets," an unflattering bit of British slang. The comedy site Funny or Die retaliated with a skit featuring three irate "Sesame Street"-style Muppets who crash a meeting of conniving Goldman executives.

"Sure we advise them against their own best interests to make us richer, but does that make us bad guys?" asks the actor Kyle MacLachlan, playing a pinstriped executive.

"Yes!" says a Muppet.

Its occasionally dodgy reputation among the public, though, is outweighed by the deference it commands in circles of power. "That's why Trump is going to these Goldman people," Cohan says. "Because it's so easy to claim instant financial respectability by tapping into the Goldman network."

Price of exclusiviity

The network.The platinum Rolodex. Rich people who help powerful people get rich, and powerful people who make rich people powerful. It all stems from a culture of backbreaking work and breathtaking exclusivity, to which Goldman recruits are exposed as soon as they walk in the door.

"Those candidates who do not evince a scorching ambition, total commitment, and an inclination for teamwork are quickly weeded out," wrote former Goldman trader Lisa Endlich in her book "Goldman Sachs: The Culture of Success."

Everything - individuality, ego, feelings - is subordinate to the firm. "If you say "I," you are being abrasive," a veteran partner told Endlich. And yet: "The firm is special, and you are special or you would not be here," she quotes a former vice president as saying.

The legend of Goldman Sachs is such that business blogs chatter obsessively about what it's like to work there: Having a tan means you're not working hard enough . . . Only partners can wear Ferragamo loafers . . . Women are conditioned to avoid makeup and keep their hair pulled back.

"Partners were always looking to see whether an intern had the makings of a "culture carrier," Goldman-speak for someone who is able to deal with clients and colleagues in a way that preserves the firm's reputation - one that has made it an incubator for senators, treasury secretaries and central bank governors," wrote Greg Smith, a former executive director, in "Why I Left Goldman Sachs: A Wall Street Story."

The reason Trump is stocking his White House with Goldman Sachs is because it's tradition. And who started that tradition?

A 5-foot-4 clerk named Sidney Weinberg, who in 1909 lugged an eight-foot flagpole onto the New York subway.

Weinberg - "a dumb, uneducated kid from Brooklyn," he would later call himself - accompanied the pole from Wall Street to the 138th Street home of Paul Sachs, a partner in the firm who wanted it installed there. As the industrious clerk raised the American flag, Sachs told him he should go to night school and perhaps advance from a gopher to something grander.

A gifted networker, Weinberg rocketed up the Goldman ladder and made friends with New York Gov. Franklin D. Roosevelt. When his pal moved into the White House, Weinberg helped create the Business Advisory Council, a conduit for corporate execs to nudge and sway the policymakers in the capital.

As a Goldman partner, Weinberg helped ramp up private industry for the war effort during both World War II and the Korean War. He raised money for Dwight D. Eisenhower's campaign and then handpicked his treasury secretary - cementing the notion that our government had much to learn and gain from our financial titans.

"The people that know the industry better than anybody are the people who work in the industry."

That was Hillary Clinton, some 60 years later, at Goldman's headquarters in New York, where she reassured financial titans of this special relationship in one of those pricey speeches that would later give her such grief.

Goldman in mergers (RCA and GE). Goldman in acquisitions (one of the world's largest coffee-bean suppliers). Around 1900, Goldman imported and exported gold across the Atlantic. In the 1950s, it took the Ford Motor Co. public. It has recently invested in Spotify and Uber.

Showing heart

The firm has expanded its philanthropy in recent years to rehabilitate its image and is considered by some insiders to be one of the more ethical Wall Street firms. Goldman sees the number of top staffers it has sent to Washington as a feather in its cap.

"Throughout its 147-year history, Goldman Sachs has encouraged its employees to give back to the community while they are working here and after they leave," says Jake Siewert, the firm's communications director - and former top aide in the Clinton and Obama administrations, as it happens. "We are proud that many have gone on to serve their country and their communities after they have left."

Turn your gaze up the street from the White House: Weinberg's Business Advisory Council still exists after all these years, under a slightly different name, in a seventh-floor office on Pennsylvania Avenue. Current Goldman CEO Lloyd Blankfein is a member, along with other captains of industry and finance - including ExxonMobil CEO Rex Tillerson, Trump's nominee for secretary of state. (The council's outgoing chairman is Jeff Bezos, the found of Amazon and owner of The Washington Post.) In his first year in office, Obama invited the council to the East Room. Early next year, the council will meet in Washington for at least two off-the-record schmooze sessions with lawmakers. President Donald J. Trump will be at the top of the invitation list.

Despite favoring Clinton, Blankfein is optimistic about Trump.

"He's a very smart guy, a businessman," Blankfein told German newspaper Handelsbatt recently. If his policies "are more stimulative, our fortunes rise along with that."

Starting next year, Blankfein's former Goldman colleague, Steven Mnuchin, will be running the Treasury. Blankfein's current deputy, Cohn, will be Trump's economy whisperer. And once again, that Goldman Rolodex could come in handy.

"You think about, Who is Apple CEO Tim Cook going to call in this administration if he has a problem? I think his first thought would be Gary Cohn," says a former Treasury official who's familiar with Cohn's leadership style (and requested anonymity because he was not authorized to speak on the topic). "Who else on that Trump team could tell you: How's the Bank of Japan going to react to some announcement you're going to make? At this point, I think he's your only game in town."

In both towns, really. New York and Washington. Since Election Day, stock in Goldman Sachs is up more than 30%.

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Coronavirus

Where Lockdowns For LGBTQ Meant Moving Back In With Homophobic Relatives

The confinement experience could turn brutal for those forced to live with relatives who would not tolerate a member of the family living their sexual orientation openly as a young adult. Here are stories from urban and rural India.

At a Rainbow pride walk in Kolkata, India

Sreemanti Sengupta

Abhijith had been working as a radio jockey in the southern Indian city of Thiruvananthapuram when the COVID-19 pandemic hit in March, 2020. When the government imposed a nationwide lockdown, Abhijith returned to the rural Pathanamthitta district , where his parents live with an extended family, including uncles, cousins and grandparents.

Eighteen months later, he recalled that the experience was "unbearable" because he had to live with homophobic relatives. "Apart from the frequent reference to my sexual 'abnormality', they took me to a guruji to 'cure' me," Abhijith recalled. "He gave me something to eat, which made me throw up. The guru assured me that I was throwing up whatever 'demon' was possessing me and 'making' me gay."


Early in 2021, Abhijith travelled back to Thiruvananthapuram, where he found support from the members of the queer collective.

Inspired by their work, he also decided to work towards uplifting the queer community. "I wish no one else goes through the mental trauma I have endured," said Abhijit.

Abhijith's story of mental distress arising from family abuse turns out to be all too common among members of India's LGBTQ+ community, many of whom were trapped in their homes and removed from peer support groups during the pandemic.

Oppressive home situations

As India continues to reel from a pandemic that has claimed more lives (235,524) in three months of the second wave (April-June 2021) than in the one year before that (162,960 deaths in March 2020-March 2021), the LGBTQ community has faced myriad problems. Sexual minorities have historically suffered from mainstream prejudice and the pandemic has aggravated socio-economic inequalities, instigated family and institutionalized abuse, apart from limiting access to essential care. This has resulted in acute mental distress which has overwhelmed queer support infrastructure across the country.

Speaking to queer collective representatives across India, I learned that the heightened levels of distress in the community was due to longstanding factors that were triggered under lockdown conditions. Family members who are intolerant of marginalized sexual identities, often tagging their orientation as a "disorder" or "just a phase", have always featured among the main perpetrators of subtle and overt forms of violence towards queer, trans and homosexual people.

Calls from lesbians and trans men to prevent forced marriages during lockdowns.

Sappho For Equality, a Kolkata-based feminist organization that works for the rights of sexually marginalized women and trans men, recorded a similar trend. Early in the first wave, the organization realized that the existing helpline number was getting overwhelmed with distress calls. It added a second helpline number. The comparative figures indicate a 13-fold jump in numbers: from 290 calls in April 2019-March 20 to 3,940 calls in April 2020-May 2021.

"Most of the calls we have been getting from lesbians and trans men are urgent appeals to prevent forced marriages during lockdowns," said Shreosi, a Sappho member and peer support provider. "If they happen to resist, they are either evicted or forced to flee home. But where to house them? There aren't so many shelters, and ours is at full capacity."

Shreosi says that the nature of distress calls has also changed. "Earlier people would call in for long-term help, such as professional mental health support. But during the pandemic, it has changed to immediate requests to rescue from oppressive home situations. Often, they will speak in whispers so that the parents can't hear."

Lack of spaces

Like many of his fellow queer community members, life for Sumit P., a 30-year-old gay man from Mumbai, has taken a turn for the worse. The lockdown has led to the loss of safe spaces and prolonged residence at home.

"It has been a really difficult time since the beginning of the lockdown. I am suffering from a lot of mental stress since I cannot freely express myself at home. Even while making a call, I have to check my surroundings to see if anybody is there. If I try to go out, my family demands an explanation. I feel suffocated," he said.

The pandemic has forced some queer people to come out

Sumit is also dealing with a risk that has hit the community harder than others – unemployment and income shortage. He's opened a cafe with two other queer friends, which is now running into losses. For others, pandemic-induced job losses have forced queer persons from all over the country to return to their home states and move in with their families who've turned abusive during this long period of confinement.

Lockdowns force coming out

According to Kolkata-based physician, filmmaker and gay rights activist Tirthankar Guha Thakurata, the pandemic has forced some queer people to come out, succumbing to rising discomfort and pressure exerted by homophobic families.

"In most cases, family relations sour when a person reveals their identity. But many do not flee home. They find a breathing space or 'space out' in their workspaces. In the absence of these spaces, mental problems rose significantly," he said.

Not being able to express themselves freely in front of parents who are hostile, intolerant and often address transgender persons by their deadname or misgender them has created situations of severe distress, suicidal thoughts and self-harm.

Psychiatrist and queer feminist activist Ranjita Biswas (she/they) cites an incident. A gender-nonconforming person died under suspicious circumstances just days after leaving their peer group and going home to their birth parents. The final rites were performed with them dressed in bangles and a saree.

"When a member of our community asked their mother why she chose a saree for someone who had worn androgynous clothes all their life, she plainly said it was natural because after all, the deceased 'was her daughter,'" Biswas recalls.

The Indian queer mental health support infrastructure, already compromised with historical prejudice, is now struggling

David Talukdar/ZUMA

"Correctional" therapy

In India, queer people's access to professional mental healthcare has been "very limited," according to community members such as Ankan Biswas, India's first transgender lawyer who has been working with the Human Rights Law Network in West Bengal.

"A large majority of the psychiatrists still consider homosexuality as a disorder and practice 'correctional therapy'. It's only around the big cities that some queer-friendly psychiatrists can be found," Biswas said. "The pandemic has further widened the inequalities in access to mental health support for India's LGBTQ community."

Biswas is spending anxious days fielding an overwhelming amount of calls and rescue requests from queer members trapped in their homes, undergoing mental, verbal and even physical torture. "We don't have the space, I just tell them to wait and bear it a little longer," he said.

Medical care is dismal

Anuradha Krishnan's story, though not involving birth family, outlines how the lack of physical support spaces have affected India's queer population. Abandoned by her birth family when she came out to them as a trans woman in 2017, Anuradha Krishnan (she/they), founder of Queerythm in Kerala who is studying dentistry, had to move into an accommodation with four other persons.

Isolation triggered my depression

"I am used to talking and hanging around with friends. Isolation triggered my depression and I had to seek psychiatric help." Living in cramped quarters did not help with quarantine requirements and all of them tested positive during the first wave.

What is deeply worrying is that the Indian queer mental health support infrastructure, already compromised with historical prejudice, is now struggling, placing more and more pressure on queer collectives and peer support groups whose resources are wearing thin.

During the 10 months of the first wave of the pandemic in India in 2020, Y'all, a queer collective based in Manipur, received about 1,000 distress calls on their helpline number from LGBTQ+ individuals. In May 2021 alone, they received 450 such calls (including texts and WhatsApp messages) indicating a telling escalation in the number of queer people seeking help during the second wave.

As India's queer-friendly mental health support infrastructure continues to be tested, Y'all founder, Sadam Hanjabam, a gay man, says, "Honestly, we are struggling to handle such a large number of calls, it is so overwhelming. We are also dealing with our own anxieties. We are burning out."

Sreemanti Sengupta is a freelance writer, poet, and media studies lecturer based in Kolkata.

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