TOPICS > Politics

After populist campaign, Trump assembles economic team of elites

November 30, 2016 at 6:40 PM EST
President-elect Donald Trump’s proposed economic team suggests a preference for Wall Street veterans, in a reversal of his campaign promise to surround himself with establishment outsiders. Judy Woodruff speaks with David Wessel of The Brookings Institution about the “elite” appointments, the controversial Goldman Sachs background of Steven Mnuchin and why Wilbur Ross carries so much influence.
LISTENSEE PODCASTS

JUDY WOODRUFF: Well, as we’ve been reporting, the president-elect began fleshing out his economic team today by announcing his choices to run the Departments of Treasury and Commerce.

In doing so, the candidate, who campaigned with a heavy dose of populism, elevated individuals mainly known for their connections to Wall Street and high finance.

David Wessel of the Brookings Institution and a contributing columnist to The Wall Street Journal joins me now.

And welcome back to the program.

DAVID WESSEL, The Brookings Institution: Thank you.

JUDY WOODRUFF: So, David, fill out this picture a little bit more of who — let’s start with Steve Mnuchin. He’s the pick to head the Treasury Department. What more do we know about him?

DAVID WESSEL: Well, it’s just wonderfully ironic that Donald Trump, who railed against the elite, lambasted Hillary Clinton for giving paid speeches to Goldman Sachs, turned to a guy who not only was at Goldman Sachs for 17 years, but is the son of a Goldman Sachs lifer and has a brother who is at Goldman Sachs.

And so he’s going — he went to Yale. Wilbur Ross went to Yale. It seems to be a very anti-populist kind of move to pick these rich financiers for these jobs.

(CROSSTALK)

JUDY WOODRUFF: Excuse me.

So, we’re seeing some comments from liberal Democrats today who put out statements saying this is somebody who made a lot of money at Goldman Sachs when the banks were bailed out by the federal government, and then he went on and there was another — he left Goldman, went on and bought a bank, was involved in buying a bank in California. Tell us about that.

DAVID WESSEL: Right.

As you know, some of the Democrats, Elizabeth Warren and Bernie Sanders, think anybody who has ever worked for a bank shouldn’t be the treasury secretary. I think other people feel — I’m among them — that really having some experience on Wall Street might be a good thing for a treasury secretary.

I think the reason Mr. Mnuchin is controversial is not only that he comes from Goldman Sachs, which is kind of the — has been the centerpiece of a lot of criticism, but he made a lot of money buying IndyMac when it was in trouble.

JUDY WOODRUFF: This is the bank in California.

DAVID WESSEL: The bank in California.

And then selling it, making a bundle. And in between, he got a lot of grief because the bank was accused by consumer groups of being very aggressive on foreclosures. So it looks like he is a guy who profited off of the financial crisis that caused so much harm elsewhere.

JUDY WOODRUFF: Is that clear that he did profit off the financial crisis?

DAVID WESSEL: No. But he profited because he bought a bank that was in trouble cheap, fixed it up and sold it.

So, to that extent, he did make money off of the financial crisis. But he didn’t — he comes from the mortgage business, but he was not at Goldman during the worst of the abuses.

JUDY WOODRUFF: So in terms of the accusation that he was aggressively pushing foreclosures?

DAVID WESSEL: I don’t know enough about the detail. He’s accused of that.

There were a lot of protests. Clearly, the bank foreclosed on a lot of people. Lots of banks did that. Whether he did more than other people or his bank did more than other people, I really don’t know.

JUDY WOODRUFF: All right.

Well, let’s talk about the Commerce Department.

DAVID WESSEL: Right.

JUDY WOODRUFF: Wilbur Ross is the pick to be secretary of commerce.

DAVID WESSEL: Right.

So, I think Commerce is interesting, but much less important than Treasury in general. What makes Wilbur Ross so important is that he was close to President Trump for the whole campaign. Steve Mnuchin joined relatively late in the campaign, only six months before the election, raised a lot of money, kind of bought a lottery ticket by betting on Donald Trump, and won.

Wilbur Ross has been very influential in talking about Donald Trump and to Donald Trump and seems to have strong feelings, as does Donald Trump, about trade. And the Commerce Department does have some responsibilities for trade and tariffs, which Donald Trump has threatened to raise if our trading partners don’t play ball.

JUDY WOODRUFF: So, Wilbur Ross, a billionaire, made his money how?

DAVID WESSEL: Correct.

By buying companies that were in bad shape, fixing them up, laying off workers, and selling them and making money, some of it overseas, and some of it here. He’s made a lot of money doing business in China, which is kind of ironic, since the Trump people seem to look at China as the enemy now.

JUDY WOODRUFF: And, as you say, talking about trade.

Now, number two at Commerce, Donald Trump named Todd Ricketts, co-owner of the Chicago Cubs.

(CROSSTALK)

DAVID WESSEL: Right.

Yes. So, I guess that means that Donald Trump will get good seats at Wrigley Field. So, at least he comes from the Middle West. He doesn’t come from New York. He didn’t go to Yale or Harvard. He went to Loyola.

His family money comes from Ameritrade and the finance business. He actually owns a high-end bike shop. And what is interesting about them, as I think you said earlier, is his family was very much against Donald Trump, and then jumped on the bandwagon and got in it.

So, these are all card-carrying capitalists. They’re from the elite of the American business community. They’re not who you would have expected a populist, run-against-the-elites president to appoint.

On the other hand, they do have some experience. And having somebody who knows something about business and finance in these jobs can be a plus.

JUDY WOODRUFF: So, finally, David Wessel, I want to ask you about this deal that president-elect Trump talked about today with the Carrier Corporation. This is the air conditioning-making company, subsidiary of United Technologies.

They were saying — they announced months ago they were going to ship, what, 2,100 jobs out of United States to Mexico from Indiana.

DAVID WESSEL: Twenty-one hundred jobs from Indiana.

JUDY WOODRUFF: Donald Trump immediately during the campaign said: I’m going to do something about this.

DAVID WESSEL: Right.

So, Donald Trump clearly leaned on them. Carrier, like any company that has a consumer brand — and this one is owned by United Technologies, which has a lot of defense contracts — didn’t want to be crosswise with the new president of the United States.

It’s the state of Indiana, Mike Pence, still the governor, the vice president-elect, clearly put some money on the table. We don’t know what the deal was. They saved 1,000 jobs.

Ironically, in Indianapolis, there’s another company that you have never heard of called Rexnord, which makes ball bearings. They’re moving a plant to Mexico. They are laying off 300 people. And Donald Trump doesn’t seem to be able to save their jobs.

I think it’s hugely symbolically significant. He manages to say to his constituents: I did something, I accomplished something.

And I think it puts the business community on warning that this is not a conventional Republican. He is going to try to muscle companies that haven’t been muscled before.

JUDY WOODRUFF: Can he go individually from company to company that is thinking of shipping jobs out and say…

DAVID WESSEL: We create 180,000 jobs a month. We have something like 12 million people in manufacturing. This is a drop in the bucket.

I think the question — no, he can’t do that. You’re not going to — every company is going to threaten to move to Mexico, and he is going to put money on the table to keep them? No.

But I think it puts business on notice that this president is willing to use the bully pulpit to embarrass them. And, secondly, it suggests that he and some of his advisers may be more willing to restrict the freedom of companies to close plants and move than has been the case in the previous Democratic and Republican administrations.

JUDY WOODRUFF: David Wessel with the Brookings Institution, columnist with The Wall Street Journal, we thank you.

DAVID WESSEL: You’re welcome.

SHARE VIA TEXT