On Wednesday morning, President-elect Donald Trump announced that he will nominate Steven Mnuchin for secretary of the Treasury, delivering another top job in the administration-in-waiting to someone whose main qualification is personal loyalty to Donald Trump.
Mnuchin is a banker and hedge fund guy who’s worked for Goldman Sachs and has zero experience in politics or policy. His views on the issues are a total and complete mystery, and indeed his very appointment seems to cut against much of Trump’s rhetoric on the campaign trail.
But Mnuchin is very clearly getting this job for one reason and one reason only — because he agreed to serve as the Trump campaign’s chief fundraiser in May and helped him raise a boatload of cash. There's no reason apart from this to nominate him rather than literally any other banker or economic policy professional in the country.
Steve Mnuchin is a rich banker with basically no known views on public policy
Back in August, Bloomberg Businessweek’s Max Abelson and Zachary Mider had a great profile of Mnuchin. They recount that Mnuchin, whose father was a Yale-educated Goldman Sachs trader, attended Yale and went to Goldman Sachs, where he worked from the mid-1980s to the early 2000s.
After Mnuchin left the bank, he worked at hedge funds (including one owned by George Soros, bête noire of the right), then started his own hedge fund (getting money from Soros for it), bought a DreamWorks film library (with Soros), and bought the failing IndyMac bank (with Soros and others) during the financial crisis. The rebranded OneWest bank has gotten serious criticism for being overly quick to foreclose on homeowners through dubious means, but Mnuchin and his partners sold it at a large profit several years later. Oh, and Mnuchin was a producer of Mad Max: Fury Road.
Except for the Mad Max part, this is a résumé seemingly tailor-made to make a mockery of Trump’s campaign fulminations against “globalists” and “bankers.”
But apparently none of that matters, because Mnuchin has one very important qualification: He helped Donald Trump’s presidential campaign raise a lot of money.
On May 5, 2016, as the primaries were drawing to a close, Trump shocked Wall Street by announcing that Mnuchin would join his campaign as national finance chair. “I was there at the beginning when he decided to run for president, and I’ve been a supporter and quiet adviser behind the scenes to him,” Mnuchin told Andrew Ross Sorkin a few days later. He proceeded to help Trump raise millions of dollars during the general election.
What are Mnuchin’s views on economic policy? Well, that’s essentially a mystery. He has no experience at all in public policy or governance and no apparent public views on issues. I guess we can venture a guess that he probably agrees with many other rich bankers that taxes on rich people should be lower and that at least some regulations on the finance industry should be struck down. But who knows! Maybe his Senate confirmation hearings will shed some light on the matter.
But if you're wondering why Mnuchin backed Trump in the first place? He was kinda admirably straightforward about that to the Businessweek reporters. “Nobody’s going to be like, ‘Well, why did he do this?’ if I end up in the administration,” he said. Indeed.
Mnuchin’s appointment signals that Trump likes loyalty, and that his administration will be pro–Wall Street
So far, there are two big takeaways from Mnuchin’s appointment. First, as stated, it’s a new case where the president-elect has handed a plum job to someone who got on the Trump train early.
Now, the Trump administration-in-waiting has shown some encouraging improvement on this front of late, handing out jobs to conservatives like Betsy DeVos and Tom Price, neither of whom supported Trump early, as well as Nikki Haley, who vocally criticized him during the primaries. And retired Gen. James Mattis — no Trump crony — seems to be the frontrunner for Secretary of Defense.
Still, Mnuchin joins incoming White House chief strategist Steve Bannon, national security adviser Michael Flynn, and attorney general nominee Jeff Sessions — all of whom distinguished themselves with their relatively early support of Trump and consistent loyalty to him — in getting key posts. Since these people aren’t united by any ideology or policy preferences, but are instead essentially a motley crew that’s been hanging around Trump and his campaign for the past few months, their selection sends a strong signal that a Trump administration will place a very high premium on loyalty rather than, necessarily, ideology or competence.
But secondly, though we don’t know what Mnuchin thinks about very many issues (the Businessweek authors write that when asked about Dodd-Frank, “he says there are good and bad things about it, without elaborating”), we’re probably on firm ground taking this as the latest of a great many signs that the Trump administration will be far, far more favorable to Wall Street than Trump’s campaign rhetoric may have led some voters to believe.
As Matt Yglesias has repeatedly pointed out, Trump’s occasional tough-on-banks rhetoric masked “an actual policy agenda” that is “incredibly favorable to bankers,” including less regulation of the financial sector and tax cuts on income derived from partnerships organized as S corporations (like many hedge funds, private equity firms, and venture capital firms are).
Already, according to Politico’s Ben White, Wall Street bankers were positively overjoyed with how the new administration appears to be shaping up for them. “There is a joke going around here that if I’d have known how good Trump was going to be for Wall Street, I’d have campaigned for him,” an anonymous Goldman Sachs executive told White. “People thought it might be 10 or 15 years until regulators stopped demanding heads and now all of a sudden you can envision it happening overnight.”
Now Mnuchin — one of their own — has been designated Trump’s Treasury secretary. And while we have little information about how skillful he’d be at running the Treasury Department bureaucracy, the information we do have suggests he’s hardly an edgy outsider ready to shake things up.