President-elect Donald Trump announced on November 30 that former Goldman Sachs partner Steven Mnuchin — a man described as “the anti-populist from Hell” — is his pick for treasury secretary.
Critics say Mnuchin’s background — including running a bank described as “a foreclosure machine” — is further evidence that Trump has no intention of fulfilling his campaign promise to “drain the swamp” of corporate lobbyists.
“This isn't draining the swamp”, Democratic Senator Sherrod Brown said, “it’s stocking it with alligators.”
Indeed, the Wall Street Journal wrote that “Mnuchin’s Wall Street pedigree presents a stark contrast with the populist themes Mr. Trump struck in his campaign, railing against big banks and vowing to close tax loopholes that benefit hedge funds.”
The son of a Goldman Sachs partner, Mnuchin spent 17 years at the bank and also profited millions off the infamous Bernie Madoff scheme.
NPR reported: “In 2009, he put together a group of billionaire investors and bought a failed California-based bank, IndyMac. It had been taken over by the Federal Deposit Insurance Corp. after its sketchy mortgage loans went bad.”
Mnuchin and his partners bought IndyMac on the condition that the FDIC agree to pay future losses above a certain threshold. They renamed the bank OneWest Bank and, after running it for six years, they sold it last year for a profit, estimated at close to US$1.5 billion.
Kevin Stein of the California Reinvestment Coalition, a housing advocacy group, said that profit was made on the backs of suffering California homeowners. “In essence what they did is they bought a foreclosure machine,” he said.
According to the coalition, OneWest foreclosed on more than 36,000 homeowners under Mnuchin. During that time, the FDIC made payments to OneWest totalling more $1 billion. Those payments went to the “billionaire investors of OneWest Bank”, said Stein, “to cover the cost of foreclosing on working-class, everyday, American folks”.
David Dayen adds at New Republic: “Even among the many bad actors in the national foreclosure crisis, OneWest stood out.
“It routinely jumped to foreclosure rather than pursue options to keep borrowers in their homes; used fabricated and ‘robo-signed’ documents to secure the evictions; and had a particular talent for dispossessing the homes of senior citizens and people of color.”
Once the new administration takes the reins, one of the things Mnuchin told CNBC he would focus on will be slashing the corporate tax rate.
BBC notes that Mnuchin will be the third Goldman Sachs veteran to hold the top treasury post in recent years. He will follow in the footsteps of Robert Rubin, who served under Bill Clinton, and Henry Paulson who served under George W Bush.
Also on November 30, Trump announced that billionaire investor Wilbur Ross was his pick for Commerce secretary. Ross has been described as “the king of bankruptcy”.
[Abridged from Common Dreams.]