As a candidate, Donald Trump lumped Wall Street in with Washington as part of a “corrupt” system he pledged to fight against on behalf of everyday Americans. But as president, he has plucked Wall Street executives for top administration jobs and launched a rollback of regulations considered onerous by the industry.
Now Democrats are trying to seize on the contradiction in hopes of winning back working-class voters whose allegiance to Trump caught the party flat-footed in last year’s elections.
“It is one of Democrats’ highest priorities to hold President Trump and these Wall Street insiders accountable for their efforts to reinstate economic policies that benefited billionaires at the expense of working Americans,” said Adrienne Watson, national press secretary for the Democratic National Committee.
A fresh salvo from a group that grew out of the presidential campaign of Sen. Bernie Sanders (I-Vt.) features a new website that proclaims, “Trump has nominated enough Wall Street executives to field an entire baseball team.”
Visitors to the site can click on the “players” from the Trump administration, arrayed on a baseball field, to see individual biographies.
“It is completely hypocritical to promise to look after working-class people and then give the keys of the kingdom to this crowd,” said Jeff Weaver, who managed Sanders’s campaign and now serves as president of Our Revolution, the spinoff group.
That argument has become central to Democratic messaging as the party tries to regroup ahead of the 2018 and 2020 elections.
It has already been aired in battles against Trump Cabinet nominees, including former Goldman Sachs partner Steve Mnuchin, who was sworn in as Trump’s treasury secretary last week. Democratic operatives are plotting how to make Republican congressional candidates on the ballot next year answer for the their party’s embrace of pro-Wall Street nominees and policies.
“I think there’s a lot of room in swing districts for people to be disappointed not only with Donald Trump but the House Republicans who allowed him to rise to power,” said Meredith Kelly, a spokeswoman for the Democratic Congressional Campaign Committee, referring to working-class voters who sided with Trump in November.
Trump boosters say the argument is not likely to resonate with the people who elected him.
“No one in Youngstown, Ohio, cares whether the economic policy director is from Goldman Sachs or First National Bank in their home town,” said Barry Bennett, a Republican operative who advised Trump during the general election. “All they want is jobs.”
Republican strategist Doug Heye said that voters’ views of Trump will be shaped far more by how the economy performs during his tenure than by the résumés of his appointees.
Trump is filling a slate of high-profile jobs with Goldman alumni. Besides Mnuchin, Goldman managing director Jim Donovan is under strong consideration to fill the No.2 position at the Treasury Department. Jay Clayton, a Wall Street lawyer who has represented Goldman Sachs for years, has been nominated to head the Securities and Exchange Commission.
Stephen K. Bannon, Trump’s chief political strategist in the White House, is also a Goldman alumnus, as is White House economic strategist Dina Powell. Gary Cohn, a former Goldman president, now heads the National Economic Council and has growing clout inside the administration on a range of issues.
Others on the Our Revolution list of “Wall Street lackeys” include Wilbur Ross, the owner of a private-equity firm who is now commerce secretary, and David Malpass, a former chief economist at Bear Stearns who is now a treasury undersecretary.
Trump has taken several policy steps that have been applauded on Wall Street, which has dusted off its wish list after Trump promised to “dismantle” financial regulations put in place after the Great Recession to rein in the financial sector.
Spearheading that effort will be Mnuchin, who spent 17 years at Goldman Sachs before starting his own hedge fund, and Cohn, who stepped down as Goldman’s president in December.
The Trump administration’s effort to weaken the Dodd-Frank Act, the financial-industry overhaul passed in 2010, opens the door for sweeping changes to the way banks — big and small — are regulated and could save the industry billions.
Former congressman Barney Frank (D-Mass.), one of the authors of Dodd-Frank, noted that Trump had run television advertisements against Democratic nominee Hillary Clinton accusing her of being close to Goldman Sachs. “Now he has the number two guy at Goldman Sachs standing by him to undo the regulation,” Frank said.
“We have a contest: In which area is Donald Trump doing more to betray his promises to working people — taxation or financial reform?” Frank asked.
Dodd-Frank has had a profound effect on the financial industry, forcing banks to submit to yearly “stress tests” to prove they can withstand economic turbulence and draw up “living wills” that lay out how the banks could be dismantled without harming the rest of the financial system.
One controversial component, called the Volcker rule, bars banks from trading in high-risk securities using their own capital. Some Republicans have proposed getting rid of that rule, a potential boost for investment banks such as Goldman Sachs.
Ahead of expected regulatory rollbacks that could boost the bank’s bottom line, Goldman Sachs stock has risen more than 30 percent since the election. At about $248 a share, Goldman’s stock is now trading at its highest levels since the financial crisis began in 2007.
Surrounded by more than a dozen chief executives earlier this month, Trump justified rolling back Dodd-Frank by pointing to his friends.
“Frankly, I have so many people, friends of mine, that had nice businesses,” Trump said. “They just can’t borrow money . . . because the banks just won’t let them borrow because of the rules and regulations in Dodd-Frank.”
Then he noted the presence of Jamie Dimon, the chief executive of JPMorgan Chase, one of the largest banks in the world. “There is nobody better to tell me about Dodd-Frank than Jamie,” Trump said, motioning to Dimon across the table.
Some of the Senate’s more liberal members have already tried to exploit the ties between Goldman Sachs and the new administration.
In a letter this month to Lloyd Blankfein, the bank’s chief executive, Sens. Elizabeth Warren (D-Mass.) and Tammy Baldwin (D-Wis.) said an executive order issued by Trump starting a rollback of Dodd-Frank raised their concerns “about the degree to which Mr. Cohn’s advice to President Trump is good for Wall Street, but bad for Americans.”
The senators requested all communications related to Trump’s executive order between the company and other Goldman alums serving in the Trump administration, including Mnuchin and Bannon.
Goldman Sachs said in a statement, “We’ve had no involvement in the drafting of any executive orders.”
Wall Street executives, meanwhile, recognize there is risk in being seen as too cozy with Trump.
While anxious for a softening of regulations that those in the industry argue went too far, bank executives have been wary of efforts to dismantle Dodd-Frank altogether.
Protesters have already become a frequent presence outside Goldman Sachs headquarters — where they chant “Government Sachs” — and have repeatedly been removed from the company’s lobby. A massive dismantling of the rules could spark a broader backlash that the industry would rather avoid.
A coming flash point will be a Republican push to have Trump fire Richard Cordray, the head of the Consumer Financial Protection Bureau. The CFPB, which was established under Dodd-Frank, has crafted hundreds of new rules for mortgage lenders, banks and credit-card companies. Banks have complained the agency’s efforts have gone too far.
The agency is beloved by Democrats, particularly Warren, who helped set up the agency and is prepared to fight any efforts to scale back its powers.
Adam Green, co-founder of the Progressive Change Campaign Committee, said Democrats should be looking for fights to pick with Trump.
“We need to call out Trump’s hypocrisy and pick strong economic populist fights in order to win working-class voters in 2018 and 2020,” Green said. “Working-class voters who supported Trump were not voting for Wall Street executives and CEOs of international corporations to run the economy.”
Correction: An earlier version of this report misspelled Dina Powell’s name.