What’s with the revolving door policy between Goldman Sachs and the White House?
First, Goldman chairman Henry Paulson was appointed to take the reigns from departing Treasury Secretary John Snow. Now US Deputy Secretary of State Robert Zoellick, a leading architect of Washington’s China policy, has announced a move in the opposite direction, planning to return to the firm where he worked as a senior international adviser in the 1990s. He will serve as managing director and vice chairman for international strategy, as well as chairman of the firm’s "international advisors".
The swap continues a long history of Goldman tie-ups with US government. Zoellick’s international advisers group includes former US House Speaker Thomas Foley. In the other direction, White House Chief of Staff Joshua Bolten is a former Goldman executive, while former Treasury Secretary Robert Rubin is a former partner with the firm. New Jersey Governor Jon Corzine was previously co-head of the company with Paulson until he got the heave following a power struggle.
Goldman has also done a good job of cementing its ties with Beijing, making its presence felt in government and business circles as it jockeys for position and influence in China’s rapidly opening financial sector.
Paulson himself has visited the country dozens of times in the last few years to meet with government and industry leaders. Seen as a big loss to Goldman at the time, his appointment has been widely viewed as an attempt by the White House to leverage the investment bank’s China cred to get a grip on its troublesome trade partner.
With one of its leading China point men gone, Zoellick’s arrival is timely for Goldman. As the US trade representative in 2001, Zoellick completed negotiations to bring Beijing and Taipei into the World Trade Organization. At the State Department Zoellick led negotiations and strategic discussions with the Beijing government.
With the relationship decidedly rocky, Zoellick may not be flavor of the month, but his White House clout will not go unnoticed in Beijing. For Goldman, Zoellick’s appointment is a major coup as it continues its march into China’s financial heart.
Makes you wonder whether the appointment was signed, sealed and waiting for delivery before Paulson agreed to jump ship. It also makes you wonder whether he has really jumped ship, or whether he is just hanging out in the Gold House, a foot firmly ensconced in both camps.