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BlackRock poised to replace Goldman Sachs inside the White House

BlackRock poised to replace Goldman Sachs inside the White House

Forget “Government Sachs” — it’s BlackRock that’s shaping up to be Wall Street’s new elephant inside the White House.

President-elect Joe Biden is raising eyebrows with chatter that he’s poised to name two executives from BlackRock — the asset-management colossus headed by billionaire Larry Fink, with more than $7 trillion in holdings — for top posts on his economic team.

Reports swirled over the weekend that Biden has settled on Brian Deese, a current BlackRock executive and former Obama adviser, to lead the National Economic Council. On Sunday, Biden’s transition team said it has chosen Adewale “Wally” Adeyemo, a former chief of staff to Fink at BlackRock who is currently president of the Obama Foundation, to be deputy to Treasury secretary nominee Janet Yellen.

Meanwhile, executives at Goldman Sachs — which over the years earned the moniker “Government Sachs” for the ranks of its top executives who have landed in the White House, including Gary Cohn and Steven Mnuchin in the Trump administration — have been conspicuously absent on Biden’s lists, insiders say.

“What Larry is doing is very smart, very him,” said one hedge fund manager familiar with Fink. “Goldman and other banks have sent their people into government, whereas Larry took these guys from the White House, worked with them, backed Biden, and now he’s putting them back into the White House.”

Despite his vocal endorsement of various liberal causes, the 68-year-old billionaire Fink and his fund have become preferred whipping posts for the left. BlackRock’s investments in private prisons and weapons manufacturers have made Fink a target for protestors who have ambushed him at conferences and demanded that he be removed from the boards of the Museum of Modern Art and the Whitney.

Still, Fink was one of the few Wall Street titans to publicly support Biden during the election, with some rumors circulating that he had his eye on Treasury or the National Economic Council role that Deese now looks poised to fill. Without joining the White House himself, having BlackRock alums in Biden’s ear could be helpful to Fink as the economy recovers from the coronavirus.

Deese, 42, is not a trained economist but he played a key role throughout the Obama administration working on everything from the auto bailout to the Paris Climate Agreement to Merrick Garland’s failed nomination to the Supreme Court. After Trump’s inauguration, Deese joined BlackRock as Global Head of Sustainable Investing. That role puts him in control of one of Fink’s pet projects: making climate change a key talking point for BlackRock.

“Larry is the new Goldman Sachs,” said one investment banker. “Deese is not necessarily a ‘BlackRock guy,’ but he works for Larry and now he advises the president.”

Larry Fink
Larry FinkREUTERS

For decades, banks like Goldman Sachs were the key focus of politicians and regulators, especially after the 2008 crisis. Having former Goldman execs in government roles talking to those regulators and pols was good business for both Goldman and the sector as a whole.

But as banks shift into a more utility-like future, non-banks like BlackRock that work in the more potent asset management and private-equity spheres will come under more scrutiny.

“The issue isn’t that the banks don’t understand what the rules are,” Federal Reserve Chair Jay Powell said in June 2019. “The issue is that the risk isn’t in the banks. It’s out in those market-based vehicles.”

Under Biden, Deese will take the role previously held by Goldman’s Cohn and currently held by longtime Wall Street insider Larry Kudlow, bringing his work at BlackRock into a senior advisory role.

Adeyemo, a 39-year-old Kenyan-born lawyer, was also a big player in the Obama Administration, working in the Treasury Department and the White House where he rose to a deputy director role on the NEC. Like Deese, he joined BlackRock after Obama left office in 2017, and took a geopolitical advisory role and served as Fink’s interim chief of staff.

“Hedge fund and private-equity guys were always going to be part of future White Houses,” said the hedge fund manager. “To be honest, I’m glad it’s BlackRock and not people who have no idea what they’re doing.”

About the author

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Erin Fox

From television to the internet platform, Erin switched her journey in digital media with News Brig. She served as a journalist for popular news channels and currently contributes his experience for News Brig by writing about the tech domain.

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