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August 23, 2017

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Wall Street back in favor with Donald Trump's cabinet picks

NEW YORK -- The nominations of Steven Mnuchin and Wilbur Ross to the Trump cabinet Wednesday positions Wall Street to exert renewed influence over the U.S. economy after retreating somewhat in the Obama years.

Mnuchin, 53, President-elect Donald Trump's pick to head the Treasury Department, spent 17 years at Goldman Sachs, where he worked on complex financial derivatives that were later at the heart of the 2008 financial crisis.

Wilbur Ross, 79, Trump's designee for secretary of Commerce, was nicknamed the "king of bankruptcy" for a record of profiting off of dying industries.

The picks drew quick praise in business circles, with Financial Services Roundtable chief executive Tim Pawlenty praising Mnuchin as a "seasoned and results-oriented leader."

A senior Wall Street banker praised as "thoughtful" Mnuchin's reservations about the Dodd-Frank banking regulations enacted after the 2008 crisis.

Business Roundtable President John Engler said, "President-elect Trump is putting together an economic team with an impressive record of business accomplishment, a deep understanding of the U.S. and global economy and a clear vision of how to help all Americans share in the nation's success."

But there also was plenty of criticism.

"We are witnessing the wholesale takeover of government by an extremist faction of the corporate class," said Robert Weissman, president of public policy group Public Citizen.

Drain the Swamp?

Senate Democrats signaled they intend tough scrutiny for Mnuchin, who led an investment group that bought failing California bank IndyMac for US$1.55 billion in 2009, then sold the renamed OneWest five years later for US$3.4 billion. Part of OneWest's earnings came from driving homeowners into foreclosure in order to collect loss-sharing payments from the government.

"Steve Mnuchin is the Forrest Gump of the financial crisis — he managed to participate in all the worst practices on Wall Street," said Democratic Senator Elizabeth Warren, who sits on the Senate Banking Committee, which will question Mnuchin in confirmation hearings early next year.

"His selection as Treasury Secretary should send shivers down the spine of every American who got hit hard by the financial crisis, and is the latest sign that Donald Trump has no intention of draining the swamp and every intention of running Washington to benefit himself and his rich buddies."

Senator Sherrod Brown, the top Democrat on the Senate Banking Committee was equally critical. "This isn't draining the swamp — it's stocking it with alligators."

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