Biden Appoints Two BlackRock Alumni to Economic Team
Global Investment Chief Named NEC Chairman, Chief of Staff Nominated as Treasury Deputy Secretary
No Goldman Sachs Alumni, Frequent Source of Past Treasury Secretaries, Seen
[Asia Economy Reporter Naju-seok] At the U.S. White House, the era of Goldman Sachs is fading, and the era of BlackRock is dawning.
The Wall Street Journal (WSJ) reported on the 1st (local time) that BlackRock alumni have emerged as the new mainstream leading policy as they participate in the economic team of U.S. President-elect Joe Biden.
Wally Adeyemo, nominated as Deputy Secretary of the Treasury, and economist Brian Deese, who is expected to be appointed chairman of the White House National Economic Council (NEC) this week, are BlackRock alumni. Adeyemo previously served as Chief of Staff to Larry Fink, Chairman of BlackRock, and Deese was the Global Head of Investments at BlackRock.
Brian Deese, who is reportedly set to be appointed as the Chair of the White House National Economic Council (NEC) [Photo by Reuters]
This appointment is considered unusual given that investment bank (IB) Goldman Sachs personnel have traditionally been included in newly formed U.S. administration economic teams. In the Donald Trump administration, Steven Mnuchin, Secretary of the Treasury, and Gary Cohn, former White House NEC Chairman, were notable Goldman Sachs alumni. Robert Rubin, Treasury Secretary under Bill Clinton, and Henry Paulson, Treasury Secretary under George W. Bush, also served as executives at Goldman Sachs. The only exception was the Barack Obama administration, which tended to avoid appointing financial sector figures.
The main reason Biden chose BlackRock personnel is that their policy stance does not align with that of IBs. Since Biden pledged to actively address wealth taxation and climate change issues, it naturally distances itself from Goldman Sachs. Goldman Sachs has a strong image of representing the wealthy due to its leadership in corporate mergers and acquisitions (M&A) and trading activities generating massive profits. In contrast, BlackRock, while paying relatively high salaries on Wall Street, has a less arrogant image compared to other financial firms. Although BlackRock has been criticized for investing in companies contributing to climate change, this year it has taken a strict stance on this issue, drawing attention. Moira Birss, Climate and Finance Director at Amazon Watch, emphasized, "BlackRock personnel entering the Biden administration must prove they will actively respond to climate change and community protection." It is also pointed out that BlackRock’s enhanced status played a role. Having grown into the world’s largest asset management company managing $7.8 trillion in assets (as of last September), BlackRock also played an advisory role this year during the Federal Reserve’s large-scale bond purchases aimed at market stabilization.
Evaluations of appointing BlackRock alumni to key positions vary. Tyler Galachi, CEO of Healthy Market Association, said, "By appointing personnel related to large asset management firms, this administration can alleviate concerns of financial companies," adding, "The financial industry will have more room to maneuver, such as planning stable business strategies without bearing new regulatory or tax burdens." Milan Dalan, Managing Partner at Tiger Hill Partners, assessed, "Given the current crisis comparable to the Great Depression, it is not surprising that the Biden administration entrusted economic recovery to individuals experienced in both government and markets."
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