Limitless by Jeanna Smialek

Author:Jeanna Smialek [Smialek, Jeanna]
Language: eng
Format: epub
Publisher: Knopf Doubleday Publishing Group
Published: 2023-02-27T00:00:00+00:00

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Mnuchin, who would remain the Fed’s key partner as it worked to cushion the fallout from the pandemic, had a lot riding on the new relief law. People involved in the negotiations—including those who disliked him immensely—were quick to acknowledge that without him the deal would never have come together at such a speed and size. The rescue was a chance to define his legacy.

Upon his arrival in Washington, Mnuchin had been painted mostly as a money-hungry financier. He had spent years at Goldman Sachs and in the hedge fund business, but it was his job during the financial crisis that drew the most attention. Mnuchin had in 2008 helped to buy California-based IndyMac, a bank and mortgage servicer that the government had taken over and was looking to unload, then moved to a mansion in Bel Air to run it.[9] IndyMac had loaded up on mortgage-backed securities, mortgages, and commercial loans that seemed to have hit rock bottom and, as the Fed unrolled rescue packages, seemed likely to have at least some upside. Together with a handful of other wealthy investors—John Paulson, George Soros, Michael Dell, and Chris Flowers—Mnuchin cobbled it and other struggling portfolios into a bank called OneWest. Mnuchin was an expert in the sorts of securities IndyMac held, having headed up the mortgage department at Goldman.[10]

The move, as with many of Mnuchin’s ventures, was a stunning success by any financial metric. The partners expanded the bank’s capital base, rebranded it through partnerships with the Los Angeles Lakers and Angels, and expanded its consumer lending. Whether OneWest was a winner from a societal standpoint proved more debatable. The bank foreclosed on mortgage holders who couldn’t pay, something that was common in those days of widespread delinquency, but which OneWest did particularly aggressively. In 2015, Mnuchin and his partners sold OneWest to CIT Group Inc. for $3.4 billion,[11] but for all the financial gain, the intensity with which OneWest had cracked down on nonperforming loans earned Mnuchin and the bank a reputation in Southern California that reverberated all the way to Washington.

When Mnuchin appeared on Capitol Hill for his Treasury secretary confirmation hearing in January 2017, his eyes alert below a receding jet-black hairline, he had explaining to do.

The hearing was wild. Mnuchin’s posse immediately underlined that he was not a typical creature of Washington: Louise Linton, then his fiancée, sat behind his right shoulder, her bangs perfectly sideswept, her lipstick slightly iridescent, diamond stud earrings glinting for the C-Span cameras. Aspirational movie starlets were not regulars at Senate Finance Committee hearings.[12] Foreshadowing the tone of the tenure that lay before him, Mnuchin used his opening statement to praise Donald Trump, recounting the first Trump rally he attended. The event in Indianapolis had been an “unforgettable experience” in which twenty thousand people had packed a stadium and cheered for the politician like he was a member of the Rolling Stones.

“I share the president-elect’s goal of economically empowering every citizen,” Mnuchin had said.

The Democratic politicians vetting Mnuchin for the job were not reassured.

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