William D. Cohan is the author of Money and Power: How Goldman Sachs Came to Rule the World (2011).

It’s amazing how quickly Wall Street bends toward the arc of power in Washington. When Bill Ackman, the billionaire hedge-fund manager, woke up on Wednesday morning, he was “extremely bullish” on Donald Trump, adding: “Believe it or not.” Yes, that was more than just a little hard to believe, considering Ackman had never uttered a peep of support for Trump during the campaign and the new President-elect has long advocated eliminating the so-called “carried interest” benefit that allows hedge-fund managers, private-equity moguls, and other partnerships, to pay taxes at a lower rate than most other Americans.

But now Ackman was in the tank for Trump. “My thinking is as follows,” Ackman said at a New York Times conference on Thursday afternoon. “The United States is the greatest business in the world and it's been unmanaged for a very long period of time. We now have a businessman as the president and he has power because Republicans control Congress. He's going to launch a major infrastructure program. He's going to take corporate taxes down to a sensible level and get rid of loopholes. He's going to get a lot done and nothing has gotten done in a very long period of time. And if you are an activist investor, you want someone to come in, take over and get things that need to get done, done.”


It turns out that Ackman is not alone on Wall Street in suddenly being able to see Trump’s virtues. Consider the extraordinary rally of the Dow Jones Industrial Average to nearly 19,000, an all-time high, after stock futures took an initial panicky dip when the shocking election results became known early Wednesday morning. Speaking at the same Times conference, Lloyd Blankfein, the Chairman and CEO of Goldman Sachs and an outspoken supporter of Hillary Clinton—his firm paid her $675,000 for three appearances in 2013—also found some Trump religion, despite being featured in an anti-global establishment advertisement that Trump ran a few days before the election (one that some commentators suggested was anti-Semitic).

Blankfein said that Trump’s proposed economic policies are “very asset and market-friendly” and that the stock market had figured that fact out very quickly by the time it opened on Wednesday morning after “the jarring prospect” of a Trump presidency had driven futures down some 900 points as it was becoming increasingly clear that Trump would win. In fact, after languishing for years in the aftermath of the financial crisis, Wall Street bank stocks have been on a tear since Trump’s election: JPMorganChase is trading at an all-time high and Goldman Sachs and Morgan Stanley are trading at their 52-week highs. (Blankfein’s Goldman stock has increased by about $70 million since November 8.)

What is going on here? Why has Wall Street suddenly become so enamored of president-elect Donald Trump, a man it has loathed for decades, someone who has cost it billions of dollars as one company he controlled after another tumbled into bankruptcy, and whom Wall Street stopped doing business with years ago? Well, one reason is that the stock in trade of Wall Street traders and investors is to adjust to new realities faster than anyone else: That’s how you make money.

And now Wall Street, which has been persona non grata in Washington since the 2008 crash, is back stalking the halls of power. Trump has just named Steve Bannon, a former Goldman Sachs banker, as his chief strategist, and is said to be considering another Goldman alumnus, Steve Mnuchin, as Treasury Secretary. Rebekah Mercer, the daughter of billionaire hedge-funder Robert Mercer, is on Trump’s 16-member transition team executive committee, as is Anthony Scaramucci, another hedge-fund manager and a former Goldman Sachs banker who has been an outspoken Trump supporter since Trump vanquished Scott Walker and Jeb Bush during the Republican primaries.

Still another factor—and perhaps the most important—is that a good look at Trump’s policies reveals that they may help far more than they hurt the financial sector, and that’s a relief after eight years of flagellation from Washington and mainstream America.

Indeed, when you step back and examine what Trump actually proposed on the few occasions he specified what he might do if he won, it’s clear that Blankfein and Ackman are right: Most of Trump’s proposals are Wall Street-friendly. Cutting corporate and personal income taxes? Check. Spending $1 trillion on infrastructure? Check. Repatriating trillions of dollars more in corporate profits tucked away overseas? Check. Putting more Americans back to work? Check. Reforming Obamacare, which Wall Street sees as having hurt business? Check. Reducing burdensome regulations? Check. Rewriting the tax code? Check. Potentially repealing the 2010 Dodd-Frank law and the burdensome Volcker Rule embedded in it? Check, check and triple-check. “If you look at the totality of the positions he’s staked out—spending on infrastructure, more fiscal spending even in excess of what Hillary Clinton would do, and lower taxes, potentially lighter regulation—that’s a potent combination,” Blankfein said.

Still, some observers of the Street are plainly shocked at the seemingly fickle views of big players like Ackman and Blankfein. “I’m almost on the floor hearing you say this,” said Andrew Ross Sorkin, the Times’ columnist interviewing Ackman at last week’s conference, “Only because I think the last time I talked with you, you were supporting Hillary Clinton.” Not true, Ackman replied, he had not supported Clinton. Rather, he said, he had tried unsuccessfully to convince his fellow billionaire Mike Bloomberg, the former Mayor of New York, to run for president this cycle. He found Bloomberg to be more to his liking on social issues and on the potential Supreme Court appointees. “I've said for years that if we could actually have a businessperson run the country, that would be a wonderful thing for America,” Ackman continued. He then mentioned that he had “one of the greatest meetings of all time” with Trump some 20 years earlier when he was a “big shareholder” in Rockefeller Center and Trump had “an idea” about “how they could work on it together” but it did not come to fruition. “I’ll never forget that one,” he said.

Sorkin was still flummoxed by Ackman’s volte-face. Could he just unpack his thinking a bit more? “My concern about Donald Trump was volatility,” he said. “My concern was, ‘Who knows what he's going to do?’ Right? And then I woke up and I said, ‘You know what? This guy just became president of the United States. This is going to be his legacy. Does he want to screw it up? No, he wants to be the greatest president the country's ever had.’ And I remember when I was a kid, Ronald Reagan getting elected and people said the guy was a clown, was an actor, he didn't know anything. And we look back and people think Ronald Reagan is one of the greatest presidents we've had.”

Trump, he continued, “is a guy who knows how to build things, get them done on time and on budget. And by the way, that skill is very useful when you're going to spend a trillion dollars on fixing the infrastructure of the country. The American people are very wise and the American people voted not only to put Donald Trump in the presidential seat, but [also] to keep the control of the Congress and the Senate in the hands of Republicans, which means the President can be effective. We've not had that opportunity in a very, very long period of time, and I think that's very bullish for growth and a lot of things that should have happened haven't happened for many years.”

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In truth, Wall Street’s full-on embrace of the president-elect is less surprising than you might think. Regardless of whom it may have preferred as president, Wall Street and Washington have long had a symbiotic relationship going back to the 1780s, when the actual Wall Street, in lower Manhattan, was at the center of the nation’s political and financial power. They really have no choice but to get along, despite the rhetoric.

Of course, not everything Trump has proposed appeals to Wall Street. He has said he will seek to block AT&T’s $85 billion acquisition of TimeWarner, the parent company of CNN, a cable channel he often claimed was biased against him. “As an example of the power structure I'm fighting,” he said at an October rally in Pennsylvania, “AT&T is buying Time Warner and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of too few.” (In contrast to much of the market on Wednesday, TimeWarner’s stock fell nearly 5 percent on investor fears that Trump would, in fact, block the merger, although the chief financial officer of AT&T said he looked forward to working with Trump. “His policies and his discussions about infrastructure investment, economic development and American innovation all fit right in with AT&T's goals,” he said.) Wall Street doesn’t like the idea that a president might squelch merger and acquisition activity, one of the industry’s most enduring and profitable businesses.

Wall Street also doesn’t like the idea that Trump might seek to bring back Glass-Steagall, the Depression-era law that required the separation of investment banking from commercial banking. The law was repealed in 1999, during the waning days of the Clinton Administration. It’s not just idle chatter, either. Bringing back Glass-Steagall also has had a modicum of bi-partisan support on Capitol Hill, with the likes of both Senators John McCain and Elizabeth Warren sponsoring a bill, the 21st Century Glass-Steagall Act, that Warren introduced into in the last Congress. (It went nowhere.) Wall Street doesn’t like being told by Washington what businesses it can or can’t be in; it wants to be able to make those decisions itself. Furthermore, as Blankfein noted, that “omelet has been made” because “universal banks now do everything and that’s the way the market’s evolved in the last 25 years.” He said he doesn’t think “it’s realistic” to believe that Glass-Steagall will actually return, despite what Trump and others have said.

Then there is Trump’s promise to eliminate the “carried interest” tax loophole that allows hedge-fund managers and private-equity executives, among others, to count large swaths of their earnings as capital gains—taxed at 23.8 percent—rather than as ordinary income, which is taxed at 39.6 percent. That long-standing benefit, from which Trump the erstwhile real-estate developer has also benefited, has helped make most such asset managers fabulously wealthy. “The rich will pay their fair share, but no one will pay so much that it destroys jobs, or undermines our ability as a nation to compete,” Trump said at a speech in Detroit, last August. “As part of this reform, we will eliminate the carried interest deduction and other special interest loopholes that have been so good for Wall Street investors, and for people like me, but unfair to American workers.” Eliminating the “carried interest” benefit will generate $17 billion in tax revenue over ten years --$1.7 billion a year -- according to the Congressional Budget Office. That’s a relative pittance of the federal government’s $3.6 trillion in annual tax receipts. It’s not clear if Trump will actually follow through on this proposal but it is clear that Wall Street will fight it.

Another worrisome component for Wall Street about Trump’s economic proposals is how they will impact the federal debt, now barreling toward $20 trillion. Trump said repeatedly during the campaign that he would reduce the federal debt. “We're gonna knock it down and we're gonna bring it down big league and quickly,” he said in October 2015. But the nonpartisan Tax Policy Center has analyzed Trump’s economic proposals and has concluded that instead of reducing the national debt, they will, in fact, increase the national debt by $7.2 trillion over ten years. That’s the opposite of debt reduction and would make the United States an even more highly leveraged entity than it already is. Bond markets aren’t reacting well to the Trump victory. At the same time as the stock market is finding new highs, Treasury securities have fallen sharply in price, in part over fears about what Trump’s proposals will mean for fiscal responsibility. And it’s also unlikely that Dodd-Frank will be repealed any time soon. Another Wall Street executive, a Republican who is close to Paul Ryan, the speaker of the House, said in an interview that while repeal is on the Republican agenda, it’s not high on it. “I think [Trump’s] smart enough to know that doing something terribly favorable for the Street in the early days is probably not to his benefit,” he said.

Still, on balance, despite the dislike for Trump that many Wall Streeters expressed during the campaign—in part because they feared his unpredictability, as Ackman suggested—they are quickly finding new things to love about his victory. It’s no longer verboten, for instance, to consider someone with a Wall Street background for a cabinet or White House position, as it surely would have been had Clinton won and had she had to contend with the likes of Warren and Senator Bernie Sanders on her left.

For a brief time last week, Trump even floated the idea of Jamie Dimon becoming his Treasury secretary. Dimon, of course, is the longtime Chairman and CEO of JPMorganChase, the nation’s largest bank. He supported Clinton for President. In October 2013, Trump told me that he thought Dimon was a wimp for paying a $13 billion fine to settle civil litigation with the Justice Department over JPMorganChase’s behavior in the years leading up to the financial crisis. Trump said he did not believe in settling lawsuits. At that time, Trump called Dimon “the worst banker in the United States.” (In September, Dimon said the only job in Washington he would be interested in having is President of the United States. He is said to have rejected the idea of being considered for Treasury secretary.)

At the Times’ conference last week, when Sorkin asked Blankfein about the possibility of Dimon becoming Trump’s Treasury Secretary, Blankfein was enthusiastically supportive. “He’d be a great Treasury Secretary and he’s been a terrific competitor,” Blankfein said, “and with that one move you’d kill two birds with one stone.” Sorkin then asked Blankfein what he’d do if Trump offered him the same job. He seemed genuinely caught off guard by the question, given how unlikely it would have been for Clinton to propose a CEO of Goldman Sachs as her Treasury secretary. It’s a testament to how quickly the atmospherics have changed since Trump’s shocking election on November 8. Blankfein hemmed and hawed, and then said, “When you have an opportunity to make that kind of impact, you’d have to think quite seriously about it.”

It’s been a long, hard road through the wilderness for Wall Street since the 2008 crash. But in the heady days after one of the biggest upsets in American electoral history, it’s hard not to read the mood: Wall Street’s back, baby.