Please, God, Save Gary Cohn from Himself – Vanity Fair
Gary Cohn, the former second in command at Goldman Sachs, should follow Stephen Bannon out the door and resign as Donald Trump’s chief economic adviser in the White House. Unlike Bannon, he should resign on principle. He should resign—not because of anything he has done wrong, in fact, quite the contrary—but because it is the right thing for him to do in the wake of Trump’s disgraceful reaction to the horrific events that played out last weekend in Charlottesville, Virginia. He should resign despite the fact the stock markets will probably react negatively to the departure of one of the only halfway-sane economic voices in this administration. He should resign for his own dignity and so that the reputation he worked so hard to build on Wall Street during the last 30 years doesn’t get further destroyed by the monster that is Donald Trump.
Will he? That’s a question that plenty of people on Wall Street and in Washington have been debating this week. There has been some reporting since Trump’s pathetic question-and-answer session on Tuesday from the lobby of Trump Tower that Cohn is “deeply upset,” according to Maggie Haberman, at The New York Times, and “disgusted,” according to her colleague Glenn Thrush, about Trump’s defense of white nationalists, neo-Nazis, and their Tiki torch-carrying brethren. I am told Cohn “is dying” inside the Trump lunatic asylum, and that “this is a real inflection point for him.” It should be. During previous interviews with me, he has made it clear that it is increasingly difficult for him to stay in an administration that, among other things, has advocated keeping Muslims out of the country, rejected the Paris climate accord, and doesn’t seem to be able to accomplish the things he cares about. He has told me that he’s in it mainly for the chance to reform the tax code, which hasn’t been overhauled in 30 years.
But is he really sticking around Washington so that he can help people who are already rich pay less in taxes? Is he really sticking around for the increasingly slim chance that comprehensive tax reform might happen? Larry Summers, the Harvard economist and former Treasury secretary (who also once had Cohn’s job) said on Bloomberg TV yesterday that the chances of meaningful tax reform are likely dead. So what gives, Gary? Why put up with this shit anymore? Following Trump’s Tuesday afternoon diatribe, I texted Cohn, wondering how he and Steve Mnuchin, the Treasury secretary—both very wealthy, Jewish, former Goldman partners—could stand by Trump’s side during the impromptu press conference where he doubled-down on his failure to condemn the white nationalists that marched Charlottesville, Virginia, resulting in the killing of Heather Heyer. He did not reply. I still have not heard from him.
There is no reason for him to stick around anymore. There is no economic agenda that has much of a near-term chance of getting done. He has already successfully converted his $250 million fortune in Goldman stock into Treasury securities on a tax-deferred basis. No one can take away from his résumé the fact that he was the nation’s top political economic adviser, just as were his former Goldman colleagues Robert Rubin and Stephen Friedman. Summers has also strongly implied that he should resign, on principle. (He said if he were in Cohn’s shoes he would resign but added that he learned “long ago” not to “stand in other people’s shoes.”) So what’s holding Cohn back from doing what is so obviously the right thing for him to do? Why is he continuing to serve such an incompetent leader?
I think the answer is ego. Cohn wants Trump to name him chairman of the Federal Reserve Board of Governors, replacing Janet Yellen, whose term expires next February. It would be the perfect way for him to fulfill his boundless ambitions and also give him a graceful exit out of the White House. If he got the job—which he isn’t particularly well qualified for; he’s not an economist, not that that is a prerequisite (Summers is far better qualified but not under consideration)—he would become the first Goldman Sachs alumnus to become Fed chairman. (Goldman Sachs alumni head up the Bank of England and the European Central Bank.) That would put him in truly rarefied air—above Rubin, Mnuchin and Hank Paulson, all of whom have served as Treasury secretary. It would also remove him from the political fray and put him in a job from which it would be very difficult for Trump to fire him.
Cohn wants the job so badly he can taste it. Trump named Cohn to be head of the Yellen replacement search committee. But Cohn is trying to pull a Dick Cheney and get Trump to name him to the job, instead. In July, Trump said that Cohn was a good choice to be Fed chief. (He also said he might just re-appoint Yellen.) My sources tell me the job is Cohn’s for the taking, assuming he sticks around the White House and remains a good Trump soldier. When I asked Cohn about wanting the Fed job, he of course demurred, which is the only politically correct thing to do. His surrogates are working hard for him, though. William Dudley, a former Goldman partner who has been president of the Federal Reserve Bank of New York since 2009, said in a recent interview with the Associated Press that Cohn would be “a reasonable candidate” for the job as Fed chief but declined to recommend any other people along with Cohn. “He knows a lot about financial markets,” Dudley said. “He knows lots about the financial system.” He added that Cohn’s lack of a doctorate in economics was not a drawback for a Fed chief.
The right thing for Cohn to do is resign. He has no business any longer in a Trump administration. By staying, he is allowing Trump “to borrow his credibility,” in the words of Thomas Ricks, the Pulitzer Prize–winning journalist, and ruin it. Can he put aside his personal ambition to be Fed chair in order to save his dignity and do what is clearly the right thing? No doubt this is what Cohn and his family are discussing during his respite in the Hamptons. “Do you want to have a boss like Donald Trump?” Summers said on Bloomberg, after being asked whether Cohn should resign. “How do you face your children?” It’s the right question, Gary.
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