Gary Cohn quits: Is it really about steel tariffs or is Trump's economics guru looking to take advantage of the tax cut he helped create?

There is really no upside for the Goldman Sachs alumnus in sticking around as a trade war looms

James Moore
Chief Business Commentator
Wednesday 07 March 2018 11:43 GMT
Gary Cohn: Donald Trump's advisor is joining the revolving door at the White House
Gary Cohn: Donald Trump's advisor is joining the revolving door at the White House (AFP/Getty)

See ya Gary Cohn. It’s tempting to add that old schoolyard jibe ‘wouldn't wanna be ya’ but Donald Trump’s outgoing economic advisor is filthy rich and will probably get more lucrative job offers than Lionel Messi at the end of a contract after he has cleared his desk.

All the more so because of the tax cut he played a leading role in getting through, a package that hugely benefits wealthy people like him and the corporates gagging to employ him at the expense of a monster future deficit and the probable torching of programmes to help the millions of Americans to whom the “Trump Bump” has brought nothing but pain.

Publicly Mr Cohn and Mr Trump followed the form and made nice. They’re great pals. He’ll be around for a while, and will still provide advice after he’s gone, like was said of Steve Bannon before the latter became the White House’s devil incarnate.

The spin from anonymous sources quoted in the US media is that his resignation was sparked by his disagreement with America’s trade policy, specifically Mr Trump’s steel tariffs and what might be coming in their wake, which includes the very real possibility of a trade war.

The President is re-heating his aggressive “America First” agenda that his base loves ahead of the US mid term elections. Despite frequently being at odds with his party, he needs as many Republicans elected as possible and that is what fires up the party’s base.

But the policy is anathema to Mr Cohn, a convinced free trader who served as the president of investment bank Goldman Sachs before, like so many others from that institution, moving into public life.

A lifelong Democrat, from the wing of the party whose members would probably be most comfortable as part of the Conservative Party of David Cameron were they in Britain, he is socially liberal, is said to have pushed for the employment rights of LGBT people to be preserved, and to have advocated for the US remaining in the Paris Climate Accords, while offering sound practical advice to his mercurial boss.

Guilt by an association with protectionist policies he believes to be antithetical to America’s long term best interests, pushed by the hardliners in Trump’s circle, was, we are told, the straw that broke the camel’s back leading to his joining a revolving door of advisors that has been spinning at a dizzying rate of late.

There is a lot to be said for the media’s favoured explanation.

But it is also true that Mr Cohn, in delivering the tax package, may well feel he’s done the job he intended to do. America’s rich are getting richer, its corporations more bloated. Its economy has enjoyed a short term boost.

That being the case, there is scant upside for him in sticking around in a place that, by all accounts, is as much fun to work at as having your teeth pulled out with a pair of rusty pliers.

Through this lens, Trump’s angling for a trade war simply provided him with the excuse he needed. It makes Mr Cohn look good. It portrays him as a man making a principled decision when that decision could easily have been motivated by a careful consideration by Mr Cohn of what lies in his best interests.

Leaving now means he can point to the tax cut as his legacy, while avoiding any chance of an association with the troubles that lie ahead. Plus it leaves him free to pick up a lucrative new job somewhere. For Mr Cohn, quitting now is a no brainer.

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