Wall Street honcho Gary Cohn, the just-announced incoming director of the National Economic Council, would be a perfect choice for a top economic policy job for the new president.
If, that is, Hillary Clinton was heading to the White House, not Donald Trump.
Yes, the new president-elect, who explicitly campaigned on the promise to “drain the swamp” of political and economic favoritism, lower taxes and reduce the size of government, has brought into his administration one of the ultimate corporate insiders who has supported progressive economics and feasted off of government bailouts after the 2008 financial crisis.
As I’ve said in the past, there’s much to like in the incoming Trump administration’s approach to the economy, particularly after the last eight years of President Obama’s tax-and-spend fiasco. The Donald campaigned on growing the economy through cutting taxes and regulations — a k a supply-side economics that Ronald Reagan used to get the economy going after the malaise of the 1970s.
But these are just plans, and Trump will need some supply-side true believers to bring them to fruition. Unfortunately, few such people have made their way onto Trump’s team.
Trump, for his part, referred to Cohn as his “top economic advisor.” The post has, in the past, been used as a stepping-stone to other key jobs such as Treasury secretary and chairman of the NY Fed.
Cohn undoubtedly understands aspects of the economy and the markets; he was a commodities trader where (battling dyslexia no less) he became rich and successful enough to become the No. 2 executive at Wall Street’s most prosperous (and politically connected) firm, Goldman Sachs, behind CEO Lloyd Blankfein.
And while Cohn is one of several Goldman people who will be working for Trump (more are likely on the way), the firm’s political connections shouldn’t disqualify him from government service — despite the demented hatred progressive politicians like Massachusetts Sen. Elizabeth Warren have for Wall Street.
What should disqualify Cohn is what he has stood for during his career: Goldman was a huge recipient of government bailout money after the 2008 financial crisis — taxpayer cash that kept the firm from following Lehman into bankruptcy.
While he was accepting this largesse from the Bush administration, he and the rest of Goldman were working hard to elect Obama president, and later endorsing Obama’s tax and regulatory policies that led to disasters like ObamaCare.
Cohn and Blankfein did eventually turn on Obama — not because of the failure of Obamanomics, but rather, I am told, because new banking laws crushed Goldman’s lucrative business of taking big risks in the markets.
And there’s more: Goldman, Blankfein and Cohn have been supporters of the controversial Clinton Foundation. Maybe Trump forgot that under Cohn, Goldman funneled huge speaking fees to Hillary Clinton before she ran against him for president.
Or maybe he forgot Cohn was unabashed in his opposition to Brexit. Trump rightly hailed the referendum for giving voice back to the British people, while Cohn worried publicly that the move would somehow weaken the UK’s role in the banking industry.
Whatever the reason, Cohn’s selection was a stark contrast to the man Trump passed up for the job as head of the economic council, free-market evangelist Larry Kudlow.
During the campaign, Kudlow was one of Trump’s staunchest supporters, providing Trump with the details of his tax and regulation-cutting plans. The optimism those plans inspired is the main reason the stock market is heading toward 20,000.
Yes, Trump has said some great things on the economy, but he’s done some worrying things as well — like attacking individual companies on Twitter and driving down their stock price, and his comments against free trade — that put his free-market credentials into question.
You can add the appointment of Gary Cohn to that list.