Trump Economic Adviser Gary Cohn At Odds With Inner Circle

Mar 30, 2017
Originally published on March 30, 2017 7:29 am
Copyright 2017 NPR. To see more, visit http://www.npr.org/.

DAVID GREENE, HOST:

Let's meet the man President Trump turns to for advice on economic policy. His name is Gary Cohn and he's head of the president's National Economic Council. Trump will be getting advice from Cohn and that group today as he turns from health care reform to the next big item on his domestic agenda, a big overhaul of the tax code. Gary Cohn is a just-retired president of Goldman Sachs. Those Wall Street roots, and also his moderate stances on social issues and trade, put him at odds with others in the president's inner circle. NPR's Chris Arnold brings us this profile.

CHRIS ARNOLD, BYLINE: Gary Cohn took an unusual path to Goldman Sachs and the White House. Cohn's dyslexic, and teachers told his parents not to expect much. As a kid, he helped out at his family's electrical contracting business in Cleveland. He went on to business school. Then he was floundering around, and he decided what he really wanted to do was to work on Wall Street. So one day on a trip to New York, he went down to a commodities trading floor, and he just stood around outside the security checkpoint.

(SOUNDBITE OF ARCHIVED RECORDING)

GARY COHN: And I hear a gentleman say, I got to run. I'm going to the airport.

ARNOLD: That's Cohn telling the story during a commencement speech.

(SOUNDBITE OF ARCHIVED RECORDING)

COHN: I jump in the elevator with him and say, I overheard you're going to the airport. Do you mind if I share a taxi with you?

ARNOLD: The guy worked for a financial firm, and he agreed. And on the ride, Cohn tried to get the guy to give him a job, even if that meant bending the truth a bit.

(SOUNDBITE OF ARCHIVED RECORDING)

COHN: He says, what do you know about options? I told him, I know everything. He said, great. I want you to come back Monday. I want you to interview. I'm trading options. It's a brand-new market that's opening, and I don't know how to trade it. And I said, no problem. I'm your guy.

(LAUGHTER)

COHN: Literally got home Friday night. The first stop on the way in from the airport was the bookstore. I bought the...

(LAUGHTER)

COHN: I bought the McMillan "Options As A Strategic Investment" book and read it four times - as I said, dyslexic guy - read it four times over the course of the weekend, came back in and interviewed and was offered a job. And that's how I started in my financial services industry.

ARNOLD: Now, despite his working-class roots, in some ways, Gary Cohn represents everything that many Trump voters hate. He's a registered Democrat. He's reportedly been a voice for gay rights in the White House. He's also now a super rich former Wall Street executive who supports free trade and globalization. Those are things that, during the campaign, Trump basically blamed for ruining America. But after seeing the more extreme and fringy advisers surrounding the president, more centrist watchers of the economy were relieved to see Trump pick Cohn as his top economic adviser.

MICHAEL DRISCOLL: Cohn is going to be perceived as the adult in the room.

ARNOLD: Michael Driscoll worked on Wall Street for 25 years and is now a finance professor at Adelphi University. The populist rhetoric from Trump has made many economists nervous that he might start a damaging trade war. But...

DRISCOLL: One thing about Wall Street executives is they're going to be pragmatists, all right? You know, Cohn and some of the other people that come from the world of finance are going to be much more aware of what the implications are for the U.S. and the global economy and for the markets.

ARNOLD: So Driscoll says he's happy to see that Cohn's in the president's inner circle. But critics say, while all that may be true, Cohn is also putting Wall Street ahead of Main Street. Cohn stood by the president's side as he signed an executive order that in effect suspends a rule from the Obama administration, a rule that says financial advisers need to act in their client's best interest. Here's Cohn on CNBC.

(SOUNDBITE OF TV SHOW, "SQUAWK ON THE STREET")

COHN: The rule was completely misintended. They were trying to protect investors in their retirement accounts, but by protecting investors, they highly limited their choices.

ARNOLD: But that limiting-choice language is telling, say supporters of the rule, which include the AARP and scores of other retiree and consumer groups. They say that argument is just a bogus industry excuse. Phil Angelides is the former head of the Financial Crisis Inquiry Commission.

PHIL ANGELIDES: This is the big lie they tell. They want to tell Americans their choices are being limited. The rule does nothing of the sort.

ARNOLD: Cohn and the Trump administration have also said they want to attack the Dodd-Frank Wall Street Reform Act and other regulations. Angelides says to him it looks like they want to go back to the way things worked before the financial crisis.

ANGELIDES: Gary Cohn is walking out of Goldman Sachs into the government with a payout that's going to be close to $300 million. And so he looks at the system that existed before the financial crisis. He thinks it worked just fine.

ARNOLD: Angelides says, for the millions of Americans who lost their jobs, it didn't, and he hopes that Cohn and the administration won't be able to gut the reforms that were passed after the worst economic collapse in generations. Chris Arnold, NPR News.

(SOUNDBITE OF KYO ITACHI'S "SHADOW BEAT") Transcript provided by NPR, Copyright NPR.