It appears that Gary Cohn might have grown over-comfortable being the smartest man in the room at any given moment in the Trump White House.
The Big Grundle sat down with CNBC's John Harwood to talk over the tax reform plan he fashioned for Trump. He then proceeded to say a litany of things that made us wonder if Gary ever received any media training at Goldman Sachs whatsoever. In the space of 20-odd minutes, Gary spoke with such extemporaneous frankness on economic issues surrounding the tax plan that it began to seem like he forgot he worked in the White House.
Here's a sampling.
On the estate tax repeal, Gary tried to sound like a populist before doing the conversational equivalent of stepping in a bucket and falling down a flight of stairs:
Harwood: Why do estate tax at all? If you preserve step-up basis, that means many capital gains for your kids, for Donald Trump's kids, will never be taxed.
Cohn: Let's wait and see where the final plan comes out. On the estate tax, if you look at the couple of groups who are the biggest advocates for repealing the estate tax, it really is the pass-through business and it's the farmers.
Harwood: It's Donald Trump, Gary Cohn, people like you guys.
Cohn: Gary Cohn doesn't care about the estate tax, I can guarantee you. I can guarantee you.
Harwood: You're the one who said only a moron pays the estate tax.
Cohn: I can guarantee you Gary Cohn doesn't care about the estate tax.
But it got worse! Here's Gary on the deficit caused by the tax plan and how i could be possibly offset by repatriation, a topic that he just needed to not sound like a insider Wall Street giveaway:
Harwood: The Penn-Wharton model that was run by this former Bush economist has got a new projection out that shows that there is a chance that this will shrink the economy in the long run because of the deficit drag.
Cohn: We don't agree with that. We believe that we're going to have a very stimulative effect on the economy by lowering the business tax rate, by lowering the corporate rate, and making America competitive with the rest of the world. Look, a year ago, I was on the other side of this equation. I was advising companies how to get out of the burdensome U.S. tax system. We were talking about inversions — we were talking about moving companies out of the United States. The most compelling presentation I could make to a board is, hey, I can turbocharge your earnings without doing anything in your company. I can just relocate your domicile, and you can hold your board meetings, you can do a few things, and you can go from a 35 percent tax rate to a 15 percent tax rate. You can deliver 20 percent of your earnings to the bottom line.
Harwood: Did you feel guilty advocating that as an American?
Cohn: No. I didn't feel guilty because boards have a fiduciary responsibility to their shareholders. That's what they're supposed to do.
This is not going to play in Peoria. But Gary could salvage this, right? He just needed to use the skills he was taught by the GS press shop...
Harwood: You, I imagine, are the point person in the White House for big CEOs because you come from their world, they know you. What are you hearing from them right now?
Cohn: The most excited group out there are big CEOs, about our tax plan.
Umm, did anyone tell Gary that red light means the camera is ON?
Well, at least the chat gave him a chance to defend his choice to join this administration and perhaps even re-cement his place in the power structure of this White House...
Harwood: I think most people looking from the outside see more irrational stuff happening in this White House than in any White House that they've seen.
Cohn: I'm involved in the economic side of the White House. On the economic side, I think the reality is pretty strong for what's going on in this White House.
Why not just say "Who Seb Gorka?"
And here's more Gary on the populist power of a massive corporate tax cut:
Harwood: If you look at the center of gravity of the economics profession, what they will say is that the deficit will go up more than you guys say, growth will increase less than you guys say, and that workers will get less than you guys are projecting.
Cohn: We vehemently don't agree. When you take a corporate tax rate at 35 percent and move it to 20 percent, and you see what's happened over the last two decades to businesses migrating out of the United States, migrating profits out of the United States, migrating domicile out of the United States, and hiring workers out of the United States, it's hard for me to not imagine that they're not going to bring businesses back to the United States.
You know what, that wasn't so bad. He laid out a conservative theory of tax reform and succinctly defended the White House's economic liturgy without using any of those buzzwords that make people flip out...oh, he kept talking?
Cohn: We create wage inflation, which means the workers get paid more; the workers have more disposable income, the workers spend more. And we see the whole trickle-down through the economy, and that's good for the economy.
Oh, come the fuck on, Gary Cohn!
Talking on live TV like he did off-camera inside 200 West Street is so tone deaf that it defies logic. Whether or not Gary is right about any of this (and he made some very solid points) the politics around this tax plan are pitched to an 11, and he needs to select his words with that in mind. Sure, he's smarter and more financially respected than anyone else in the current West Wing, but this kind of Goldman Sachs capitalist straight-talk is also political self-harm.
At least he didn't directly piss off anyone at Goldman in the inevitablity that this whole White House gig goes pear-shaped.
Harwood: Compare Donald Trump and Lloyd Blankfein as bosses.
Cohn: They've got a lot of similarities.
The Gary Cohn we knew is dead.