It's probably time Gary Cohn leaves the Trump administration.
Actually, it's long overdue.
Last August, Cohn was aghast when, following the Charlottesville boondoggle, his boss decided to turn a press conference ostensibly convened to discuss infrastructure into a not-so-funny episode of Drunk History, complete with Donald Trump reminding America that "George Washington was a major slave owner."
Because you might have understandably decided to erase that exceedingly unfortunate episode from your memory, allow me to rekindle the moment. At one point, it devolved into Trump literally demanding that reporters tell him whether or not they are Thomas Jefferson fans ("What do you think of Thomas Jefferson? Do you like him?").
Again, Cohn was there and can be seen in the following infamous snapshot, beaming with pride:
A couple of days later, a rumor began circulating among traders that Gary was thinking of resigning. That rumor catalyzed one of the worst days for stocks in all of 2017 (this was back when 1% moves in either direction were a big deal). Here's the chart (click it to enlarge):
It turned out that the "rumor" wasn't a "rumor." Cohn essentially confirmed his misgivings in an interview with FT. Specifically, he said the administration "can and must do better in consistently and unequivocally condemning these groups."
Don't let the absurdity be lost on you there. The fact that Cohn actually had to say that the President of the United States "can and must do better" at condemning neo-Nazis speaks volumes.
As it turns out, Gary's anti-Nazi leanings might have cost him a run at the Fed Chairmanship. "Sorry Gary, we're looking for a little more white supremacy in our monetary policy."
To be clear, the reason the market tanked in August the day the resignation rumor started to make the rounds was because Cohn was seen as the lynchpin in the tax plan push. But more generally, Gary is one of the saner people in Trump's orbit, which is why it came as no surprise that he was extremely displeased with the Peter Navarro-inspired tariff idea.
At this point, it's probably fair to say that Cohn represents the last bastion of sanity in terms of the administration's economic policy. I mean there's Steve Mnuchin, but he's turned into a sycophant. Peter Navarro is notoriously crazy and Wilbur Ross is, well, he's just Wilbur. And that's not a good thing at this juncture.
So here we are five days after Trump, reportedly fuming over unrelated concerns about Hope Hicks and Jared Kushner, held a "listening session" for his new mixtape "Trade Wars Ain't Dead, Vol. 2" (it hasn't gotten great reviews in the hood), and Gary is frantically trying to put the brakes on things.
Essentially, he's organizing what amounts to a counter meeting to the one Wilbur organized last week. Gary has invited executives that depend on steel and aluminum to a meeting with Trump on Thursday in what Bloomberg describes as "a last-ditch effort" to halt the tariffs.
The meeting would include "representatives of breweries, beverage-can manufacturers and automakers, along with the oil industry," Bloomberg goes on to write, adding that the tariffs, were they to materialize, "would be a huge setback for Cohn" and are "viewed inside the White House as a possible breaking point for the former senior executive at Goldman."
Right. And speaking of Goldman, they were out with a not-so-glowing assessment of Trump's tariff idea on Tuesday. "By choosing across the board tariffs that are even more draconian than those recommended by Secretary Ross, the President has likely created a two-tier metal market, US versus the rest of the world, and politically created friction with key US allies," Gary's old employer wrote.
Meanwhile, Europe is set to hit the GOP where it hurts, slapping tariffs on bourbon and Harleys, a clear attempt to influence Mitch McConnell and Paul Ryan, respectively.
Who knows if Cohn will ultimately prevail. The meeting, if it happens, will reportedly include Ross, Navarro, and Lighthizer - in other words, it will be something to behold assuming cameras are allowed in.
With the tax cuts passed, it's not clear whether the market's reaction to a potential Cohn exit would be as severe as it would have been last autumn. Still, it would mean one less ostensibly reasonable person in the White House at a time when sanity is in short supply at 1600 Penn.
But that's ok, because as Trump tweeted on Tuesday morning, "people will always come and go"...