Donald Trump has far too much on his plate right now to care what Gary Cohn says to CBS, but in “better” times, when the only things occupying the president’s time were “trivial” matters like prodding Pyongyang into nuking Guam, he might well have responded to Cohn’s tariff jabs on Sunday.
Overall, Gary was cordial and complimentary of the administration’s domestic economic priorities, which is no surprise because he was the architect of the tax cuts.
“I know lot of people have been talking about a recession. I do not see a recession on the horizon here”, Cohn told Margaret Brennan. “The US economy is strong. The US consumer is very strong”.
“If you look at what’s happened with tax reform, we have put more disposable income in the hands of the US consumer”, he continued.
At least some of that is correct. The US consumer is, in fact, strong. As to how much the tax cuts have actually helped the people with the highest marginal propensity to consume, that’s an entirely different discussion. Indeed, there’s a good argument to be made that the Progressive wing of the Democratic party has the strongest platform when it comes to putting more disposable income in the hands of the Americans most likely to spend it. If you eliminate the albatrosses of health insurance premiums and student loan debt, large swaths of America would suddenly have quite a bit more money to spend.
In any event, Cohn’s glowing assessment of the economy and the effects of the tax cuts did not extend to the trade war.
“I think it’s totally hurt the United States”, Cohn said, unequivocally. “The US economy is very strong, very solid. Employment growth is great. But we’re missing a big component. We’re missing the capital expenditures from companies in the United States”. Then, he said this:
The minute a company is thinking about spending capital, what do you go out and buy? You go out and buy steel and aluminum. That’s how you build factories. That’s how you build property, plant equipment. So all of the sudden, the advantages that we were trying to give companies to help stimulate the economy — to build facilities, to go out and hire people, to drive wages — we took away that advantage by taxing the input that they needed to build.
And there it is. That’s the truth of the matter. Donald Trump’s MAGA mercantilism is misguided and, at the end of the day, it is by no means clear that threatening allies and foes alike with tariffs and non-tariff barriers actually achieved anything that couldn’t have been achieved through determined negotiations.
Here is the full exchange with Brennan on the tariffs:
You’ll also note from the first clip above that while Cohn refused to openly condemn Trump and Larry Kudlow for their incessant berating of the Fed, Cohn did say, very firmly, “I’m not worried about interest rates right now”.
Headed into the election, Cohn – who was maligned by administration hardliners for being an “establishment” guy – was critical of Progressives.
“It’s probably easier to talk about corporate greed, and talk about Wall Street, and talk about technology companies because they don’t really have an answer for an economy that’s growing”, he mused. “I haven’t heard their answer on that, except let’s tax it to death”.
That is wholly disingenuous for a laundry list of reasons. Frankly, it’s disappointing that Gary would trivialize the debate that way. He is not a stupid man, and is fully capable of having an intelligent conversation about the fact (because that’s what it is) that capitalism in America is broken. That doesn’t mean it can’t be fixed. But it is broken. Ask Ray Dalio. Or Jamie Dimon, who, despite himself being critical of Progressives, has on numerous occasions discussed the extent to which the system is in desperate need of reform.
To be fair, Gary did say he’s concerned about income inequality, but contended that the Trump tax cuts actually helped ameliorate the situation. That’s a laughable claim.
Finally, Cohn said that when it comes to his vote in November, “I’m leaving the door open”.
“At this point, I don’t have any intention not to vote for the president”, he added.