Gary Cohn Can’t Quit Trump. Literally. He’s Tried More Than Once.
Now he’s one of the tiny quorum of adults around Trump—doing his “national duty,” as Trump said. “They get along again,” said a source.
by William D. Cohan October 13, 2017
Gary Cohn board Air Force One following Steven Mnuchin and Stephen Miller, September 27, 2017. By Jonathan Ernst/Reuters.
Gary Cohn, Donald Trump’s national economic adviser, made his bones at Goldman Sachs by proving to be an exceptional risk manager. Famously, he was part of the small group of Goldman traders and senior executives who figured out in 2006 that a meltdown was looming in the housing market and who positioned Goldman, through a series of clever trades that became known inside the firm as “the big short,” to benefit mightily nearly two years later when the financial crisis hit with a vengeance. In 2007, while much of the rest of Wall Street was reeling from the crisis’s first shockwaves, Goldman was cleaning up, thanks to its decision to bet against the mortgage market. That year, the firm made nearly $18 billion in pre-tax earnings—a number it has never seen again—and the top five Goldman executives, Cohn included, split a whopping $322 million. Cohn’s personal take from that honeypot? $72.5 million.
These days Cohn has been wrestling on a regular basis with a different form of risk management—and, mostly, losing. Working for Trump has been slowly eroding the reputation he spent 27 years crafting so meticulously at Goldman. His angst came to a head in August, during the 10 days after a group of white nationalists marched in Charlottesville, Virginia, when Trump repeatedly fumbled his response to an incident that left one protester dead. As Kate Kelly and Maggie Haberman of The New York Times reported on August 25, Cohn drafted a letter of resignation, and was prepared to deliver it to Trump. What has not been previously reported is that, according to a source with detailed knowledge of this thinking during that period, Cohn sought to resign twice while speaking directly to Trump during that 10-day period. He also spoke with John Kelly, the new chief of staff, about his desire to resign. But apparently, resigning from Trumpworld is far more difficult than one would expect. Cohn’s continued presence in the West Wing is a testament to a reality that is rapidly becoming crystalline: that Cohn, along with Kelly, Jim Mattis, the defense secretary, and Rex Tillerson, the secretary of state, are all that is standing between Trump and utter chaos and incompetence.
Cohn’s recent troubles began on August 15 in the lobby of Trump Tower when what was supposed to be a briefing with Trump and Steve Mnuchin, the treasury secretary, about the administration’s infrastructure plans turned into a chance for Trump to walk back the more conciliatory comments about Charlottesville he had made previously. While Trump doubled down on his divisive comments—there were “very fine people” among the white supremacist groups, Trump said—Cohn, who is Jewish, stood at Trump’s side, a pained expression on his face. After Trump left the lobby, Cohn was forced to field questions about what Trump had said. He declined to do so.
That began a 10-day period of introspection for Cohn. Should he resign? Should he publicly rebuke Trump? Should he stay silent and carry on? According to someone familiar with what happened, Cohn decided to resign, and drafted up his letter of resignation. It turned out not to be as easy to quit Trump as Cohn had hoped. On Friday, August 18, after a day of meetings at Camp David to discuss his South Asia policy, Trump flew on Air Force One to Morristown Airport, in New Jersey, to spend the weekend at his golf club in Bedminster. Trump landed at 5:23 P.M. and his motorcade took him to the Trump National Golf Club. By then Cohn was already in Bedminster, waiting for Trump to arrive so that he could go in and resign.
He eventually got an audience with the president. They talked about Trump’s upsetting response to Charlottesville. Trump told him, “Is it really so bad?” according to the same person familiar with what transpired. Cohn conveyed to Trump how upset he was and that he wanted to resign. He unburdened himself to Trump. Trump told him to “think about it” and not to act rashly. Cohn emerged from the encounter with second thoughts. “I’ve been asked to think about it,” he said, according to the source. That night, Cohn headed to his house in the Hamptons and to a 30-person dinner party, where he arrived two hours late, at the home of Lloyd Blankfein, the C.E.O. of Goldman Sachs and his former boss. Over the weekend, he spoke to his wife and family, and others, about his concerns. His angst continued unabated.
Cohn returned to Washington determined still to resign. He went to see Kelly on Monday morning in order to get time on Trump’s calendar. Gone were the breezy days of just walking into the Oval Office on a whim, before Kelly imposed military discipline on the comings and goings in the West Wing. By then, Kelly knew of Cohn’s intention to resign and Kelly, too, tried to talk him out of it, despite his own considerable frustrations with Trump. Cohn had several conversations with Kelly. “It was complicated,” said the source. “The impression I got was that Kelly wants him to stay around, but he says, ‘I can’t tell a person what to do.’ He encourages him to stay around, but he doesn’t sort of do, like, a, ‘You have to stay.’ It’s some version of, ‘Do what you think is right in your conscience,’ but I do think he encourages him to stay.”
Cohn thought about Kelly’s advice. But he was still determined to resign. He asked Kelly for an appointment with Trump on August 21. But that was a tough day for Trump. The president was hunkered down, focused on the speech he was to give that night, in Arlington, Virginia, about the 16-year-old war in Afghanistan. Kelly told Cohn that his meeting with Trump would have to wait. Kelly offered Cohn the chance to see Trump, in the Oval Office, a day later, before Trump flew to Yuma, Arizona. Cohn accepted.
This was Cohn’s showdown meeting with Trump. It was a “long conversation,” the source said, where Trump did everything from yelling at Cohn that his staying with him in the White House was a matter of his “national duty” to trying to cajole him into sticking it out, using more of a light touch. Interestingly, Trump was clear to make a distinction with Cohn. His “duty” was to “the country” not to Trump personally. He refused to read or to take Cohn’s letter of resignation. A White House official disputed that Trump specifically asked Cohn to stay on as national economic adviser. “The president encouraged Gary to make his own decision,” the official said. (For his part, Cohn declined to be interviewed about what happened.)
Although one would think that it’s easy enough to resign by just resigning, Trump’s pleas seemed to work with Cohn. Instead of quitting, he decided to go public with his frustration with the way Trump handled Charlottesville. In an interview with the Financial Times, on August 25—days after his Oval Office meeting with Trump—Cohn throttled Trump. “I have come under enormous pressure both to resign and to remain in my current position,” he told the paper. “As a patriotic American, I am reluctant to leave my post . . . because I feel a duty to fulfill my commitment to work on behalf of the American people. But I also feel compelled to voice my distress over the events of the last two weeks. . . . Citizens standing up for equality and freedom can never be equated with white supremacists, neo-Nazis, and the K.K.K. As a Jewish American, I will not allow neo-Nazis ranting ‘Jews will not replace us’ to cause this Jew to leave his job. I feel deep empathy for all who have been targeted by these hate groups. We must all unite together against them.” That Cohn would be speaking to the Financial Times about his views on Charlottesville was pre-cleared with the White House. “He’s been very open and honest,” Sarah Huckabee Sanders, the press secretary, told the Financial Times. “And so I don’t think that anyone was surprised by the comments.”
As we know, Trump does not like to be criticized, let alone by a senior member of his White House staff. According to published reports, he did not react well to Cohn’s FT interview. Cohn was “iced” for a while, my source said. Stories started appearing that Trump would not look Cohn in the eye, that Cohn was being excluded from key meetings, and that the likelihood that Trump would choose him to replace Janet Yellen, as chairman of the Federal Reserve Board—once viewed by Cohn as his elegant escape path from the White House lunacy—had been greatly diminished. It’s a testament to how badly Trump needs the rational, centrist members of his team—Cohn, Mattis, Kelly, and Tillerson, among them—that the hard feelings between Trump and Cohn over Charlottesville have been put in the past. Their relationship is “back to normal,” I am told by this source. “They get along again.”
Cohn supposedly stayed for the good of the country, to be part of the tiny quorum of adults around Trump. But if the events of August taught him anything, it was to keep a lower profile, and not be a lightning rod for the Trump administration. He told me months ago that he relished the opportunity to be part of the team that overhauls the tax code for the first time in more than 30 years. And indeed, Cohn is said to have had a large hand in drafting Trump’s still-amorphous tax-reform “framework,” which provides hefty tax cuts to the wealthy and to corporations providing a minimal benefit, if any, for the middle class. It’s a strange plan for a liberal Democrat, which Cohn was (and may still be) before he joined the Trump administration, to have helped to create. The proposals, a throwback to the “trickle-down” economics of the Reagan era, will massively increase deficits and the more than $20 trillion in national debt, unless the economy can somehow start growing much faster than the 2 percent G.D.P. rut it has been stuck in for a decade.
But Cohn’s selling of the plan has been half-hearted, at best. It has been his former Goldman partner, Mnuchin, who has taken the lead on it, at least publicly, and therefore should it fail, which seems increasingly possible, it will be Mnuchin more than Cohn who will end up with the bulk of the flak. At Goldman, risk management was how Cohn distinguished himself and rose to the top. But sadly for him, in the Trump White House, it’s a skill he’s had to try to learn all over again.