Gary Cohn drafts resignation, later changes his mind

Gary Cohn was anguished by Donald Trump's remarks after the Charlottesville violence on August 12

Gary D Cohn, the director of the White House Economic Council, wrote a resignation letter after President Trump blamed “both sides” in the deadly protest this month against a Charlottesville, Virginia, rally by white supremacists and neo-Nazis, according to three people familiar with the document.

Cohn ultimately changed his mind and decided in recent days to remain on as Trump’s chief economic advisor, said one person familiar with his thinking.

But in a stunning critique of the president, Cohn told The Financial Times in an interview published on Friday that the Trump administration “can and must do better” to condemn hate groups and “do everything we can to heal the deep divisions that exist in our communities.” Cohn is an architect of a broad set of tax reforms that the White House hopes will deliver the first legislative victory of Trump’s tumultuous administration. 

But Cohn was anguished, according to a friend and two other people familiar with his thinking, by Trump’s remarks after the August 12 violence that resulted in the death of a 32-year-old woman who was protesting neo-Nazis and Ku Klux Klan demonstrators in Charlottesville.

On August 15, Cohn stood nearby in the lobby of Trump Tower, where the president told reporters there also were “very fine people on both sides” of the Charlottesville rally. After Trump left, Cohn stood uncomfortably fielding questions about the president’s statements, and he repeatedly declined to comment. 

He debated for over a week with his wife and friends on whether to quit, according to the people familiar with his thinking. This week, Cohn decided to remain in his job, believing he could be more effective as a public servant inside the White House than out of it.

He is one of the few Jewish members of the administration who have publicly condemned Trump’s remarks about Charlottesville, although he has quietly disagreed with the president on a number of policy matters.

As Trump stood by his equivocal comments on Charlottesville and business leaders left presidential advisory panels in protest, Cohn told The Financial Times, he felt “enormous pressure” to step down. Various friends, and Cohn’s wife were at one point among those who were urging him to resign, said several people familiar with their advice.

A senior administration official said the president was not surprised by Cohn’s remarks to The Financial Times. Another official said the sentiments had been relayed clearly to Trump, and Cohn had said that if asked, he would say how he felt.

But on Friday, Roger Stone, a longtime adviser to Trump, tweeted that Cohn “should be fired immediately for his public attack on the president.” In his tweet, Stone misspelt the name of Cohn, whom he has aggressively criticised, and said the economic advisor was “recommended for his White House job by Jared Kushner.”

It is highly unusual for a senior member of any presidential administration to publicly discuss the possibility of stepping down. Geoff Garin, a veteran Democratic pollster who worked on Hillary Clinton’s 2008 presidential campaign, said even though Cohn did not criticise Trump by name in the Financial Times interview, “the comments are still very tough and very blunt, including his comments about the push-and-pull whether to stay and whether to go.”

“There’s no effort to conceal the fact that what Trump said was wrong and troubling,” Garin said. “And it’s hard to think of very many precedents for somebody like that who is a high-ranking presidential advisor.”

Cohn told The Financial Times that “as a Jewish American, I will not allow neo-Nazis ranting ‘Jews will not replace us’ to cause this Jew to leave his job.”

But the job has not been easy. For Cohn, said two people familiar with his thinking, every day at the White House requires a different calculus over how best to spend his political capital. Right now, these people said, he will focus on economic policies that he believes is essential to the stability of the markets and the United States work force - even when other issues worry him.

Nudging Trump toward a more free-trade stance that avoids harsh steps toward China and other economic partners is paramount, these people said. Part of that, they added, is opposing tariffs on steel, aluminium and other goods that might damage relationships with American allies.

But using political capital on those fights means avoiding others, even when the president espouses policies that run contrary to Cohn’s own principles, the two people said. Among other things, they said, Cohn disagrees with the president’s directive banning transgender people from joining the military but will leave that fight to others.

On August 17, with word of Cohn’s unhappiness percolating on Wall Street, some traders and investors got jittery. Seeing Cohn as a key player in pushing forward the Trump administration’s tax cuts, some sold American stocks, pushing prices down.

Cohn, a one-time silver trader who eventually became president of Goldman Sachs, was struck by the market move, said two people familiar with his thinking. He continued to huddle with friends and family over what steps to take, attending meetings in Washington during the process.

At some point during the past 10 days, Cohn penned a tentative resignation letter, said the three people familiar with the draft. It was not immediately clear what day the letter was written, or if Trump was ever made aware of it.

But during a private August 18 meeting with the president at his golf club in Bedminster, NJ, Cohn relayed his concerns about Trump’s comments on Charlottesville, said people with knowledge of the gathering. The exact details of the talk are not clear, but the president urged Cohn to stay.

“I have had numerous private conversations with the president on this topic,” Cohn told The Financial Times, adding that “I have not been bashful saying what I think.”

One possible part of Cohn’s calculus is the chance that he could be named Federal Reserve chairman early next year, a move Trump has said he is considering. Cohn has in the past expressed interest in the job, said two people close to him. But unlike past Fed chairmen, Cohn is not an economist, and some of his friends have said it is hard to imagine him in the more reserved, less dynamic environment of the Fed, which would be a huge contrast to the pace of Goldman Sachs or the White House.

Steven Mnuchin, the Treasury secretary, who also is Jewish, defended Trump in a statement a week ago, after more than 300 of his Yale classmates urged him in a letter to step down. At a briefing with reporters at the White House on Friday, Mnuchin, an old business partner of Trump who has at times clashed over policy with Cohn, told reporters that under no circumstances have he considered resigning.

©2017 The New York Times News Service