WASHINGTON, March 6, 2018: The Daily Caller reports that National Economic Council Head Gary Cohn has resigned from his position. The resignation was at least partly in reaction to President Trump’s announcement of impending tariffs on imported steel and aluminum.
“… Cohn is leaving his position, a move that comes after Trump announced new tariffs on steel and aluminum.
“A statement from President Trump to The New York Times reads in part, ‘Gary has been my chief economic adviser and did a superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again.’
“‘He is a rare talent, and I thank him for his dedicated service to the American people.’
“Gary Cohn also said in a statement, ‘It has been an honor to serve my country and enact pro-growth economic policies to benefit the American people, in particular the passage of historic tax reform. I am grateful to the President for giving me this opportunity…”
CNBC, of course, put a more ominous spin on the day’s events:
“Market watchers saw Cohn’s potential departure as a bad omen for the White House’s economic policy. He helped to shepherd massive tax cuts, the Trump administration’s only major legislative achievement, which the president signed into law in December.”
Significantly, CNBC doesn’t provide the names of these “market watchers.”
The Gary Cohn resignation has long been in the offing
Speculation on an impending Gary Cohn resignation, coupled with surprising but perhaps deviously dovish comments on nuclear weapons from the North Korean dictatorship buffeted the stock market Tuesday. The averages gyrated with increased volatility as bulls, bears, optimists and pessimists all jousted for control over the stock market’s direction.
While a steady, capable economic hand in an administration that’s often as volatile as Wall Street, Cohn was and is a Democrat and a “free trade” globalist. That, rather than anything else underscores the likely reasons for his departure. In any administration, advisors will win a few and lose a few. But Cohn showed his hand today, unable to give up on globalism and sign on to Trump’s decision to upset the economic socialist apple cart.
Trump’s tariff regime, however it’s actually imposed, could finally force Western governments to make their own tough economic decisions. The Eurozone’s own thicket of tariffs imposed against American goods have long prevented much needed internal reforms on the continent.
Trump clearly intends to impose these tariffs to force negotiations on a variety of economic fronts. The President may also impose the tariffs on our NAFTA trading partners, Canada and Mexico, as a way of forcing both countries to negotiate a revised NAFTA more seriously than they’ve done thus far.
Gary Cohn’s departure is likely to rattle markets badly on Wednesday, if early indications in Wednesday’s stock futures are an early clue. Wednesday Dow futures are off a whopping 410 points as of 7:45 p.m. ET Tuesday. But these early numbers can vary considerably overnight and as we approach Wednesday’s opening bell.
Replacements for Gary Cohn?
As for the White House economic team, there’s no word yet on a likely replacement for Cohn, although ZeroHedge
“The two frontrunners, now confirmed by administration officials, are White House Trade Council Advisor Peter ‘Death By China’ Navarro (seemingly the out of nowhere architect of Trump’s trade war plan) and Conservative commentator Larry ‘mothers milk of stocks’ Kudlow (who was on CNBC today defending Cohn and talking down Trump’s trade war plan).”
Navarro is another Harvard product. But he’s also been closely allied with increasingly powerful Commerce Secretary Wilbur Ross. He is also said to be close to Trump son-in-law Jared Kushner. The well-regarded Kudlow, a radio and former TV personality and Reagan advisor, is actually an ivy League dropout (Princeton). But he is well-connected and highly thought of in economic circles.
Another step toward Making America Great Again?
The Goldman Sachs bloc of globalists has manipulated our economic levers long enough. They’ve done so to the detriment of average American working class and middle class employees. The way to Make America Great Again is to move advisory positions out of globalists’ hands and under the control of America Firsters.
It’s true that in the past, unionized workers in the steel and aluminum industries were often their own worst enemies. Their own greed and heedlessness ignored increasingly competitive pressures against their industries by foreign powers and their underpaid workers.
But today, the U.S. is in very real danger of losing these vital, defense critical industries and industrial skills altogether. Trump needs realistic, not ideological economic team members who regard this situation with equal if not greater alarm. Hopefully, a new, more positive series of policies favoring American industry and its workers and producers will be forthcoming.
In the meantime, fasten your seatbelts for another wild ride on Wall Street Wednesday morning.