A conversation with former Trump economic advisor Gary Cohn : The Indicator from Planet Money Gary Cohn was President Trump's economic advisor, and a prime mover behind the $2 trillion tax cut of 2017. We talk to him about the state of the economy.

A Conversation With Gary Cohn

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This is THE INDICATOR FROM PLANET MONEY. I'm Stacey Vanek Smith. Today's indicator is between 1- and $3 trillion. That is the amount of additional aid and stimulus Congress plans to distribute in the U.S. to help people and businesses weather the economic impacts of the coronavirus pandemic. Congress goes back to Washington on Monday to battle out the details. So far, lawmakers have proposed plans of between 1- and $3 trillion worth of aid.

Gary Cohn was the economic adviser to President Donald Trump in the first part of Trump's presidency. Before that, he was an executive at Goldman Sachs. While at the White House, Gary was a major force behind the passage of the $2 trillion tax cut back in 2017. Today on the show, we sit down with Gary Cohn and talk policy, economics and, of course, the tax cut.


VANEK SMITH: Gary Cohn was the economic adviser to President Donald Trump until 2018. He was also an executive at Goldman Sachs.

Gary, thank you for joining us.

GARY COHN: My pleasure. Thanks for having me.

VANEK SMITH: So I feel like as a former executive at Goldman Sachs and a former economic adviser to President Trump, you have a really unique perspective on this moment, both kind of a deep knowledge of business and banking, as well as government policy. So I'm curious - as you're looking at the economy right now, like, what do you see?

COHN: You know, right now, we're in a very funny time in our economy because our economy is very linked to what's going on with the COVID virus. We made a conscientious decision in this country to really shut down our economy for the health of the country. And now we're at a point where we're, you know, sort of trying to get our economy back up and running, although the virus continues to, I would say, outsmart us and keeps reappearing in a very fast-moving way in certain parts of the country. And we're having to slow down or stop our natural evolution of our economic activity.

So right now, when you look at our economic activity, you really have to have a view on what's going on with the virus. You know, this is clearly, to me, an extension of the first wave. The question is, are we going to have a second wave, or is the first wave just going to continue through the summer months and into the fall? We don't know. But I think we surely have to be prepared for that.

VANEK SMITH: What do you see as the biggest threat to the economy right now?

COHN: It's jobs. You know, we as a country right now - we have taken a lot of people out of work when we shut down the economy. And if you look at the industries that are most threatened by the inability for people to be close together, if we don't have the ability to bring back the normal travel, leisure and entertainment and restaurant and dining businesses, it's hard to see the unemployment picture in the United States getting much below 10% in the near term.

VANEK SMITH: If you were still advising President Donald Trump on economic policy, what would you advise him to do right now?

COHN: We've got to get the virus stopped. We need an all-hands-on-deck virus stop methodology. That would be the most important thing we could do right now because instead of going through this cycle of stopping and starting and stopping and starting and not being sure where we are in the evolution of the virus, if we could take three weeks off and stop it, I would say, look; we've got to get this stopped. Once we get it stopped, we could then try and re-normalize our economy.

VANEK SMITH: When you were at the White House, you led the effort to pass the big tax cut back in 2017 worth - I think it was, like, around $2 trillion. At that time, of course, the economy was really strong. Unemployment was really low. Companies were doing really well. As we've been speaking about, things have changed a lot. And I was wondering, if you had to do it over again, knowing what you know now, would you still pass the tax cut?

COHN: Look. I think that the tax cuts were very important when we did them, and I still think they're important. So we needed to attract companies back to the United States, and we needed to make sure companies didn't leave the United States because going to other countries was more tax-advantageous to them. And I think the results of that were pretty good. We actually saw companies move back to the United States. And with that, you see employment. You see job growth.

VANEK SMITH: I mean, it does seem like the government could use the $2 trillion right now, though.

COHN: Well, remember, the $2 trillion is a - it wasn't quite 2 trillion. And that's a 10-year number. That's a number over 10 years.

VANEK SMITH: So you think the country is in better economic shape now because of the tax cuts than it would've been if they had not happened.

COHN: Yes, I would say that the country was in a very good economic position and very fit economically going into the crisis.

VANEK SMITH: Now I don't think anyone would call the economy fit. And I would love to ask you about this question that's been coming up a lot recently of the fiscal cliff, which is the moment when the expanded unemployment benefits will expire for millions of Americans. There's a lot of pressure for Congress to extend those benefits, but also, there's a lot of pressure to sort of maybe get the financial house in order. And I'm wondering, like, what are your thoughts on the fiscal cliff? And, like, how do you think that would best be handled?

COHN: I do think that the federal government is going to have to come back with another substantial stimulus package because when they did the first package, all of the experts were saying that the coronavirus would subside during the summer months, and then we'd have to worry about the fall. Well, that prediction has not really worked out. The virus has stayed strong, unfortunately, through the summer months. And we're going to have to continue to throw money at American households that are unable to work, even if they want to work, because we're shutting down or we have continued to close much of the economy.

VANEK SMITH: And I just wanted to change direction a little bit because when you were in Washington, you were really known as this champion of free trade. And I think you had a nickname that was, like, Globalist Gary. Is that right?

COHN: Yep. Absolutely. Yep.

VANEK SMITH: I mean, obviously, the Trump administration moved in a different direction with free trade. But I'm wondering, like, what do you see as the role of trade now and maybe going forward?

COHN: So I did think, I continue to think and I will continue to think that free trade is very important for the United States and very important for the globalized world. And we are part of a globalized world. If nothing else, a pandemic explains to you how we're in a globalized world, how a disease does not need a visa.

You know, we've always talked about national security in the United States. I think now we have to talk about national resiliency. How much can we care for ourselves when it comes to really basic things? How secure is our food supply? You know, how secure is our medical equipment, medical supplies, drugs, you know, PPE? How secure is our PPE? We're going to have to think about manufacturing more of these things and protecting the supply in the United States and stockpiling supply.

That doesn't mean, though, we're not going to import. We're going to need to import more of the nonessential things - things that we want to buy, not things that we have to have or have to manufacture here. So I'm going to continue to champion us in the United States as being part of a global economy. It would be great to get to a point where we could be the PPE manufacturer for the world so not only do we manufacture enough for ourselves; we can manufacture enough to export.

VANEK SMITH: This has been such a pleasure. I really want to thank you for talking with us today.

COHN: My pleasure. Thanks for making the time.

VANEK SMITH: This episode of THE INDICATOR was produced by Camille Petersen, fact-checked by Brittany Cronin. THE INDICATOR is edited by Paddy Hirsch and is a production of NPR.


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