- Gary Cohn, the former top economic adviser to President Donald Trump, responded on Monday to some of Sen. Elizabeth Warren’s criticism of Wall Street banks and the Trump administration.
- At a Reuters event, Cohn disagreed that the tax cuts enacted earlier this year primarily benefited the wealthy.
- He said Warren’s argument that post-financial-crisis regulations should be tougher was “naive.”
Gary Cohn, the former top economic adviser to President Donald Trump, responded Monday to some of Sen. Elizabeth Warren’s criticisms of the administration’s policy and Wall Street banks.
Warren had repeated during an interview with The New York Times last week that the tax cuts, which Cohn championed, helped corporations save billions of dollars. She said Goldman Sachs had given Cohn a “pre-bribe” when he joined the Trump administration.
Reuters’ Gina Chon, who interviewed Cohn at an event in New York on Monday, asked him to respond to Warren’s argument that banks’ profits show postcrisis regulations should be tougher. Earlier Monday, a report from the New York State comptroller showed that Wall Street’s pretax and inflation-adjusted profits rose to the highest level since 2010.
Warren’s point was “one of the most naive statements I’ve ever heard,” Cohn said, adding, “That’s a nice answer from me.”
Cohn countered that a better way to gauge banks’ profitability was by looking at their return on equity, which gauges how much of shareholders’ money is generating profits. This stood at 12.8% for Goldman Sachs in the second quarter. “They worked their butt off to get to double digits,” Cohn said of his former colleagues.
“‘Return on equity’ is not, I think, in the vocab of a lot of members of Congress,” Reuters’ Chon said.
“Well, then, they shouldn’t be talking about record earnings,” Cohn responded. “By the way, ignorance is not a good defence.”
Cohn also disagreed that the tax cuts that Trump signed into law in January primarily benefited the rich. He said municipal workers like police officers and teachers were the largest class of shareholders, though a New York University research paper showed that a whopping 84% of stocks were still owned by the wealthiest 10% of households.
Cohn also responded to Warren’s call for a return of the 1930s Glass-Steagall regulation that required banks to separate commercial and investment banking. He said there were existing Federal Reserve restrictions on whether banks could use retail deposits to fund their broker-dealer operations.
“I think she taught law at Harvard; I think she shouldn’t need it explained,” Cohn said.
Warren is one of Congress’ harshest critics of Wall Street banks and conglomerates. In the New York Times interview, she accused Amazon of anticompetitive behaviour.
“It’s interesting to watch Washington go after the next industry… and now tech,” Cohn said. “It seems like Washington’s favourite pastime is to pick on success.”
Warren’s office did not immediately respond to a request for comment.
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