ReutersBy Gina Chon
WASHINGTON, Aug 17 (Reuters Breakingviews) - Gary Cohn is facing the most difficult investment dilemma of his career. The former Goldman Sachs president helped steer the bank to safety during the financial crisis. Now he's under pressure to abandon President Donald Trump, whom he serves as chief economic adviser. Remaining could hurt his reputation, but he's been a moderating influence on trade and he's also a point man on tax reform. Losing his Wall Street savvy would further damage the White House - and the country.
Cohn built his career at the fast-paced trading desks of Goldman, where risk is often calculated in seconds. As No. 2 during the economic meltdown, he helped lead the bank in preparing for the mortgage market's decline as competitors were bulking up on those assets. Goldman still needed a $5 billion infusion from Warren Buffett'sBerkshire Hathaway but it survived in better shape than its competitors, some of whom disappeared.
Cohn is now under pressure to quit after the president on Tuesday doubled down on blaming both sides in a white-supremacist rally in Virginia that turned violent. Cohn, who is Jewish, was offended by Trump's remarks, people familiar with the matter told Breakingviews. Several former colleagues have urged him to resign before his reputation takes an unrecoverable hit. Many of his former clients abandoned the president's CEO advisory councils earlier this week because of Trump's remarks.
Investing further time with the Trump administration, or cutting bait now, is arguably the toughest binary call Cohn will ever make. It will affect not only his future and a possible chairmanship of the Federal Reserve, but the direction of the country as well. He's made his name deftly assessing risks but the stakes have never been higher.
CONTEXT NEWS
- Some White House aides are weighing whether standing by President Donald Trump is worth the risk to their reputation, Reuters reported on Aug. 16. The assessments come after Trump on Aug. 15 reiterated his blame on both sides for a white-supremacist rally in Virginia that was confronted by counter-protesters, one of whom was killed. Trump said not all of the participants were members of the Ku Klux Klan or neo-Nazis and some of them were "very fine people."
- After those comments, many corporate chief executives on two White House advisory councils began resigning from the groups, including 3M'sInge Thulin and Campbell Soup'sDenise Morrison. As the CEOs were quitting, Trump announced on Aug. 16 he was disbanding the two groups. Merck CEO Kenneth Frazier was the first to resign on Aug. 14 after the Virginia event on Aug. 12.
- Cohn "intends to remain in his position as NEC director," according to a mid-morning statement from a White House official on Aug. 17.
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