Cohn in His Own Words: Views of Top Trump Pick for Economic Post

What's Next for Goldman Sachs If Gary Cohn Leaves?

Goldman Sachs Group Inc. President Gary Cohn is said to be President-elect Donald Trump’s top choice to lead the National Economic Council, the White House panel that coordinates and develops economic policy. Here are comments Cohn, 56, has made in recent years about economics, regulation and leadership:

Central Bank Guidance

“This idea that central banks around the world have to give very clear very, very definitive forward guidance has gotten the markets very confused. In some respects, if central banks would go back to being central banks, and really worry about what’s going on in the economy and do what they think they need to do, instead of spending all their time talking about what they’re going to do, we’d probably all be in a lot better position. When central banks spend all their time talking about what they’re going to do, they either have to do it, or they disappoint.” -- March 2016

Unemployment Statistics

The published U.S. unemployment rate “is a very, very fictitious rate. It’s only that low because the participation rate has gone downward...”

“The participation rate really measures people out in the U.S. population that are looking for jobs. There are so many people who are frustrated looking for jobs that they’ve just stopped. If the participation rate normalized -- this is a fun fact -- if it normalized to Day 1 of the Obama administration, we’d still be at an 11 percent plus unemployment rate.” -- July 2015

On how cheap U.S. energy can spur domestic manufacturing

“We have some real competitive advantages to the world... When you take that big component of energy and you throw that into the U.S. economy we should be bringing jobs back. We should be becoming the manufacturing capital of the world. That will happen. It’s going to happen slowly. And it’s going to be dragged by consumer demand. People won’t build a plant to manufacture something if they don’t think they can sell it.” -- June 2013

Financial Regulation

“I seem to be in Washington every week, trying to explain to them the unintended consequences of over-regulation.” -- July 2015

“Liquidity provided by the central banks is now being trapped into the banks because of the increasing capital and regulatory requirements... We have to fix the transmission mechanism to allow job creation.” -- October 2015

How Bank Capital Rules Hurt Growth

“It used to be that banks were the transmission mechanism for the global economy. And what I mean by that is that you had the Federal Reserve over here (signals with right hand) and you had consumers, or households, over here (signals with left hand). The Federal Reserve would decide to get the economy growing -- prime the pump, get people spending, get people investing. They would loosen up monetary supply, they would add money to the system, they would do that by giving it to the banks. They would, in turn, on-lend that to their customers...”

“Now, when the Federal Reserve tries to introduce more liquidity into the system to grow the economy, which they’ve been doing for the last four years, simultaneously they’re telling the transmitter, ‘You need to hold more capital. You need to be safer. You need to be more secure.’ So we’re giving you money over here (signals with right hand), and instead of us lending it out over here (signals with left hand) and growing the economy, we just hoard it.” -- July 2015

Taxes and Startups

“When you’re in small, startup enterprise businesses you’re all about execution, execution, execution. You don’t start worrying about taxes until you’re profitable.” -- June 2013

Currency Wars

“We’re in currency wars.” (He then pointed Japan and Europe.) -- January 2015

“It’s concerning to me because it’s a never-ending cycle. If you’re out there devaluating your currency and you’re forcing me to devalue my currency, how do you stop this game? And the flip side of it, we in the United States are having to learn to live with a stronger and stronger dollar, not necessarily because we have got a stronger and stronger economy.” -- February 2015

China’s Economic Importance

“As the world is looking for a leader in growth, it can’t just be the United States that leads growth, it’s also got to be China as well.” -- May 2016

China’s Planned Economy

“Everything that has happened in China in the last 30 years has been projected by the Chinese. They talked about building the infrastructure, they talked about inhabiting the cities, they talked about creating consumer discretionary spending, they talked about liberalizing the stock market, they talked about liberalizing the real estate market, they talked about creating access. Would outside investors like that to happen quicker? Of course they’d like it to happen quicker. Is it going to happen quicker? No. Are the Chinese very methodical about what they are doing? Of course they are. Are they going to get to the right place? I do believe they will get to the right place in the world.” -- May 2016

Learning to Lead

“Where you get your leadership skills is pushing the edge, pushing the envelope, falling flat on your face, picking yourself up and saying, ‘OK, I got it, I’m not going to do that again.”’ -- July 2015

Leadership in Crises

“In those times of crisis, in those times of dislocation, people need to be led. They need to see that you’re OK. They need to see that you’re fine. They need to see that you’re talking about the future, that you’re not concerned, that you’re doing all the normal things that you would do in a normal period of time...”

“You can have doubts in your mind, because you’re only human to have doubts. But the people you’re leading can’t think you have doubts.” -- July 2015


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