When Cohn joined the Trump administration, many corporate executives were relieved, seeing him as a steadying influence.
.. Now, unfortunately, both Cohn and Mnuchin are endangering their reputations in their attempts to sell a tax cut.
.. Within the administration, there are real differences among how top officials have behaved and how they are perceived. Several — Tom Price, Reince Priebus, Sean Spicer and Rex Tillerson — have badly sullied their standing with virtually everyone outside the administration. After long careers, they have turned themselves into punch lines.
.. The clearest exception is Jim Mattis, the defense secretary. Mattis has done so partly by avoiding scandal and minimizing conflicts with Trump. But he has also been careful to set his own ethical boundaries. Can you recall a single time when Mattis has said something outright untrue? I can’t. That’s how he has retained his dignity in the eyes of so many people.
.. In the early stages of promoting Trump’s tax cut, they have made a series of statements that are blatantly false — not merely shadings of truth or questionable claims but outright up-is-down falsehoods mocked by various fact-checkers. The statements make the two look more like Trump press secretaries than serious business executives whom members of Congress can trust.
.. They fall into two main categories. The first is who benefits from the tax plan. “Wealthy Americans are not getting a tax cut,” Cohn said on “Good Morning America.” He was echoing a promise that Mnuchin had made before the inauguration: “Any reductions we have in upper-income taxes will be offset by less deductions, so that there will be no absolute tax cut for the upper class.”
.. Want to guess how many families in New York State — population 20 million — are wealthy enough that they’re likely to pay any estate tax next year, according to an estimate based on I.R.S. data? Just 470. The number is so low in Montana, Vermont, West Virginia and four other states — likely fewer than 10 families in each — that the I.R.S. doesn’t provide details, to avoid privacy concerns.
.. Then there are the two men’s deficit claims. “This tax plan will cut down the deficits by a trillion dollars,” Mnuchin said. Cohn claimed that “we can pay for the entire tax cut through growth.”
.. The Harvard economist Greg Mankiw coined the phrase “charlatans and cranks” specifically to describe people who claim that tax cuts pay for themselves. And Mankiw is a conservative who’s worked for George W. Bush and Mitt Romney.
.. Neither one of them has yet turned 60 years old. These won’t be their last jobs.
Loyalty to Trump isn’t enough
Trump demands not just loyalty but flattery, too. He insists that his courtiers treat his pronouncements, however absurd or offensive, as infallible holy writ. Members of his Cabinet have made a humiliating bargain: humor him, suck up to him, and maybe — just maybe — he will leave you alone and let you make policy.
.. Trump demands not just loyalty but flattery, too. He insists that his courtiers treat his pronouncements, however absurd or offensive, as infallible holy writ. Members of his Cabinet have made a humiliating bargain: humor him, suck up to him, and maybe — just maybe — he will leave you alone and let you make policy.
.. Retiring Sen. Bob Corker (R-Tenn.), chairman of the Foreign Relations Committee, encouraged Tillerson to stay on because he, Defense Secretary Jim Mattis and White House Chief of Staff John F. Kelly “are those people that help separate our country from chaos.”
.. other Cabinet members have made their peace with the Sun King’s demand for unctuous deference. Treasury Secretary Steven Mnuchin looked as if he were in physical pain as he went on the Sunday shows and defended Trump’s demand for NFL players who kneel during the national anthem to be fired.
Chief economic adviser Gary Cohn, who almost quit after Charlottesville, told reporters he stayed on for the “once-in-a-lifetime opportunity” to enact sweeping tax reform.
.. What these officials don’t seem to fully grasp is that their policy initiatives can be undercut by the president at any time, and probably will. Look at budget director Mick Mulvaney, who has big ideas about shrinking government and the deficit. He didn’t anticipate having to wipe away Puerto Rico’s debt, which Trump offhandedly promised to do.
Republicans, Trapped by Their Flimflam
Last week the Trump administration and its congressional allies working on tax reform achieved something remarkable. They released a tax plan — or, actually, a vague sketch of a plan — that manages both to add trillions to the deficit and to raise taxes on a large fraction of the population.
.. The road to this tax-cut turkey began in 2010, when Paul Ryan — now speaker of the House — unveiled the first of a series of much-hyped budget plans, all purporting to offer a blueprint for eliminating the U.S. budget deficit.
In fact, they did no such thing. They proposed major tax cuts — primarily benefiting the rich, of course — then simply asserted that no revenue would be lost, because reduced tax rates would be offset by closing loopholes and eliminating deductions. Which loopholes and deductions? Ryan didn’t say.
.. In other words, it was all a con.
.. Professional “centrists,” whose whole identity is bound up with pretending that there is equivalence between the two parties, desperately wanted a Serious, Honest Conservative to praise. So did much of the news media. So they slotted Ryan into that role, never mind the actual content of his policies.
.. After all, their supposed concern about federal debt was always just a pose, applying only when a Democrat was president.
.. But after all those years of pretending to be deficit hawks, they feel the need to be seen doing something to offset their high-income tax cuts, to close some loophole somewhere.
.. According to the nonpartisan Tax Policy Center, their plan would give huge tax cuts to the top 1 percent, who would receive 79.7 percent of the benefits. But eliminating deductions would make many Americans, especially in the upper reaches of the middle class, directly worse off:Almost 60 percent of households between the 80th and 90th percentiles of the income distribution would face tax increases... How are the tax plan’s advocates responding to their very big, very bad problem? Partly with evasiveness: You can’t evaluate our plan yet, declared Mick Mulvaney,.. And partly with outright, ludicrous lies: “Wealthy Americans are not getting a tax cut,” declared Gary Cohn.. In broad outlines, the tax story is a lot like health care. In both cases, Republicans have spent years getting away with big promises backed by lies. Now, with real policy to be made, the lies won’t work anymore.Comments
I live in a high-tax state and county, and my family earns enough income that I am fairly sure we would pay more federal tax under this plan. I would be fine with that if it were used to benefit those who have less than us. Pay teachers more, expand healthcare, create a bunch of jobs in places with few, whatever. I would pay a lot more to make our country a better place for everyone. Unfortunately, this plan would take those extra dollars and obscenely direct them to people who already have so much they could never spend it all. It’s unconscionable and shameful. Which is what we sadly have come to expect from the Republican party.
.. The basis of the Republican position on health care and taxes is “Trust me”. Well, based on experience we can’t and shouldn’t.
Given we have a “businessman” in the White House, if any group of executives proposed programs in the same vein as the Republicans have proposed healthcare and tax reform they would be fired. No board of Directors would accept business plans that are based on fictitious economic theory, increase debt to incalculable levels and hurt their core customers (constituents) where is really counts, in their pocketbooks
Who Will Be Trump’s Pick to Lead the Fed? We Asked Experts to Rate the Odds
Ms. Yellen has a possibility of being renominated, according to this consensus, but it is only 22 percent; experts think that Kevin Warsh, a former Fed governor with deep Republican ties, has a slightly better chance at 23 percent.
.. The case for renominating Ms. Yellen is straightforward.
She has presided over four years of steady economic expansion and rising financial markets. She moved cautiously toward raising interest rates even though the economy seemed to be approaching full employment. By contrast, some more conservative contenders for the job have indicated they want to raise rates more quickly, which could endanger the economy as President Trump approaches midterm elections in 2018 and a potential re-election battle in 2020.
.. Moreover, as President Trump dabbles in making deals with Democrats, reappointing Ms. Yellen could serve as an expression of good faith to Democratic senators. As administration officials focus on tax legislation and other priorities on Capitol Hill, it might be helpful to them to nominate someone who might sail through confirmation, rather than demand a bruising, time-consuming battle.
.. The case against Ms. Yellen is similarly straightforward: She is a liberal economist in a government dominated by conservatives. She is a cerebral academic serving during the presidency of a bombastic businessman. And she is a staunch defender of the work the Fed and other bank regulators have done to try to limit risk in the financial system — including in a high-profile speech last month — amid an administration focused on deregulation.
Kevin Warsh: well connected, but with baggage
He has a law degree, but no advanced degree in economics.
.. Mr. Warsh has been a skeptic of the Fed’s efforts to boost the economy through quantitative easing and has advocated raising interest rates more quickly. He also has a regulatory philosophy more in line with the administration’s.
.. Mr. Warsh’s father-in-law is Ronald Lauder, of the Estée Lauder cosmetics fortune, a major Republican donor with longstanding ties to Mr. Trump.
.. If Mr. Warsh is nominated, expect significant blowback during the confirmation process from Democrats, who are likely to accuse the 47-year-old Mr. Warsh of being underqualified, of being responsible for the 2008 bank bailouts and inclined to regulate banks too lightly now, and of being too overtly political for the traditionally nonpartisan Fed chairmanship.
.. Democrats would be eager to criticize the administration for naming a recent top executive at Goldman Sachs to be the nation’s most powerful financial regulator. Some populist Republicans might join them... Foremost among them are several of the names we would probably be hearing about if a conventional Republican president were in the White House.. John B. Taylor is a respected economist at Stanford who worked in the George W. Bush administration and has been an influential voice among congressional Republicans who want to see the Fed bound by stricter rules governing its actions.Glenn Hubbard was a top economic adviser to Mr. Bush who is dean of Columbia Business School.
Larry Lindsey was another top adviser to Mr. Bush and a former Fed governor with an economics doctorate from Harvard.
.. Their doctorates and affiliations with top universities may actually be downsides in an administration that has shown disdain for academic expertise.
.. other names has emerged in various reports, including the F.D.I.C. vice chairman Thomas Hoenig and John Allison