For a while there, Gary Cohn seemed like a pretty decent bet to become the next Federal Reserve chair—but apparently no longer. According to the Wall Street Journal, President Trump has become significantly less enamored with his chief economics adviser ever since Cohn decided to sound off on the administration’s response to the white supremacist rally in Charlottesville, Virginia—which could end up costing him his shot at the central bank gig.
Cohn, who leads Trump’s National Economic Counsel and was previously the president of Goldman Sachs, was technically charged with leading the search for a new Fed chair to replace Janet Yellen, whose term expires next year. But from all outside appearances, the man seemed poised to pull a Dick Cheney and claim the job himself. “He doesn’t know this, but yes he is [a candidate]” Trump said in July, after the WSJ’s editors asked whether Cohn might be in line for the job (like heck he didn’t know). This was somewhat discouraging, since Cohn—who spent much of his career as a trader at Goldman—lacks many of the basic qualifications you typically want in a Fed chair, such as a background or even an obvious interest in monetary policy or economics.
But then came the moral and political calamity of Charlottesville. After Trump’s gobsmacking attempt to blame both torch-bearing white nationalists and anti-fascist counterprotesters—one of whom was killed—for the weekend’s violence, Cohn, who is Jewish, decided to speak up. Or, at least, he tried to explain to the Financial Times why he wasn’t leaving his job in protest while assuring his respectable financial world friends that, yes, he was adequately disgusted by the White House’s response.
“Citizens standing up for equality and freedom can never be equated with white supremacists, neo-Nazis, and the KKK,” Cohn told the paper. “I believe this administration can and must do better in consistently and unequivocally condemning these groups and do everything we can to heal the deep divisions that exist in our communities. As a Jewish American, I will not allow neo-Nazis ranting ‘Jews will not replace us’ to cause this Jew to leave his job.”
Oops. According to the WSJ’s sources, Trump “wasn’t aware such a blunt critique was coming” and now “visibly bristles at the mention of his economic adviser.” Cohn might be able to redeem himself by securing a tax reform deal with Congress, an effort he’s managing for the White House. But it’s also possible that his limp attempt to maintain some semblance of dignity while continuing to work for an administration that has an obvious affinity for white supremacists has backfired.
For those trying to figure out the future of American monetary policy, this means Yellen’s chances of being reappointed to the job just shot up. In the scheme of things, this is probably a good policy outcome. But it’s also a reminder that, even when it comes to picking the world’s most important central banker, personal loyalty trumps all.