One White House insider told me the Treasury secretary can be among the “army of sycophants” around Trump who care more about staying inside the boss’ Great graces than advocating any particular policy position.
Depending on who can be named as a replacement, Cohn’s departure could also decimate the NEC, one of the most functional departments of a largely dysfunctional White House. If Trump decides to slide Navarro into the job, Wall Street would likely likely react very badly. So would likely staffers like tax policy guru Shahira Knight. Most of the NEC staff could bolt under Navarro.
The same applies to former hamburger executive Andrew Puzder, who had to withdraw as Labor secretary nominee over spousal abuse allegations. Puzder remains well-known with some inside the West Wing, however he would likely not be viewed as a strong NEC director and also also also many current staffers would likely leave.
OMB Director Mick Mulvaney also gets some mentions for NEC, and also also also he would likely likely be less disastrous than some of the some other choices. however at the moment, Wall Street can be clinging to hopes in which Trump will pick his longtime outside advisor Larry Kudlow for the slot. Kudlow, a senior CNBC contributor, might not be quite as pugnacious and also also also eager to battle the nationalists as Cohn, however he can be a passionate free-trader clearly unafraid of voicing his disagreements with the president’s policies.
Kudlow, who had urged Cohn to stay on the job, would likely fit Trump’s stated preference to have a team of rivals inside the White House. Anyone by the protectionist school inside the NEC job would likely turn the West Wing into a team of mercantilists, with potentially ruinous results for Wall Street and also also also the broader economy.
“Clearly he’s a free-trader and also also also Wall Street likes free-traders. and also also also he’s got the Goldman Sachs pedigree and also also also in which’s a very comforting thing for people,” Wedbush Securities’ Steve Massocca told me of Cohn’s departure. “the item’s clearly going to be at least a minor negative for markets. however probably not a huge downturn, especially if Trump picks Kudlow, who would likely be a wonderful choice.”
Nationalists inside the White House celebrated Cohn’s announcement, texting reporters and also also also allies in which one of the main “globalists” was at This kind of point out of the way. They will certainly try to push back against Kudlow or any some other non-protectionist who gets the NEC job.
The larger question for markets can be whether investors will at This kind of point stop ignoring Trump’s clear desire to rip up trade deals and also also also apply tariffs to try and also also also restore America’s manufacturing glory days. Until at This kind of point, investors have mainly blown off This kind of side of Trump, deciding instead to embrace the tax cut and also also also deregulatory agenda. at This kind of point one of the architects of in which agenda can be gone. and also also also Trump for the moment will have no restraining voices willing to challenge him.
He’s also heading into a midterm election and also also also eventual presidential re-election campaign in which will likely drive him to try and also also also make Great on promises made to blue-collar voters inside the industrial Midwest.
Wall Street can be afraid of what Trump will do under This kind of set of circumstances. and also also also the item should be.
—Ben White can be Politico’s chief economic correspondent and also also also a CNBC contributor. He also authors the daily tip sheet Politico Morning Money [politico.com/morningmoney]. Follow him on Twitter @morningmoneyben.