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Gary Cohn calls Elizabeth Warren’s attacks on banks “naive”

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Gary Cohn
Gary
Cohn doesn’t think tax cuts primarily helped the
rich.

REUTERS/Ruben
Sprich


  • Gary
    Cohn
    , the former top economic adviser to President Donald
    Trump, responded to some of Sen. Elizabeth Warren’s criticism
    of Wall Street banks and the Trump administration on
    Monday. 
  • At a Reuters event, Cohn disagreed that the tax cuts enacted
    earlier this year primarily benefitted the wealthy. 
  • He also said Warren’s argument that post-financial-crisis
    regulations should be tougher was “naive.”

Gary Cohn, the former top economic adviser to President Donald
Trump, responded Monday to some of Sen. Elizabeth Warren’s
criticisms of the current administration’s policy and Wall Street
banks.  

Warren repeated during an interview with
The New York Times
last week that the tax cuts, which Cohn
championed, helped corporations save billions of dollars. She
also said Goldman Sachs had given Cohn a “pre-bribe” when he
joined the Trump administration.

Reuters’ Gina Chon, who interviewed Cohn at an event in New York
on Monday, asked him to respond to Warren’s argument that banks’
profits show post-crisis regulations should be tougher. Earlier
Monday, a report from the New York State comptroller showed that
Wall Street’s pretax and inflation-adjusted profits rose to the

highest level since 2010
.

Warren’s point is “one of the most naive statements I’ve ever
heard,” Cohn responded. He added, “that’s a nice answer from me.”

Cohn countered that a better way to gauge banks’ profitability is
by looking at their return on equity, which gauges how much of
shareholders’ money is generating profits. This stood at 12.8%
for Goldman Sachs in the second quarter. “They worked their
butt off to get to double digits,” Cohn said of his former
colleagues. 

“Return on equity is not, I think, in the vocab of a lot of
members of Congress,” Reuters’ Chon said. 

“Well then they shouldn’t be talking about record earnings,” Cohn
responded. “By the way, ignorance is not a good defense.”

Cohn also disagreed that the tax cuts Trump signed into law in
January primarily benefitted the rich. He said municipal workers
like police officers and teachers were the largest class of
shareholders, although a New York University
research paper
shows that
whopping 84% of stocks is still owned by
the wealthiest 10% of households. 

Cohn also responded to Warren’s call for a return of the 1930s
Glass-Steagall regulation that required banks to separate
commercial and investment banking. He said there were existing
Federal Reserve restrictions on whether banks can use retail
deposits to fund their broker-dealer operations. 

“I think she taught law at Harvard, I think she shouldn’t need it
explained,” Cohn said. 

Warren is one of Congress’s harshest critics of Wall Street banks
and conglomerates. In the New York Times interview, she
accused Amazon of anti-competitive behavior

“It’s interesting to watch Washington go after the next industry
… and now tech,” Cohn said. “It seems like Washington’s
favorite past-time is to pick on success.”

Warren’s office did not immediately respond to a request for
comment. 

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