Fear: Trump in the White House

Turning to taxes, Cohn said, “The 35 percent corporate tax rate has been great for my business for the last decade. We’ve been inverting companies to 10 percent tax jurisdictions and they pay us enormous fees.” He was speaking as a Goldman president. An inversion refers to relocating a corporation’s legal home to a low-tax country such as Ireland or Bermuda in the form of a new parent company while retaining operations and management as a subsidiary in the higher-tax country.

Goldman had facilitated dozens of companies’ moves abroad. The company’s leaders and boards had a responsibility to shareholders to maximize profits and moving, inverting, dramatically raised earnings. Nearly all the drugmakers and insurance companies had moved.

Cohn bragged, “Where else can I take a company doing X in business that does X tomorrow and has 20 percent more earnings just by changing their corporate headquarters?”

Arguing against Goldman’s self-interest, Cohn added, “We can’t allow that to happen. We’ve got to get our corporate tax in line with the average, which is about 21, 22 percent.”

Though there had been some restrictions imposed by Congress, there were ways to skirt the new laws. “We can’t allow companies to just keep inverting out of the United States. It’s just bad. It’s wrong for business. It’s wrong for jobs. I’m talking against my business. We made a ton of money.”

Trump returned to printing money. “We’ll just borrow,” he said, enamored with the idea of heading the federal government, which had the best credit rating in the world, so they could borrow at the lowest interest rate.

Cohn didn’t mention a report that had come out during the campaign which said the Trump Organization’s business credit score was a 19 out of 100, below the national average by 30 points, and that it could have difficulty borrowing money.

You just can’t print money, Cohn said.

“Why not? Why not?”

Congress had a debt ceiling which set a cap on how much money the federal government could borrow, and it was legally binding. It was clear that Trump did not understand the way the U.S. government debt cycle balance sheet worked.

Inflation would probably be steady. Automation was coming, Cohn said—artificial intelligence, machine learning, robotics. We’ll manage the labor supply more efficiently now than we ever did in the history of mankind. So look, you’re in the most precarious time in terms of job losses. We now can create labor with machines.

“If you’re here eight years, you’re going to deal with the automation of the automobile and truck. About 25 percent of the U.S. population makes a living driving something. Think about that.”

“What are you talking about?” Trump asked.

With the self-driving, autonomous vehicle, millions of people are going to have to reenter the workforce in different jobs. That would be a big change and possible large disruption.

“I want you to come to work for me,” Trump said.

“Doing what?”

Trump mentioned deputy secretary of defense.

“First of all, I don’t want to be deputy secretary of anything,” Cohn said.

How about director of national intelligence?

Cohn indicated no. He was not sure what the job did. He later learned it entailed overseeing the CIA and all the other intelligence agencies.

“You trade commodities,” Trump said. “Why don’t you think about being secretary of energy?”

No interest.

Trump tried to convince Cohn to become director of the Office of Management and Budget.

No. Cohn knew it was a horrible job.

“You know what?” Trump said at the end of what had become an hour-long meeting. “I hired the wrong guy for treasury secretary. You should be treasury secretary. You would be the best treasury secretary.”

Mnuchin, right there, didn’t say a thing or show any reaction.

“Come back and tell me what you want,” Trump said. “You’d be great to have on the team. It’d be fantastic.”

Five minutes later while Cohn was still in the building, he saw a television flash breaking news: President-elect Trump has selected Steve Mnuchin as treasury secretary.

“That’s crazy,” Jared said. “Mnuchin just put that out. You freaked him out so badly in the meeting.”

Cohn did some homework, and spoke with other former Goldman executives who had worked in government. Robert Rubin, who had been head of the White House National Economic Council (NEC) for Clinton and later secretary of the treasury, said that if Cohn could get the director of the National Economic Council job with a pledge he would be the chief economic czar, then he should take it. Being there in the West Wing was an enormous advantage if he had an agreement with the president.

Cohn’s wife, Lisa, said he should do it because he owed the country a great deal. “You’re too slow, you’re too fat and too old to serve your country any other way.”

Cohn returned to see Trump and expressed his interest in the NEC job, as long as any economic business ran through him. It was the equivalent portfolio in economic matters to the national security adviser in foreign policy.