Bloomberg News
Gary Cohn, former director of the National Economic Council.

President Trump’s former national economic director knows his former boss follows the stock market very closely. He just doesn’t think Trump holds much sway over it.

Stephen Dubner of the Freakonomics podcast asked Gary Cohn about how much influence Trump has over the stock market:

DUBNER: All right. How about on the count of three, we both say a number, one to 10, how influential we think the president is overall, stock market. All right. I’m going to think of my number. You got your number?

COHN: Yeah. I got my number.

DUBNER: OK. One, two, three.

COHN: Four.

DUBNER: Three.

Since Trump stepped into the office, the total return for the S&P 500 SPX, -0.14% has been about 30%.

In a discussion over the Fed’s switch in its interest-rate outlook, Cohn seems to have some doubt that Jerome Powell is independent from Trump’s persistent criticism.

“I’m going to hope it wasn’t,” Cohn said. “I’m going to hope that Jay Powell and the Fed governors, in seeing all of the data they see — I mean, they’ve got more Ph.D. economists than anyone else. They talk to all the companies in the world and the United States, and the regional Fed system is designed to bring them real-time data from the local economies. I surely hope, and I almost pray, that what the Fed did was in reaction to what they were seeing in the data, that they felt that there was an actual slowing of the economy and they were in the wrong place.”

Other highlights:

• Cohn said he and Treasury Secretary Steven Mnuchin were holding the line on corporate tax rates as the Tax Cuts and Jobs Act was drafted. Cohn said Trump was willing to go higher. The corporate tax rate ended up being set at 21%.

• Cohn said that it’s too early to judge the results of the TCJA but that there are encouraging signs, including that GDP grew nearly 3% and that wage growth has been accelerating as job growth has continued. “We gave companies 100% of capital-expenditure expensing for the first five years, trying to get companies to make a long-term investment in the U.S. economy. And all we’re hearing right now is how U.S. companies aren’t paying taxes because they’re using that opportunity to invest in capital to manage their tax rate down. That is going to pay dividends for the next 20, 30 years.”

• Cohn said he and the president still talk. “We usually talk about the economy. Sometimes about personnel.”

• He said the U.S. was “desperate” for an agreement in the China trade talks. “Getting the intellectual property, the forced technology transfer and the market access — much more difficult. I think market access, the Chinese will give because they’ve been close to giving it for a while. But how are we going to stop the Chinese from stealing intellectual property or not paying for it? How are we going to stop them from copyright infringement? What is the enforcement mechanism, and what are the punitive damages if they don’t stop?”

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