Gary Cohn spent two decades working for Goldman Sachs before joining the Donald Trump White House, allowing him to see how power can be used within both the private and public sectors. In an interview conducted as part of the ISRI2012 online convention, he said to recyclers, “I hope the government creates an environment that incentivizes you all to make major investments in your businesses.”
Cohn was interviewed by Gary Champlin, current chair of the Institute of Scrap Recycling Industries (ISRI), who also owns Champlin Tire Recycling of Concordia, Kansas.
Before rising through the ranks of Goldman Sachs, Cohn said he worked for his father’s electrical contracting business in Cleveland, where he quickly learned about the value of copper scrap by watching electricians and warehouse workers debate over who would receive the return on scrapped items.
In New York, Cohn contributed to building up the commodities business of Goldman Sachs. Alluding to the intricate supply and demand balance of the commodities processed and traded by ISRI members, Cohn remarked, “If you ever want to learn about a fundamental market, just look at the commodities”
The former banker, trader and White House adviser, who now serves as a vice chair with Armonk, New York-based IBM, said the notion of commodities heading for a second “super cycle” is not out of the question. “Renewed interest in infrastructure, if this all goes forward as we think it may, is going to [create] enormous demand for commodities, which will put us into a super cycle.”
Of his White House days, Cohn confirmed that the Trump economic team often was divided between those highly supportive of tariffs and those (like him) who wanted to be much more selective in their use.
While not an avid protectionist himself, Cohn did state, “The state-owned enterprises in China subsidize their companies, their cost of capital is low, their environmental protections are low—none of that stuff is false.” He added, though, “If someone else can produce a good or a service cheaper than we can, it’s actually beneficial for our economy to import that good or service. [Then], our American citizens will buy that good or service at a cheaper price point, and they’ll have more disposable income to buy what we produce domestically.” (This includes services and entertainment, he commented.)
Cohn said despite the many changes introduced by Joe Biden in his first 100 days, very few of them have involved rolling back tariffs. “It feels to me the Biden administration is going to be very similar [in its actions toward China] as the Trump administration,” he remarked. “They’re just going to do it very quietly; they’re not going to talk about it or rabble-rouse about it.”
Although infrastructure appears to provide an arena where the Biden administration can introduce even more metals demand into the economy, Cohn expressed caution about the impact of such legislation. Beyond the issue of “how to pay for it,” said Cohn, is a decades-old divide on permits for bigger projects. “The federal government owns the permitting process, but states and cities own the infrastructure. It’s not a mutual alignment of interests,” he remarked.
Cohn defended the Trump 2017 tax plan—saying it was far from a flat-out “tax cut for the rich” as portrayed by Democrats—and urged those in power to create or maintain “a tax policy that encourages investment, because investment creates jobs and job opportunities.”
Coming out of the pandemic, Cohn said the abrupt shifts in behavior benefitted the nation’s largest companies at the expense of many small business owners. “The biggest issue we have in the United States is the re-creation of small business. We need to bring back the ones that got wiped out during the pandemic.”
Before Cohn’s interview, ISRI recognized its two Lifetime Achievement Award winners for 2021: David Borsuk of Fond du Lac, Wisconsin-based Sadoff Iron & Metal, and Shelley Padnos of Holland, Michigan-based Padnos.
Padnos thanked her family and colleagues and noted she was the first and remains the only female national ISRI officer, calling it a situation “I hope we can change; we have barely managed to crack that glass ceiling.” She said to fellow ISRI members, “Think about your teams and look closely at them. Please make a conscious effort [to diversify]. This kind of change will only happen with conscious effort.” Padnos pointed to current ISRI President Robin Weiner as an example of the good that can arise.
Borsuk thanked his “entire ISRI family” and his “work family at Sadoff Iron & Metal.” He recounted attending the first ISRI Safety Summit and said he came away retaining as his credo that “priorities change; values don’t, and safety is a value we all must hold.”