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Gary Cohn is suddenly the most important person in Washington and on Wall Street

  • As corporate America distances itself from President Trump, all eyes are on Gary Cohn to see if he'll stay at the White House.
  • Cohn is the key remaining connection the administration has to the pro-business, pro-investment world.
  • The White House said on Thursday that National Economic Council Director Gary Cohn is "focused on his responsibilities...Any reports to the contrary are 100% false."

The continuing controversy over President Donald Trump's response to the Charlottesville protests has produced one very intriguing development: It's made Gary Cohn the most important person in Washington, Wall Street, and maybe the entire country. In short, President Trump needs his chief economic adviser to stay on the job.

That's because if this administration wants to keep any kind of formal or informal policy support from American business and investment leaders, Cohn is the key to it all. That explains why Wall Street is so focused on Cohn and his job status right now.

It's important to note that there's no solid evidence Cohn is considering leaving for the same reasons so many CEOs resigned from the president's manufacturing council, or any other reason for that matter. But reports say Cohn was extremely upset by President Trump's response to Charlottesville. And another former administration official told Reuters that Cohn is, "worried about his reputation being trashed, which is much more valuable to him than anything else."

That makes a lot of people nervous. If Cohn leaves, it seems inevitable that his departure would cause a stock selloff and perhaps even "crash the markets" as Yale School of Management's Jeffrey Sonnefeld told CNBC on Wednesday.

That's a heck of a consequence Cohn has in his pocket not only for job protection but also job promotion. Indeed, the White House said on Thursday that National Economic Council Director Gary Cohn is "focused on his responsibilities...Any reports to the contrary are 100% false."

Beyond the stock market, Washington is keenly focused on Cohn as well. That's because more than most people who have held his job title in past administrations, Cohn is playing a major role in promoting key White House policies. That's especially true on tax reform, where just this week Cohn was pushing the notion that big changes in the tax code can happen by Thanksgiving.

Washington is also watching to see if this will boost Cohn's influence on other policy matters still being debated by the Trump team, like trade policy. Cohn has been pushing against the harsh trade restrictions and retaliations against China that others in the administration, led by Chief Strategist Steve Bannon, favor.

In fact, Bannon told the American Prospect in an interview published Wednesday that he clashes with Cohn on China policy often. If keeping Cohn is such a priority, and Bannon continues to be a liability, the D.C. and corporate establishment will breathe a big sigh of relief if that means Cohn's establishment-friendly economic and trade policies will win out.

None of this means Cohn is some kind of bipartisan hero. His take on tax rate reform is certainly popular in traditional business, Republican, and even many moderate circles. But conservatives are still wary of his support for environmental policies like the Paris Accords and possible endorsement of carbon taxes. And the rising progressive power source in the Democratic Party is certainly not his ally on tax policy priorities or much else. Keeping Cohn in the fold is more about the Trump team shoring up any semblance of the establishment's acceptance, if not support, of this administration.

But in the end, the most compelling reason Cohn is so crucial is the fact that President Trump is focused on and proud of the stock market gains since his election. It's a regular theme in many of his comments and the kind of sustained losses that could stem from Cohn's departure would be a powerful blow to the president's self-image.

If those concerns aren't enough to get President Trump to re-clarify his comments on the Charlottesville protests and Confederate statues, or at least decide to cease commenting on those issues altogether, then nothing probably will. And if that's the case, this presidency has even bigger problems.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

For more insight from CNBC contributors, follow @CNBCopinion on Twitter.

Director of the White House National Economic Council Gary Cohn.
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Director of the White House National Economic Council Gary Cohn.