Bannon's ouster a big win for Gary Cohn and Wall Street

  • Steve Bannon's ouster means Gary Cohn has won a major power struggle at the White House.
  • Cohn became more crucial for Trump's political fortunes, and Bannon was a growing liability.
  • But Trump may still embrace populist causes and policies.

Now that Chief Strategist Steve Bannon is out at the White House, it means one thing: Gary Cohn has won.

But it doesn't necessarily mean the policies Cohn espouses will win out too.

Cohn, the White House chief economic adviser, and suddenly the most important man in Washington, has clearly won out over the increasingly controversial Bannon who has become more of a liability lately in the wake of the Charlottesville protests and his recent comments about China and North Korea.

This is what Wall Street and established Washington have wanted for some time. Wall Street hates Bannon's push for more protectionist policies, especially with China. Established Washington hates Bannon's lack of any connection to either party or any real respect for them.

By contrast, Cohn is a Goldman Sachs product who represents a more politically correct preference for economic growth policies over ideology.

And Bannon has also long been labeled as a so-called "alt-right" icon because of his years as the publisher of Breitbart News. With the alt-right taking so much of the blame for last weekend's violent and deadly protests in Charlottesville, Bannon became more toxic than ever.

Even before Charlottesville, established Wall Street took its hardest shot at Bannon to date with an August 8th editorial in the Wall Street Journal blaming him for White House dysfunction and in-fighting. Bannon basically proved that editorial right with an interview published this week in the American Prospect where he disparaged some of his White House colleagues and administration policies.

For those who might misinterpret this as a victory of more pro-business policies over the progressive direction Bannon often championed, they should be cautious. Remember that President Trump's positions on the border wall and immigration bans on people coming from terror-connected countries came before Bannon officially joined the Trump campaign or the White House staff.

But for those who believe in a "carrot and stick" effect with this president, a stock recovery in response to Bannon's ouster, (the Dow Industrials Average erased a 100-plus point loss Friday just on reports Bannon was likely to go), this development could bear more fruit in the future. That is, if President Trump sees a return to a stock market rally, less criticism of him and his administration in the news media, and less strife inside the White House simply by letting Bannon go, he may be willing to change his tune on other issues as well.

All in all, Bannon was always more than just an outsider. He was an undefinable oddity. Born to modest and more populist roots, he became a Goldman Sachs millionaire like Cohn and then a Hollywood producer. Perhaps if he were more representative of the true Trump base he would have lasted longer.

And the other hard truth is that while Bannon was very useful to the Trump campaign, he was a net liability for the Trump White House. His story is a strong example of why most wise administrations don't bring so many top campaign advisers into the actual administration.

Campaigning and governing are two different things. With yet another vestige of the Trump campaign now out of the White House, perhaps the administration will begin to do a better job of governing.

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

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

WATCH: White House chief strategist Steve Bannon is leaving the Trump administration