Key Takeaways
- • Mike Novogratz, billionaire former Goldman Sachs partner and CEO of Galaxy Investment Partners, levied sharp criticism at Treasury Secretary Steven Mnuchin and White House economic advisor Gary Cohn over the GOP tax reform process, calling Mnuchin an "idiot" for failing to model the tax proposal's economic impact.
- • Novogratz opposed the current tax reform trajectory on substantive grounds: cutting corporate tax rates during economic growth is economically unsound, and eliminating state and local tax deductions will result in higher taxes for many New Yorkers who supported Trump expecting relief.
- • The criticism reflects a philosophical divide among former Goldman partners on fiscal policy, with Novogratz—a recent major cryptocurrency investor—favoring "smarter tax reform" over the GOP's current legislative approach.
Summary
Michael Novogratz, the billionaire hedge fund manager and CEO of Galaxy Investment Partners, delivered pointed criticism of two former Goldman Sachs colleagues now in senior government positions. Speaking to Bloomberg News at a charity event in December 2017, Novogratz attacked Treasury Secretary Steven Mnuchin and White House National Economic Council director Gary Cohn over their stewardship of the GOP tax reform initiative then moving through Congress.
Novogratz's critique centered on the substance and execution of the tax plan. He accused Mnuchin of failing to properly analyze the legislation's economic effects, stating bluntly: "Steve Mnuchin never even modeled the thing — idiot, I-D-I-O-T." Regarding Cohn, Novogratz questioned his moral standing, asserting: "Gary Cohn shouldn't be able to live with himself." All three men had been partners at Goldman Sachs during the 1990s, making the rebuke particularly noteworthy coming from within their peer group.
The substance of Novogratz's disagreement extended beyond process to economic principle. He argued that cutting the corporate tax rate—the centerpiece of the GOP proposal—made little sense given the economy's existing growth momentum. Additionally, Novogratz highlighted a distributional problem: the plan's elimination of state and local tax deductions would likely raise taxes on middle and upper-income households in high-tax states like New York, undercutting a core campaign promise to Trump supporters in those regions. His comment to Bloomberg—"I'm like, serves you right"—reflected frustration with voters who expected tax relief but faced the opposite outcome.
Novogratz's intervention in the tax debate came amid his high-profile pivot into cryptocurrency investments and his shift toward Democratic political causes in recent years. His advocacy for "smarter tax reform" positioned him as a substantive critic rather than a partisan voice, emphasizing economic logic over party loyalty.
Novogratz's critique centered on the substance and execution of the tax plan. He accused Mnuchin of failing to properly analyze the legislation's economic effects, stating bluntly: "Steve Mnuchin never even modeled the thing — idiot, I-D-I-O-T." Regarding Cohn, Novogratz questioned his moral standing, asserting: "Gary Cohn shouldn't be able to live with himself." All three men had been partners at Goldman Sachs during the 1990s, making the rebuke particularly noteworthy coming from within their peer group.
The substance of Novogratz's disagreement extended beyond process to economic principle. He argued that cutting the corporate tax rate—the centerpiece of the GOP proposal—made little sense given the economy's existing growth momentum. Additionally, Novogratz highlighted a distributional problem: the plan's elimination of state and local tax deductions would likely raise taxes on middle and upper-income households in high-tax states like New York, undercutting a core campaign promise to Trump supporters in those regions. His comment to Bloomberg—"I'm like, serves you right"—reflected frustration with voters who expected tax relief but faced the opposite outcome.
Novogratz's intervention in the tax debate came amid his high-profile pivot into cryptocurrency investments and his shift toward Democratic political causes in recent years. His advocacy for "smarter tax reform" positioned him as a substantive critic rather than a partisan voice, emphasizing economic logic over party loyalty.
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