Larry Summers Is Still Worth Ignoring

An encouraging fact about Joe Biden is that he is the first Democratic president in nearly 40 years not to enlist the services of Larry Summers, one of the most influential neoliberal economists in decades. Summers has been a constant power player since serving on the Ronald Reagan Council of Economic Advisers from 1982 to 1983. His Reaganite roots did not prevent him from being repeatedly promoted to leadership positions under the administrations of Bill Clinton and Barack Obama. From 1999 to 2001 he was Minister of Finance and from 2009 to 2010 Director of the National Economic Council.

The usual line of defense given by Summers’ political patrons is that while notoriously aggressive, he’s also brilliant. In 2009, Naomi Klein challenged the high marks Summers gets for his intelligence observe in the The Washington Post“For all of his appeals to absolute truths, [Summers] has always been spectacularly wrong. He was wrong not to regulate derivatives. Wrong when he helped kill the banking laws of the Depression and turn banks into great welfare monsters to fail. And since he helps to develop increasingly complex tricks and spends more and more tax dollars to keep the financial casino running, he is still wrong today. ”

Klein’s criticism is an expert distillation of the leftist criticism of Summers. There is reason to believe that even some of its former patrons have realized the truth of this charge. In 2010, Bill Clinton said The advice he received from Larry Summers and former Treasury Secretary Robert Rubin not to regulate derivatives was “wrong” and he regretted having followed it.

The growing consensus that Summers was wrong about big issues explains why he was expelled from the Biden administration. summer I guessed it briefly Candidate Biden in the summer of 2020, but the Outcry from progressives ended the Biden campaign’s relationship with the controversial economist.

The loss of access to the president’s ear did not dampen Summers’s desire to shape politics. In a much read Washington Post open on Tuesday, summer argued that the $ 1.9 trillion incentive enforced by the Democrats could be too big and overheat the economy. Summers warned, “There is a possibility that macroeconomic stimulus, closer to World War II levels than normal recession levels, will create inflationary pressures unlike any we have seen in a generation, with consequences for the value of the dollar and of financial stability. “Summers’s dire forecast relies heavily on forecasts by the Congressional Budget Office (CBO) that the US economy is already heading for a swift and robust recovery.

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