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Who Can Replace Larry Summers? - Grasping Reality with Both Hands

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Grasping Reality with Both Hands The Semi-Daily Journal of Economist J. Bradford DeLong: Fair, Balanced, RealityBased, and Even-Handed Department of Economics, U.C. Berkeley #3880, Berkeley, CA 94720-3880; 925 708 0467; delong@econ.berkeley.edu.

Economics 210a Weblog Archives DeLong Hot on Google DeLong Hot on Google Blogsearch September 22, 2010

Who Can Replace Larry Summers? My view: nobody. The Obama administration is going to be weaker as a result of his forthcoming departure. The job of Assistant to the President for Economic Policy has two components: 1. Making sure that the President hears and considers the arguments, and makes an informed decision. 2. Making sure that everybody thinks that the president has heard and considered their arguments, and made an informed decision, and that they are valued and respected members of the team who are being given due influence and deference.-and also to make sure that the president hears everybody's arguments and makes an informed decision. Larry is superb at figuring out how to present complicated arguments to make them comprehensible to non-experts, and at setting up frameworks for discussion and debate that kept policy discussions on track and organized. That is most of the job. That is (1). And at that Larry is the best in the world. The other part, part (2)--making sure that everybody thinks that their point of view has been given a fair shake, and that they are valued and respected measures of the team? Well, given who Larry is, he far, far exceeded expectations. Only one public shouting fight in the halls of the West Wing in two years is... quite good, really. If I were Obama, I would (a) move Tim Geithner over to the West Wing job, for that is the job that matches his skill set where I think he would indeed by best in the world, and (b) bring Laura Tyson in to be Treasury Secretary... Failing that, were I Obama, I would probably try to grab Alan Blinder from Princeton to fill the West Wing job... http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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And were I really devious, I would bring Ben Bernanke over to the West Wing and put Larry in the Fed Chair job... Brad DeLong on September 22, 2010 at 09:53 AM in Obama Administration | Permalink Favorite

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Comments Lisa Hirsch said... I was slightly shocked that neither you nor Dr. PK jumped on this one last night! Dismayed by your view, though. Argh. Reply September 22, 2010 at 10:12 AM Neal said... Given the lack of coherent public announcements and direction from the WH up to this point I would think Larry has not done 1) or 2). What IS the current WH policy on the economy? What ARE the specific plans to remedy the situation? In this case generalities and penny-ante programs do NOT cut it at this time. IF the policy options ARE restrained by political opposition why has there been no FORCEFUL and CONCERTED program to call out that opposition and the consequences of their do-nothing stand? Failure--complete and utter failure. Three options: they have no clue what to do or they don't have the spine to push for what they want to do or what they want to do is so uncertain as to outcome that they don't want to have a record of pushing for it. A lot of rats leaving the ship these days. Reply September 22, 2010 at 10:14 AM Neal said... As the the question of the headline, why not Robert Reich? Reply September 22, 2010 at 10:16 AM JimW said... Unfortunately, there is also a third component--taking the blame when the President's economic policies are a political liability. Reply September 22, 2010 at 10:21 AM John Q said...

http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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"Making sure that the President hears and considers the arguments, and makes an informed decision. Larry is superb at figuring out how to present complicated arguments to make them comprehensible to non-experts, and at setting up frameworks for discussion and debate that kept policy discussions on track and organized. That is most of the job. That is (1). And at that Larry is the best in the world." Uh huh. So how come Obama never got to hear Romer's (and others') recommendations for a $1.2 trillion stimulus? Reply September 22, 2010 at 10:30 AM Deja-Vu said... Dear Prof. De Long, I see that you don't believe that President Obama is a disaster, that financial reform has completely failed, that the gains from healthcare reform will, for the most part vanish in the implementation phase, gamed away by the insurance companies and their lobbyists. I've always been struck by your forbearance towards the Democrats, the same people who finished deregulating finance, deregulating telecomms, abolishing welfare, shipping America's industrial base overseas, NOT nationalizing the banks instead of bailing them out, NOT banning exotic derivatives, NOT requiring all OTC derivatives to clear through exchanges, etc. etc. etc. and on and on and on. Summers has played a very important role in ensuring President Obama's economic policies were weak and ineffective, and yet, to you he's somehow okay? I don't understand that at all. Not to impugn your integrity, but the only reason I can think of for your kindness towards the Democratic Leadership Council is that you still hope to get appointed to some economic post in the administration. Do you have any response at all to this? Sincerely, Deja-Vu P.S. If you or one of your dastardly minions deletes this post, then you have shown yourself to be anti-Enlightenment and fully deserving the opprobrium Adam Smith(among many others) would heap upon you, were he(or they) alive today. P.P.S. I would ask you to bear in mind that you're a member of a completely discredited and intellectually bankrupt field: economics. A little humility is in order, I think. Reply September 22, 2010 at 10:37 AM Neal said... The America of today from Walmart's CEO (quote) I don't need to tell you that our customer remains challenged‌You need not go farther than one of our stores on midnight at the end of the month. And it's real interesting to watch, about 11 p.m. customers start to come in and shop, fill their grocery basket with basic items – baby formula, milk, bread, eggs – and continue to shop and mill about the store until midnight when government electronic benefits cards get activated, and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher. http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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(end quote) Reply September 22, 2010 at 10:41 AM Winslow R. said... Brad Delong slips and shows his true colors. I quit putting him in the list of Democratic failures as he discarded his previous drumbeat for fiscal conservatism, but he has re-earned his stripes. Rubin, Summers and Delong drove the Democrats into the ditch in 2000 and we still haven't figured a way to get. Reply September 22, 2010 at 10:46 AM mike said... Deja-Vu: "a completely discredited and intellectually bankrupt field: economics" I'd say there are some particular theories within economics that are now discredited and intellectually bankrupt. But as some theories become discredited, others theories simultaneously gain credibility (e.g., old-fashioned Keynesianism). And, while less a fan of Larry Summers, I find Professor De Long pretty humble. Does disagreeing with Deja-Vu imply arrogance? Isn't that, err... arrogant? Reply September 22, 2010 at 10:47 AM Johnny Appleseed said... This post is much too kind to Larry Summers. Summers has been too focused on GDP growth rather than jobs. Reply September 22, 2010 at 10:55 AM Rob said... Geithner can't move because there is no way Obama will ever get another Treasury Secretary through the Senate. But if as rumored its going to go to a CEO we are all doomed. Reply September 22, 2010 at 10:58 AM _mister6 said... Shouldn't there be a #3 on the list: provide the President with sound macroeconomic policy analysis and recommendations. I think your own blog demonstrates that Larry's been mediocre at best on #3. Reply September 22, 2010 at 11:08 AM PeakVT said... "The Obama administration is going to be weaker as a result of his forthcoming departure." This is nuts. Summers clearly aligns himself with Wall Street and has since he helped de-regulate Wall Street in 2000. His failure to include Romer's recommendation for a larger stimulus was a significant failure in judgment. Obama was not served well by either Summers and Geithner during the financial reform process, and reappointing Bernanke in light of his obvious disinterest in unemployment is causing and will cause suffering among people not of the class you and Henderson are members. (And then there are Bernanke's views on Social Security.) All three should go and Obama should find some economic advisers who are not in the ex-Clintonite club of cryptoRepublicans. Reply September 22, 2010 at 11:08 AM CT Mike said...

http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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I have to say that I am fairly surprised by your stance. Barry Ritholtz has been ripping both Summers and Geithner for some time now. His post today summarized my feelings on these two far more eloquently than I could so I'll just post the link: http://www.ritholtz.com/blog/2010/09/summers-good-riddance/ I'm curious to know how you (or other supporters of Summers/Geithner) would respond to these arguments. Reply September 22, 2010 at 11:10 AM Ken Houghton said... "Only one public shouting fight in the halls of the West Wing in two years is... quite good, really." You're misreading this. Summers "threw an elbow," as John Q noted, when he didn't present Romer's estimate as even a consideration. Given his position and personality, there should have been public shouting at least once a quarter. That there was only one in two years indicates that everyone =knew= he wasn't doing (1), so there was no point in believing (2). Ron Susskind's book on Christina Romer's time at the White House would be amazing. Reply September 22, 2010 at 11:14 AM Ken Houghton said... See also Mark Thoma, who is nicer than we are: http://economistsview.typepad.com/economistsview/2010/09/who-can-replace-larrysummers.html Reply September 22, 2010 at 11:20 AM Daniel said... I don't remember the screaming match. Link? Reply September 22, 2010 at 11:27 AM Matthew G. Saroff said... James K. Galbraith, that's who. Mars, bitches! There are plenty of advocates for orthodoxy in the Obama administration, Summers was one, we need to get hetrodox. Reply September 22, 2010 at 11:39 AM DrDick said... Oh, hell, a trained monkey could replace Summers. He is a useless and destructive tool of Wall Street who perfectly happy to see millions of Americans permanently unemployed as long as the banksters get to keep their oh so precious bonuses. Reply September 22, 2010 at 11:45 AM Josiah Bartlett said... I'm wondering if there is any relationship between Summers departure and Elizabeth Warren finally getting her appointment with the CFPB??? Could the timing be more than coincidental? Reply September 22, 2010 at 11:48 AM jcb said... Spoken like a true acolyte, BD! What everyone else says, above. And Paul Krugman:

http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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http://krugman.blogs.nytimes.com/2010/09/22/on-being-chopped-liver/ And: "White House senior adviser Larry Summers is brilliant but imperious toward a dissenting economist, Austan Goolsbee, who dares to speak up at a meeting. Summers "explodes" and tells Goolsbee in the corridor: "You do not relitigate in front of the president!" http://www.thefiscaltimes.com/Issues/The-Economy/2010/09/13/~/link.aspx? _id=CE1EB302FC084BC6A99FFC9D5C3BF6BE&_z=z Since when is providing alternative opinions not funneled first through Summers "relitigating"? Reply September 22, 2010 at 11:55 AM Dennis said... Perhaps you meant to say "anybody" and that Obama could hardly be weaker? Reply September 22, 2010 at 11:58 AM arvid said... Brad This is the kind of post that undoes all your good work and shows you to be a run-ofthe-mill economist....with the same prescriptions, same suggestions, and samesuspects as saviors..... Reply September 22, 2010 at 12:37 PM Lee Hartmann said... Give me wisdom over brilliance any day. bye bye Larry. Too bad he can't take Timmy with him. You were brave to admit the other day you were part of the "Rubin wing" of the Democratic party. Reply September 22, 2010 at 12:40 PM TJ said... Never thought economists practiced omerta. Reply September 22, 2010 at 12:42 PM bartkid said... Hasn't enough time passed for the rehabilitation of Elliot Spitzer? Or, would Senators Ensign and Vitter filibuster his nomination? The only other person I think who comes close to what is needed for the job would be Nassim Nicholas Taleb (author of The Black Swan). He would succeed in component 1 with flying colours. Component 2 I think is overrated until the usual gang of zombie economics have a box of Morton's down the gullet. Dr. Krugman would be my third nominee, but he has that DFH scent of having been right all along. Reply September 22, 2010 at 12:45 PM bay of arizona said in reply to Richard Cownie... agreed. I thought Brad learned his lesson after his support for Bernanke, whom he thought was a CENTRIST TECHNOCRAT, like him, turned out to be a colossal mistake (I assume Brad agrees, but what do i know). Very disappointing post.

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Reply September 22, 2010 at 12:52 PM nilso said... Would he have the smarts to appoint Laura Tyson? could she make it through the gauntlet? If so, that would be the silver lining in this mess. Reply September 22, 2010 at 12:57 PM Peter K. said... I'd take DeLong's opinion over a bunch of bitchy anonymous commenters any day. Reply September 22, 2010 at 12:58 PM dfvdfvd said... All of us who have worked with Larry know this simply isn't true. Summers is completely incapable of being an honest broker. Its always his way or the highway, I don't know why you can't see this. You don't put a brilliant researcher as head of the NEC, too much ego. You have to put a manager who knows enough to guide the policy process. And the one thing Summers has been absolutely abysmal at is managing anything. Think Harvard want a second go round with him as president? Reply September 22, 2010 at 01:11 PM the idler said... Now Lawrence can rejoin the oligarchs at DE Shaw Group, and regale them with his amusing anecdotes on how he kept the cabinet Jacobins at bay. Or he can return to Harvard, and gratifyingly contemplate his genius at length. Reply September 22, 2010 at 01:14 PM Robert Ash said... You're kidding, right? Reply September 22, 2010 at 01:24 PM Brad DeLong said in reply to dfvdfvd... Re: "All of us who have worked with Larry know this simply isn't true. Summers is completely incapable of being an honest broker. Its always his way or the highway..." "His way" changes with evidence and argument. If you have both, your way becomes his way--and then there he is, on your side, and it is your way or the highway... Reply September 22, 2010 at 01:36 PM JimK. said... No indictment? Maybe not a conviction but at least an indictment to focus on his role in the early phase of the bubble. Was a stay out of jail card part of the deal? From the far outside,he seems like the Kissinger of economics. Reply September 22, 2010 at 02:40 PM Full Employment Hawk said... I must say that I am shocked by this posting. Apparently it was Sommers who was responsible for Obama not being presented by Romer's recommmendation that a 1.2 or 1.3 trillion stimulus was needed and that the stimulus should be only strong enough to provide insurance against a disaster instead of making the economy grow fast enough to make the unemployment rate come down significantly during the 6 months before the election. The Obama administration's biggest domestic failing was to fail to understand how important having a good job and not having to worry about losing it is to ordinary working people and that if that were not happening they would show their anger and dissatisfaction by voting against the incumbents. Everybody in the Obama adminstration should have had their hair on fire about doing http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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everything possible to make the unemployment rate come down. Their failure to understand this must fall above all to Obama's chief economic advisor. The fact that Summers is a creature of Wall Street and out of touch with Main Street explains a lot. Reply September 22, 2010 at 03:25 PM Full Employment Hawk said in reply to Full Employment Hawk... Another economic bluner is to not include a second stimulus in the 2009 budget using reconciliation, which would have required only 51 votes. Only some types of stimulus would have been feasible, but if large enough, this would have made the difference and made the economy grow enough. As Obama's chief economic advisor a much of the blame must fall on Summers for this. And who was responsible for the Obama administration not filling vacancies on the Board of Governors proptly. If Summers had been doing his job, he would have pointed out the urgency of taking care of this matter. Summers probably is the person most responsible for the losses the Democrats will have this Fall. All I can say is GOOD RIDDANCE! Reply September 22, 2010 at 03:42 PM Glen said... My take (for the sake of discussion: Stiglitz replaces Summers Buffet replaces Geithner Bill Black heads SEC Volcker goes back to the Fed I think that political optics plays a larger role than academic qualifications. Reply September 22, 2010 at 03:53 PM Robert Waldmann said... Minds think alike. I too toyed with the Bernanke in the White House idea. However, Bernanke has a fixed term. He's not at Obama's beck and call. Reply September 22, 2010 at 04:00 PM Cawley said... I think I'm going to be sick ... Reply September 22, 2010 at 04:23 PM christofay said... Wowie. you are completely captured. American economics has to be re-evaluated downward Reply September 22, 2010 at 04:24 PM christofay said... You are a rubinista "Summers saw to it that the talk was talked, but the walk was never walked" "I think Larry Summers was tasked with making sure the kind of backlash that in 1933 unleashed Ferdinand Pecora on Wall Street didn’t happen in 2009. I think Larry Summers was tasked with marginalizing Paul Volcker, who could thus serve the new administration as moral window-dressing without actually causing trouble. I think it was understood from the outset that any meaningful economics program must involve taking Wall Street to the woodshed, and that this must not be allowed to happen. I http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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think Larry Summers, skilled in the ways of the Washington equivalent of Dickens’s “Circumlocution Office” (in Little Dorrit), saw to it that it did not." http://www.nakedcapitalism.com/2010/09/summers-gave-obama-cover.html Reply September 22, 2010 at 04:28 PM Barry said... Brad, what has Larry Harwh*re Summers done, aside from fail his way upwards, like a self-made Dubya? Reply September 22, 2010 at 05:41 PM dfvdfvd said... Summers only changes his mind if you argue from his worldview, that's why he is so often very wrong. 1. Summers spent all of the 90's being completely wrong on climate change, becuase he wouldn't interpret evidence outside of his mental box. 2. He was completely wrong on finance, with horrible results from the 90s deregulation, and did everything to ostracize people like Rajan who argued from a different perspective. Rajan had theory and data and was right, but Summers gave him the full mean girl treatment. 3. He did not understand the finance risks, so he got Harvard in serious trouble. 4. He shut Romer out of the stimulus debate, for reasons we aren't sure of, but she was, of course, right. And had the data and the theory completely on her side. Summers shows again and again on the major decisions that he makes terrible judgements. Lots of people would be better at the job. Reply September 22, 2010 at 06:18 PM AndrewBW said... The graveyards are full of indispensable men. Reply September 22, 2010 at 06:32 PM Bloix said... The rock on which the Obama administration has foundered is the undersized stimulus, which is Summers' fault. We have 10% unemployment and are facing a Republican resurgence because of Larry Summers. If, say, Brad DeLong had held Summers' position, we would now have perhaps 7% unemployment, a growing economy, and a Democratic lock on government for a generation. Reply September 22, 2010 at 06:47 PM Bill said... At some point, Obama has to be something other than a vessel for the past Clinton administration. There are many good economists out there; there is a need for fresh ideas. JFK didn't bring in Truman's economic team, and Obama shouldn't have picked up the past. He's there now. There are many good persons out there, not only those who have served in the past. The past can be a shackle. Reply September 22, 2010 at 06:54 PM Cranky Observer said... >> Re: "All of us who have worked with Larry know this simply isn't >> true. Summers is completely incapable of being an honest broker. >> Its always his way or the highway..."

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> "His way" changes with evidence and argument. If you have both, your > way becomes his way--and then there he is, on your side, and it is > your way or the highway... I've worked with a lot of brilliant technology people, and I've worked with a lot of very capable and accomplished technology people. The reason the former are not automatically the latter, and in my experience the brilliant often fail to accomplish anything useful (particularly in production operations). Many reasons for this, but chief among them is that people busy expounding on their brilliance seldom (a) really listen to what others are saying (b) don't recognize the signs of themselves being wrong (c) in the production world, never have the core of inner self-doubt that is necessary to keep checking and double-checking and coming in from a different angle and questioning one's hypothesis until one is certain the problem is 100.1% solved - and then coming back the next day to be really sure. Cranky Reply September 22, 2010 at 07:02 PM old scotsman said... I can't agree with you about either Larry or Tim, Smart, yes, but helpful and innovative, not. Larry did a lot of harm as Harvard President. Reply September 22, 2010 at 07:51 PM Amit Chokshi said... This job is not that "complex"...it's really quite basic and we have historic data to help us figure out what to do. We could burn $1T dollars in open view literally and it would not register w/the bond markets. The bond markets would say do more. We have a 6% output gap, every policy put forth is on the supply side rather than demand. Spend $12T in legit, high multiplier fiscal stimulus and this economy will heal itself. Unfortunately we prefer to give the Fed and monetary policy a shot at this w/pathetically noncommittal weak QE2 which won't even be a direct stim. Unreal, people say the admin should look to operate like a business. MSFT, JNJ, etc are all issuing massive amounts of debt...cost of capital for high credit cos is dirt cheap. US is the highest credit quality in the world, we can borrow under 4% long-term, 10 year at 2.5%? We can't earn a higher IRR than 2.5% on that...pathetic. Reply September 23, 2010 at 04:54 AM Neal said... The facts remain apparent--an economic revival program consisting of an undersized and poorly targeted stimulus, and the programs of cash for clunkers and house purchase tax rebates that proved to be temporary accelerants. Nothing of that scale since those actions--all put into place well over a year ago. What has been going on for the past year or so with these people? I, an ignorant fool, can "wait and see" as well as Mr. Summers. His actions or lack of actions, as well as the record of the result of the few actions taken, along with the lack of effective private and public advocacy for larger or additional programs makes him the entirely dispensable man. Reply September 23, 2010 at 05:33 AM christofay said... At the fifty something comments market, it is 49 regular citizens against, and two professional academic economists for So, for the slow learners:

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'When 77% of your population lives paycheck to paycheck, as David DeGraw writes, up from 43% when the recession started in 2007 and 61% when it supposedly ended, it's high time to consider dignity and respect when publishing cold statistics. How good of a thing is it for a president to tout his achievements in front of TV cameras while fast increasing numbers of those who voted him into office see no way out of their misery anymore.... 'Just like the GDP is a perverse standard of "wellness" as long as people suffering in hospitals from long term ailments, and those who get severely injured or die in traffic accidents, count as positive contributions to that standard, the NBER’s definition of recessions isn’t just one of those 1300 in a dozen lies politicians love to tell in order to win votes. It’s a bright red flashlight warning of deep rooted cynicism.... 'Special White House economic adviser Larry Summers will leave and return to Harvard. Yes, granted, that may well be the most cynical one of them all. First off, Harvard shouldn’t want him back. He proved himself to be a sexist pig while there, and moreover provided investment advice that cost the institution tens of billions of dollars. Second, Summers was at the Treasury under Clinton and as such instrumental in repealing Glass-Steagall, kicking out Brooksley Born (once a sexist pig, ...) and making sure there would be no limits on the new “creative” financial instruments the banking sector was busy unleashing on the country’s financial system. 'Now Larry’s helped the US economy miles further down into the gutter, and he gets to leave just like that? Let’s give him a medal, why don’t we? Chief of Staff Rahm Emanuel will go his way as well, to further collapse the city of Chicago. My money would be on Tim Geithner bailing out also, for a nice banking job. Morgan Stanley? Goldman would raise too many questions. It’s all more cynicism, power horny middle aged men dropping their pants to moon the American people. leaning out of the windows of their limos, humming along to MC Hammer’s “Can’t touch this". 'Whoever replaces this cast of clowns, the damage has long been done. And a president who decides to tackle a plunging economy with the same guys who made it plunge in the first place shouldn’t in an ideal world get away with merely easing them out halfway through his term. That can’t be where the buck stops, not in a properly functioning society. Such a president should admit his failures and leave too. That would be dignified, respectful of the people. 'It's not going to happen, men of principles are nowhere to be found in Washington anymore, and if they would pop up, they'd be found sleeping with the fishes in the Potomac tomorrow morning.' http://theautomaticearth.blogspot.com/2010/09/september-22-2010-cant-touchthis.html Reply September 23, 2010 at 06:08 AM christofay said... Now that previous comment can be dismissed Rahm-like as coming from a leftist so for a different perspective we can turn to Barry Ritholtz: 'The bad news? I am not sure what (if any) impact this will have on the administration’s economic policies. 'To review: Summers is the former Clinton Treasury Secretary, mentored by Robert Rubin. As such, he was one of (many) architects of the financial crisis. In addition to believing all of the usual foolishness about efficient markets, he bought into the radical deregulation arguments pushed by the free market absolutists. http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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'Summers was the Treasury Secretary when Glass Steagall was repealed. Instead of speaking out against the irresponsible Gramm–Leach–Bliley Act (Financial Services Modernization Act of 1999) that allowed the Financialization of America to progress, he actively supported it. Instead of explaining to the public how Glass Steagall had prevented every Wall Street crisis since the Great Depression from spilling over onto Main Street, he rolled over for Citibank. 'Understand that the repeal of Glass Steagall was not a cause of the crisis. But, it allowed the net damage to be far greater and extend far wider than it would have otherwise been. From a libertarian perspective, it was emblematic of the corporate takeover of the legislative process. For a hefty fee (aka campaign donation) you could pretty much write the regulations that covered your own industry. How could that ever go wrong? 'Summers oversaw the passage of the even more ruinous Commodities Futures Modernization Act of 2000. The CFMA exempted all financial derivatives from any and all regulatory oversight. The CFMA not made the AIG collapse possible, it made it highly likely. It helped to set up both the Lehman and Bear Stearns’ collapses. The CFMA allowed AIG FP to write over $3 trillion in derivatives, reserving precisely zero dollars in case these insurance policy-like obligations had to be paid out. 'Failing upwards: When Obama appointment the Rubin duo of Summers and Geithner, it a perverse reward for a job done poorly. The two were creatures of the banking system, and were unlikely to do anything that threatened the existing order. Even worse, it created a dynamic where the new administration was committed to defending the policies that helped to contribute to the crisis in the first place. Instead of To Hell with the Banks, Save the Banking System, we got the exact reverse. This was Rubin’s lasting gift to the Obama White House: A third term for George W. Bush’s economic policies. When Obama becomes a one-termer, it will be his own fault for following this horrific economic advice. 'Summers was incapable of saying, let’s repeal the Glass Steagall Repeal; lets overturn CFMA. Rather than fix what was broken, he stayed committed to the same bad ideas that led to crisis and collapse.' http://www.ritholtz.com/blog/2010/09/summers-good-riddance/ Reply September 23, 2010 at 06:39 AM christofay said... You can give 'em spoonfuls of socialism but you can't make them love ya: "Jack Welch Goes Over All The Reasons He Can't Stand Obama" http://www.businessinsider.com/jack-welch-goes-over-all-the-reasons-he-cant-standobama-2010-9 Which should be a lesson to washington democrats, get the re-election fund comps before you give away the treasury Reply September 23, 2010 at 06:41 AM the idler said in reply to christofay... Saw "Neutron Jack" Welch today on CNBC. Looked like the Crypt Keeper. Are GE shareholders still paying for his toiletries? Reply September 23, 2010 at 08:23 AM John Q said in reply to Brad DeLong... Romer had evidence and argument. (Correct, as we now sadly see.) http://delong.typepad.com/sdj/2010/09/who-can-replace-larry-summers.html

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Who Can Replace Larry Summers? - Grasping Reality with Both Hands

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So how come Summers didn't change "his way" to "her way", if what you say about him is correct? Reply September 23, 2010 at 08:41 AM Cal said... You are letting your friendship cloud your analysis. Summers was not right for this job because he was part of the problem to begin with. Reply September 23, 2010 at 09:52 AM Deja-Vu said in reply to mike... You're right. I'm referring more to mainstream, academic economics in general in the Anglo-American world. Even though I agree with De Long a lot of the time now, I don't know his history that well. For example, didn't he support deregulation of finance at some point? or some other equally horrible idea during the '90s? As you said, there are the Keynesian and the Austrian schools, but as far as I know they have little if any influence on policy or much presence in Anglo-American economics in general. Anyway, his forbearance towards Summers and the Democrats places Prof. De Long squarely in the mainstream, the perpetrators of this disaster and hence, the need for humility on his part. Especially when my posts get deleted. Reply September 23, 2010 at 09:53 AM sglover said... Every now and then DeLong produces a post that serves as a kind of calibration standard, and this is one of them. Just when you think that he and his "science" might actually be within a light-year of "grasping reality", he cranks out something to remind you of how totally cloistered and clueless he really is. Even with that in mind, DeLong's amazingly bad judgement can still astonish. I would've thought that by now he'd have at least a speck of doubt about Larry's selfproclaimed "talent". Reply September 23, 2010 at 10:32 AM nemo said... What I get from this post is that Brad DeLong knows Larry Summers well, likes him, and thinks he's smart. This apparently leads to DeLong's conclusion that Larry Summers has been good at his job, good for the administration, and good for the country. Years ago when I was at Yale I knew both Paul Wolfowitz and David Gelernter well. I liked them, and I thought they were smart. But liking and respecting them doesn't blind me to the fact that in most important matters they were dead wrong, and that in the case of Wolfowitz especially, did things that were terribly damaging to our country. Reply September 23, 2010 at 02:37 PM Barry said... Brad: "Larry is superb at figuring out how to present complicated arguments to make them comprehensible to non-experts, and at setting up frameworks for discussion and debate that kept policy discussions on track and organized. That is most of the job. That is (1). And at that Larry is the best in the world." Which is odd, because (to the best of my recollection) every profile of him implies that he's the guy who walks in, wins arguments, and shuts down other people.

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Who Can Replace Larry Summers? - Grasping Reality with Both Hands

10/21/10 7:50 PM

Which is fine, if he's right. When he's not right, it just means that he's a good arguer. Reply September 24, 2010 at 12:31 PM Comment below or sign in with TypePad

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Media Matters for America - Oct 19, 2010 In a November 17 post on his personal blog, University of California-Berkeley economics professor Brad DeLong wrote, "Private investment recovered in a very ... Related Articles » « Previous Next »

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Who Can Replace Larry Summers? - Grasping Reality with Both Hands

Paul Mafia: Krugman Ezra Klein Mark Thoma Matthew Cowen and Yglesias Tabarrok Spencer Chinn and Ackerman Hamilton Dana Brad Setser Goldstein Dan Froomkin

10/21/10 7:50 PM

Philosophers: Hilzoy and Friends Crooked Timber of Humanity Mark Kleiman and Friends Eric Rauchway and Friends John Holbo and Friends

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Who Can Replace Larry Summers? - Grasping Reality with Both Hands

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Who Can Replace Larry Summers