10/21/10 7:50 PMWho Can Replace Larry Summers? - Grasping Reality with Both Hands

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Grasping Reality with Both HandsThe Semi-Daily Journal of Economist J. Bradford DeLong: Fair, Balanced, Reality-Based, and Even-HandedDepartment of Economics, U.C. Berkeley #3880, Berkeley, CA 94720-3880; 925 7080467; delong@econ.berkeley.edu.

Economics 210aWeblog ArchivesDeLong Hot on GoogleDeLong Hot on Google BlogsearchSeptember 22, 2010

Who Can Replace Larry Summers?

My view: nobody. The Obama administration is going to be weaker as a result of hisforthcoming 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 aninformed decision.

2. Making sure that everybody thinks that the president has heard and consideredtheir arguments, and made an informed decision, and that they are valued andrespected 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 makesan informed decision.

Larry is superb at figuring out how to present complicated arguments to make themcomprehensible to non-experts, and at setting up frameworks for discussion anddebate 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 hasbeen 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 shoutingfight 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 isthe 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 Princetonto fill the West Wing job...

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And were I really devious, I would bring Ben Bernanke over to the West Wing and putLarry in the Fed Chair job...

Brad DeLong on September 22, 2010 at 09:53 AM in Obama Administration |Permalink

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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 AMNeal said...Given the lack of coherent public announcements and direction from the WH up to thispoint I would think Larry has not done 1) or 2).

What IS the current WH policy on the economy? What ARE the specific plans toremedy the situation? In this case generalities and penny-ante programs do NOT cut itat this time. IF the policy options ARE restrained by political opposition why has therebeen no FORCEFUL and CONCERTED program to call out that opposition and theconsequences 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 forwhat they want to do or what they want to do is so uncertain as to outcome that theydon'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 AMNeal said...As the the question of the headline, why not Robert Reich?

Reply September 22, 2010 at 10:16 AMJimW said...Unfortunately, there is also a third component--taking the blame when the President'seconomic policies are a political liability.

Reply September 22, 2010 at 10:21 AMJohn Q said...

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"Making sure that the President hears and considers the arguments, and makes aninformed decision.

Larry is superb at figuring out how to present complicated arguments to make themcomprehensible to non-experts, and at setting up frameworks for discussion anddebate 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 AMDeja-Vu said...

Dear Prof. De Long,

I see that you don't believe that President Obama is a disaster, that financial reformhas completely failed, that the gains from healthcare reform will, for the most partvanish in the implementation phase, gamed away by the insurance companies andtheir lobbyists.I've always been struck by your forbearance towards the Democrats, the same peoplewho finished deregulating finance, deregulating telecomms, abolishing welfare,shipping America's industrial base overseas, NOT nationalizing the banks instead ofbailing them out, NOT banning exotic derivatives, NOT requiring all OTC derivatives toclear through exchanges, etc. etc. etc. and on and on and on. Summers has played a very important role in ensuring President Obama's economicpolicies were weak and ineffective, and yet, to you he's somehow okay? I don'tunderstand that at all.Not to impugn your integrity, but the only reason I can think of for your kindnesstowards the Democratic Leadership Council is that you still hope to get appointed tosome 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 shownyourself to be anti-Enlightenment and fully deserving the opprobrium AdamSmith(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 completelydiscredited and intellectually bankrupt field: economics. A little humility is in order, Ithink.

Reply September 22, 2010 at 10:37 AMNeal said...The America of today from Walmart's CEO

(quote)

I don't need to tell you that our customer remains challenged…You need not go fartherthan one of our stores on midnight at the end of the month. And it's real interesting towatch, about 11 p.m. customers start to come in and shop, fill their grocery basket withbasic items – baby formula, milk, bread, eggs – and continue to shop and mill aboutthe store until midnight when government electronic benefits cards get activated, andthen the checkout starts and occurs. And our sales for those first few hours on the firstof the month are substantially and significantly higher.

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Reply September 22, 2010 at 10:41 AMWinslow R. said...Brad Delong slips and shows his true colors.

I quit putting him in the list of Democratic failures as he discarded his previousdrumbeat for fiscal conservatism, but he has re-earned his stripes.

Rubin, Summers and Delong drove the Democrats into the ditch in 2000 and we stillhaven't figured a way to get.

Reply September 22, 2010 at 10:46 AMmike said...Deja-Vu: "a completely discredited and intellectually bankrupt field: economics"

I'd say there are some particular theories within economics that are now discreditedand intellectually bankrupt. But as some theories become discredited, others theoriessimultaneously gain credibility (e.g., old-fashioned Keynesianism).

And, while less a fan of Larry Summers, I find Professor De Long pretty humble. Doesdisagreeing with Deja-Vu imply arrogance? Isn't that, err... arrogant?

Reply September 22, 2010 at 10:47 AMJohnny Appleseed said...This post is much too kind to Larry Summers. Summers has been too focused on GDPgrowth rather than jobs.

Reply September 22, 2010 at 10:55 AMRob said...Geithner can't move because there is no way Obama will ever get another TreasurySecretary through the Senate. But if as rumored its going to go to a CEO we are alldoomed.

Reply September 22, 2010 at 10:58 AM_mister6 said...Shouldn't there be a #3 on the list: provide the President with sound macroeconomicpolicy 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 AMPeakVT said..."The Obama administration is going to be weaker as a result of his forthcomingdeparture."

This is nuts. Summers clearly aligns himself with Wall Street and has since he helpedde-regulate Wall Street in 2000. His failure to include Romer's recommendation for alarger stimulus was a significant failure in judgment. Obama was not served well byeither Summers and Geithner during the financial reform process, and reappointingBernanke in light of his obvious disinterest in unemployment is causing and will causesuffering among people not of the class you and Henderson are members. (And thenthere are Bernanke's views on Social Security.) All three should go and Obama shouldfind some economic advisers who are not in the ex-Clintonite club of crypto-Republicans.

Reply September 22, 2010 at 11:08 AMCT Mike said...

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I have to say that I am fairly surprised by your stance. Barry Ritholtz has been rippingboth Summers and Geithner for some time now. His post today summarized myfeelings 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) wouldrespond to these arguments.

Reply September 22, 2010 at 11:10 AMKen Houghton said..."Only one public shouting fight in the halls of the West Wing in two years is... quitegood, really."

You're misreading this. Summers "threw an elbow," as John Q noted, when he didn'tpresent Romer's estimate as even a consideration.

Given his position and personality, there should have been public shouting at leastonce 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 AMKen Houghton said...See also Mark Thoma, who is nicer than we are:

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

Reply September 22, 2010 at 11:20 AMDaniel said...I don't remember the screaming match. Link?

Reply September 22, 2010 at 11:27 AMMatthew G. Saroff said...James K. Galbraith, that's who.

Mars, bitches!

There are plenty of advocates for orthodoxy in the Obama administration, Summerswas one, we need to get hetrodox.

Reply September 22, 2010 at 11:39 AMDrDick said...Oh, hell, a trained monkey could replace Summers. He is a useless and destructive toolof Wall Street who perfectly happy to see millions of Americans permanentlyunemployed as long as the banksters get to keep their oh so precious bonuses.

Reply September 22, 2010 at 11:45 AMJosiah Bartlett said...I'm wondering if there is any relationship between Summers departure and ElizabethWarren finally getting her appointment with the CFPB??? Could the timing be morethan coincidental?

Reply September 22, 2010 at 11:48 AMjcb said...Spoken like a true acolyte, BD!

What everyone else says, above. And Paul Krugman:

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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 adissenting 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 thepresident!"

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 AMDennis said...Perhaps you meant to say "anybody" and that Obama could hardly be weaker?

Reply September 22, 2010 at 11:58 AMarvid said...BradThis is the kind of post that undoes all your good work and shows you to be a run-of-the-mill economist....with the same prescriptions, same suggestions, and same-suspects as saviors.....

Reply September 22, 2010 at 12:37 PMLee 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 PMTJ said...Never thought economists practiced omerta.

Reply September 22, 2010 at 12:42 PMbartkid 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 beNassim Nicholas Taleb (author of The Black Swan). He would succeed in component 1with flying colours. Component 2 I think is overrated until the usual gang of zombieeconomics have a box of Morton's down the gullet.

Dr. Krugman would be my third nominee, but he has that DFH scent of having beenright all along.

Reply September 22, 2010 at 12:45 PMbay of arizona said in reply to Richard Cownie...agreed. I thought Brad learned his lesson after his support for Bernanke, whom hethought 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 PMnilso said...Would he have the smarts to appoint Laura Tyson? could she make it through thegauntlet? If so, that would be the silver lining in this mess.

Reply September 22, 2010 at 12:57 PMPeter K. said...I'd take DeLong's opinion over a bunch of bitchy anonymous commenters any day.

Reply September 22, 2010 at 12:58 PMdfvdfvd said...All of us who have worked with Larry know this simply isn't true. Summers iscompletely incapable of being an honest broker. Its always his way or the highway, Idon't know why you can't see this. You don't put a brilliant researcher as head of theNEC, too much ego. You have to put a manager who knows enough to guide the policyprocess. And the one thing Summers has been absolutely abysmal at is managinganything. Think Harvard want a second go round with him as president?

Reply September 22, 2010 at 01:11 PMthe idler said...Now Lawrence can rejoin the oligarchs at DE Shaw Group, and regale them with hisamusing anecdotes on how he kept the cabinet Jacobins at bay. Or he can return toHarvard, and gratifyingly contemplate his genius at length.

Reply September 22, 2010 at 01:14 PMRobert Ash said...You're kidding, right?

Reply September 22, 2010 at 01:24 PMBrad DeLong said in reply to dfvdfvd...Re: "All of us who have worked with Larry know this simply isn't true. Summers iscompletely 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 becomeshis way--and then there he is, on your side, and it is your way or the highway...

Reply September 22, 2010 at 01:36 PMJimK. said...No indictment? Maybe not a conviction but at least an indictment to focus on his rolein the early phase of the bubble. Was a stay out of jail card part of the deal? From thefar outside,he seems like the Kissinger of economics.

Reply September 22, 2010 at 02:40 PMFull Employment Hawk said...I must say that I am shocked by this posting. Apparently it was Sommers who wasresponsible for Obama not being presented by Romer's recommmendation that a 1.2 or1.3 trillion stimulus was needed and that the stimulus should be only strong enough toprovide insurance against a disaster instead of making the economy grow fast enoughto make the unemployment rate come down significantly during the 6 months beforethe election.

The Obama administration's biggest domestic failing was to fail to understand howimportant having a good job and not having to worry about losing it is to ordinaryworking people and that if that were not happening they would show their anger anddissatisfaction by voting against the incumbents.

Everybody in the Obama adminstration should have had their hair on fire about doing

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everything possible to make the unemployment rate come down. Their failure tounderstand this must fall above all to Obama's chief economic advisor. The fact thatSummers is a creature of Wall Street and out of touch with Main Street explains a lot.

Reply September 22, 2010 at 03:25 PMFull Employment Hawk said in reply to Full Employment Hawk...Another economic bluner is to not include a second stimulus in the 2009 budget usingreconciliation, which would have required only 51 votes. Only some types of stimuluswould have been feasible, but if large enough, this would have made the difference andmade the economy grow enough. As Obama's chief economic advisor a much of theblame must fall on Summers for this. And who was responsible for the Obamaadministration not filling vacancies on the Board of Governors proptly. If Summershad been doing his job, he would have pointed out the urgency of taking care of thismatter.

Summers probably is the person most responsible for the losses the Democrats willhave this Fall. All I can say is GOOD RIDDANCE!

Reply September 22, 2010 at 03:42 PMGlen 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 PMRobert 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 PMCawley said...I think I'm going to be sick ...

Reply September 22, 2010 at 04:23 PMchristofay said...Wowie. you are completely captured.

American economics has to be re-evaluated downward

Reply September 22, 2010 at 04:24 PMchristofay 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 1933unleashed Ferdinand Pecora on Wall Street didn’t happen in 2009. I think LarrySummers was tasked with marginalizing Paul Volcker, who could thus serve the newadministration as moral window-dressing without actually causing trouble. I think itwas understood from the outset that any meaningful economics program must involvetaking Wall Street to the woodshed, and that this must not be allowed to happen. I

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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 PMBarry said...Brad, what has Larry Harwh*re Summers done, aside from fail his way upwards, like aself-made Dubya?

Reply September 22, 2010 at 05:41 PMdfvdfvd said...Summers only changes his mind if you argue from his worldview, that's why he is sooften very wrong.1. Summers spent all of the 90's being completely wrong on climate change, becuase hewouldn't interpret evidence outside of his mental box.2. He was completely wrong on finance, with horrible results from the 90sderegulation, and did everything to ostracize people like Rajan who argued from adifferent perspective. Rajan had theory and data and was right, but Summers gave himthe 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 shewas, 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 terriblejudgements. Lots of people would be better at the job.

Reply September 22, 2010 at 06:18 PMAndrewBW said...The graveyards are full of indispensable men.

Reply September 22, 2010 at 06:32 PMBloix said...The rock on which the Obama administration has foundered is the undersizedstimulus, which is Summers' fault. We have 10% unemployment and are facing aRepublican resurgence because of Larry Summers. If, say, Brad DeLong had heldSummers' position, we would now have perhaps 7% unemployment, a growingeconomy, and a Democratic lock on government for a generation.

Reply September 22, 2010 at 06:47 PMBill said...At some point, Obama has to be something other than a vessel for the past Clintonadministration. There are many good economists out there; there is a need for freshideas. JFK didn't bring in Truman's economic team, and Obama shouldn't have pickedup the past.

He's there now. There are many good persons out there, not only those who haveserved in the past.

The past can be a shackle.

Reply September 22, 2010 at 06:54 PMCranky 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 verycapable and accomplished technology people. The reason the former are notautomatically the latter, and in my experience the brilliant often fail to accomplishanything useful (particularly in production operations). Many reasons for this, butchief among them is that people busy expounding on their brilliance seldom (a) reallylisten 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 tokeep checking and double-checking and coming in from a different angle andquestioning one's hypothesis until one is certain the problem is 100.1% solved - andthen coming back the next day to be really sure.

Cranky

Reply September 22, 2010 at 07:02 PMold scotsman said...I can't agree with you about either Larry or Tim, Smart, yes, but helpful andinnovative, not. Larry did a lot of harm as Harvard President.

Reply September 22, 2010 at 07:51 PMAmit Chokshi said...This job is not that "complex"...it's really quite basic and we have historic data to helpus figure out what to do. We could burn $1T dollars in open view literally and it wouldnot 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 $1-2T 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 thisw/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 allissuing massive amounts of debt...cost of capital for high credit cos is dirt cheap. US isthe highest credit quality in the world, we can borrow under 4% long-term, 10 year at2.5%? We can't earn a higher IRR than 2.5% on that...pathetic.

Reply September 23, 2010 at 04:54 AMNeal said...The facts remain apparent--an economic revival program consisting of an undersizedand poorly targeted stimulus, and the programs of cash for clunkers and housepurchase tax rebates that proved to be temporary accelerants. Nothing of that scalesince 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 asthe record of the result of the few actions taken, along with the lack of effective privateand public advocacy for larger or additional programs makes him the entirelydispensable man.

Reply September 23, 2010 at 05:33 AMchristofay said...At the fifty something comments market, it is 49 regular citizens against, and twoprofessional 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, upfrom 43% when the recession started in 2007 and 61% when it supposedly ended, it'shigh time to consider dignity and respect when publishing cold statistics. How good ofa thing is it for a president to tout his achievements in front of TV cameras while fastincreasing numbers of those who voted him into office see no way out of their miseryanymore....

'Just like the GDP is a perverse standard of "wellness" as long as people suffering inhospitals from long term ailments, and those who get severely injured or die in trafficaccidents, count as positive contributions to that standard, the NBER’s definition ofrecessions isn’t just one of those 1300 in a dozen lies politicians love to tell in order towin votes. It’s a bright red flashlight warning of deep rooted cynicism....

'Special White House economic adviser Larry Summers will leave and return toHarvard. 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, andmoreover provided investment advice that cost the institution tens of billions ofdollars. Second, Summers was at the Treasury under Clinton and as such instrumentalin repealing Glass-Steagall, kicking out Brooksley Born (once a sexist pig, ...) andmaking sure there would be no limits on the new “creative” financial instruments thebanking 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 toleave just like that? Let’s give him a medal, why don’t we? Chief of Staff RahmEmanuel will go his way as well, to further collapse the city of Chicago. My moneywould 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 middleaged men dropping their pants to moon the American people. leaning out of thewindows 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 presidentwho decides to tackle a plunging economy with the same guys who made it plunge inthe first place shouldn’t in an ideal world get away with merely easing them outhalfway through his term. That can’t be where the buck stops, not in a properlyfunctioning society. Such a president should admit his failures and leave too. Thatwould be dignified, respectful of the people.

'It's not going to happen, men of principles are nowhere to be found in Washingtonanymore, and if they would pop up, they'd be found sleeping with the fishes in thePotomac tomorrow morning.'

http://theautomaticearth.blogspot.com/2010/09/september-22-2010-cant-touch-this.html

Reply September 23, 2010 at 06:08 AMchristofay said...Now that previous comment can be dismissed Rahm-like as coming from a leftist sofor a different perspective we can turn to Barry Ritholtz:

'The bad news? I am not sure what (if any) impact this will have on theadministration’s economic policies.

'To review: Summers is the former Clinton Treasury Secretary, mentored by RobertRubin. As such, he was one of (many) architects of the financial crisis. In addition tobelieving all of the usual foolishness about efficient markets, he bought into the radicalderegulation arguments pushed by the free market absolutists.

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'Summers was the Treasury Secretary when Glass Steagall was repealed. Instead ofspeaking out against the irresponsible Gramm–Leach–Bliley Act (Financial ServicesModernization Act of 1999) that allowed the Financialization of America to progress,he actively supported it. Instead of explaining to the public how Glass Steagall hadprevented every Wall Street crisis since the Great Depression from spilling over ontoMain Street, he rolled over for Citibank.

'Understand that the repeal of Glass Steagall was not a cause of the crisis. But, itallowed the net damage to be far greater and extend far wider than it would haveotherwise been. From a libertarian perspective, it was emblematic of the corporatetakeover of the legislative process. For a hefty fee (aka campaign donation) you couldpretty much write the regulations that covered your own industry. How could that evergo wrong?

'Summers oversaw the passage of the even more ruinous Commodities FuturesModernization Act of 2000. The CFMA exempted all financial derivatives from any andall regulatory oversight. The CFMA not made the AIG collapse possible, it made ithighly likely. It helped to set up both the Lehman and Bear Stearns’ collapses. TheCFMA allowed AIG FP to write over $3 trillion in derivatives, reserving precisely zerodollars 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 bankingsystem, and were unlikely to do anything that threatened the existing order. Evenworse, it created a dynamic where the new administration was committed to defendingthe policies that helped to contribute to the crisis in the first place. Instead of To Hellwith the Banks, Save the Banking System, we got the exact reverse. This was Rubin’slasting gift to the Obama White House: A third term for George W. Bush’s economicpolicies. When Obama becomes a one-termer, it will be his own fault for following thishorrific economic advice.

'Summers was incapable of saying, let’s repeal the Glass Steagall Repeal; lets overturnCFMA. Rather than fix what was broken, he stayed committed to the same bad ideasthat led to crisis and collapse.'

http://www.ritholtz.com/blog/2010/09/summers-good-riddance/

Reply September 23, 2010 at 06:39 AMchristofay 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-stand-obama-2010-9

Which should be a lesson to washington democrats, get the re-election fund compsbefore you give away the treasury

Reply September 23, 2010 at 06:41 AMthe idler said in reply to christofay...Saw "Neutron Jack" Welch today on CNBC. Looked like the Crypt Keeper. Are GEshareholders still paying for his toiletries?

Reply September 23, 2010 at 08:23 AMJohn Q said in reply to Brad DeLong...Romer had evidence and argument. (Correct, as we now sadly see.)

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So how come Summers didn't change "his way" to "her way", if what you say about himis correct?

Reply September 23, 2010 at 08:41 AMCal said...You are letting your friendship cloud your analysis. Summers was not right for this jobbecause he was part of the problem to begin with.

Reply September 23, 2010 at 09:52 AMDeja-Vu said in reply to mike...You're right. I'm referring more to mainstream, academic economics in general in theAnglo-American world. Even though I agree with De Long a lot of the time now, Idon't know his history that well. For example, didn't he support deregulation of financeat 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 theyhave little if any influence on policy or much presence in Anglo-American economicsin general.Anyway, his forbearance towards Summers and the Democrats places Prof. De Longsquarely in the mainstream, the perpetrators of this disaster and hence, the need forhumility on his part. Especially when my posts get deleted.

Reply September 23, 2010 at 09:53 AMsglover said...Every now and then DeLong produces a post that serves as a kind of calibrationstandard, and this is one of them. Just when you think that he and his "science" mightactually be within a light-year of "grasping reality", he cranks out something to remindyou of how totally cloistered and clueless he really is.

Even with that in mind, DeLong's amazingly bad judgement can still astonish. Iwould've thought that by now he'd have at least a speck of doubt about Larry's self-proclaimed "talent".

Reply September 23, 2010 at 10:32 AMnemo 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 hisjob, 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. Iliked them, and I thought they were smart.

But liking and respecting them doesn't blind me to the fact that in most importantmatters they were dead wrong, and that in the case of Wolfowitz especially, did thingsthat were terribly damaging to our country.

Reply September 23, 2010 at 02:37 PMBarry said...Brad: "Larry is superb at figuring out how to present complicated arguments to makethem comprehensible to non-experts, and at setting up frameworks for discussion anddebate 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 thathe's the guy who walks in, wins arguments, and shuts down other people.

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Me: Economists:Juicebox Moral

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 PMComment below or sign in with TypePad Facebook Twitter and more...

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I Want the Facts: Ray Griggs' I Want Your Money reviewedMedia Matters for America - Oct 19, 2010In a November 17 post on his personal blog, University of California-Berkeleyeconomics professor Brad DeLong wrote, "Private investment recovered in a very ...Related Articles » « Previous Next »

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