Larry Summers vs everybody else

By Felix Salmon
June 8, 2009

Jackie Calmes got some pretty great access for her 1900-word article on how the Obama economic team works — which, as the Economist notes, “might more aptly be called ‘Larry Summers Disagrees With Everyone’”. (Welcome back to Free Exchange, Ryan, even if that wasn’t you.)

A lot of the article, predictably enough, centers on Larry Summers, the man with or against whom all economic policy seems to be made:

“I am completely comfortable pushing back at him,” Mr. Geithner said in an interview.

“Larry will come to any issue and say, well, here’s all the 16 reasons why there’s problems with that proposal. If he’s got ideas, particularly if I think they won’t work, I say to him, ‘Well, why don’t you make the case against it, Larry, because you’re pretty good at making the case against anything.’ ”

The problem is that Summers doesn’t just push back at ideas in meetings, he also tries to prevent those ideas from even being heard in the first place: Peter Orszag, Tim Geithner, and Austan Goolsbee are all named as people that Larry tried to prevent from having access to the president at various times. (And we all know that Paul Volcker has been successfully marginalized by Summers.)

The upshot of all this fractiousness seems to be that the real decision-making power has ended up in some unlikely hands:

“You can’t assemble a group of really brilliant people, and deal with some of the most complex problems in our lifetimes and not have disagreements,” said David Axelrod, Mr. Obama’s senior political strategist who, with the White House chief of staff, Rahm Emanuel, plays a big role in mediating among the economic advisers and helps shape the decisions.

I’ve been fantasizing for a while about what would have happened if Obama had nominated Rahm to be Treasury secretary. Maybe he did, and just never told anybody!

One comment

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One of the strategies that Obama has used very effectively is to bring all the major players on an issue into the administration, rather than having disgruntled, passed over players sitting on the side lines throwing Sunday morning stones at the administration. Summers, Volcker etc had to be inside in order to keep them from attacking the administration.

This strategy is working, the attacks come from Rush “Let them fail!” Limbaugh, not from “Today we are sitting down with former Treasury Secretary Summers who has some surprising things to say about the state of the economy and the President’s plan”.

The strategy can have problems: too many cooks in the kitchen being a major one. One way to handle this is to put the outsiders on a Presidential Advisory Commission and make sure that they get to have lunch with someone every once in a while. I think this story suggests what Summers’ role is in the administration and how much he can push back too.