Comments on: The good things about Larry Summers

By: Ken Houghton

Ken Houghton — Tue, 06 Oct 2009 18:38:45 +0000

Cash for Clunkers worked: addressed externalities, got people buying, is a large part of the positive GDP all y’all are talking about for Q3.

It was, as with most ObamaNation initiatives, poorly discussed. (For someone who is a “leader,” BarryO has been drug around by the likes of Max Baucus and Joe Liarman.)

That said, the “first” stimulus is a concrete example of Failed Obama Policy–of which he himself admitted (and John Emerson noted on this blog) that he “started with his ultimate compromise” and got whittled down from there.

By: Sanjay

Sanjay — Tue, 06 Oct 2009 14:08:39 +0000

There’s also the closing of Gitmo, which was probably the most high-profile policy rollout.

By: KenG

KenG — Tue, 06 Oct 2009 14:05:44 +0000

For those who are saying Obama is not in control of getting his plans implemented (e.g., health care, the stimulus package), or that Bush did a better job (@Kyle), keep in mind that Bush had Tom DeLay to strong-arm his own party into doing whatever the Bush/Rove/Cheney machine wanted. There is nobody as sleazy in the Democratic party to get Obama’s platform accepted by everyone in his own party. There is no hammer, just a bunch of congressmen who think that because they got 100,000 votes that their lobbyists know what’s best for the nation.

By: Carol SHANNON

Carol SHANNON — Tue, 06 Oct 2009 01:52:58 +0000

If you are looking for bad policy, poorly executed, you can start with the Cash for Clunkers debacle.

By: Sanjay

Sanjay — Tue, 06 Oct 2009 01:43:44 +0000

I’m an Obamaphile an I dearly love your blog and your analysis, but there’s such an obvious example of biffed Obama policy that my jaw drops when I read your three criteria: Obama intervened heavy-handedly to switch out generals in Afghanistan to put a guy who did COIN in, committed 17K more troops, went around the world telling other people to put in more troops — and months after doing all that hasn’t so much as settled on his war aims. I mean, c’mon!

I’d say he’s also been in poor control of healthcare policy rollout.

By: Kyle

Kyle — Tue, 06 Oct 2009 01:43:18 +0000

“does the pursuit of policy count, like healthcare?”

It shouldn’t if we’re asking the parallel question we asked about Bush. Bush was very effective at getting a number of his policies past. Tax cut, NCLB, and the Iraq War all involved fairly impressive political skill in gaining support.

By: Uncle Billy Cunctator

Uncle Billy Cunctator — Mon, 05 Oct 2009 19:50:15 +0000

KenG: After looking at Jamie Dimon’s smirk while being interviewed by Charlie Rose, as he says [approximately] “Buying a house and and buying a house on fire are not the same thing,” I am a very difficult person to convince of this.

After seeing Madoff go to prison without giving up his bosses… I am a very difficult person to convince.

After seeing the level of capture of the financial world on both the national and global level, blah blah blah…

After seeing who sustains the NBER, CEPR, CEP, NSF, etc, blah, blah, blah…

After looking into the Bank for International Settlements, World Bank, IMF, Import-Export Bank, etc., blah blah blah..

After watching people attend the Milken Conference year after year to honor Milken the philanthropist, blah, blah blah…

After finding out just how people like Warren Buffett and George Soros make their money, bbb…

After looking at the Boards of NYU and Columbia, and the like, blah, blah blah…

After finding out that the same people who are most prominent econ/financial bloggers on the web are often the same people who orchestrated the privatisations in Russia, blah blah blah.

After finding out what a number of economists and Swedish Bank Nobel winners did for a living while in academia, and who they did business with afterwards, bbb…

After realizing the extent to which the people who own the largest media outlets and monopolize the econ blogosphere are associated with the financial world, bbb….

The kids were given enough rope to hang themselves; the matches were left for the kids knowing they would start fires after plenty of accelerant was sprinkled around.

If you don’t know this by now, you haven’t been paying attention.

Google…

“Uncle Billy” & “Pelerin”
“Uncle Billy” & “Cunctator”
“Uncle Billy” & “Mental Widget”
“Uncle Billy” & “Mental Gidget”

going back over the past 4 years. Gather up all the posts, print, and you’ll have a sprawling indictment that only begins to get at the whole megillah.

By: KenG

KenG — Mon, 05 Oct 2009 17:26:25 +0000

Uncle Billy, I don’t think there were arsonists, just a bunch of kids playing with matches while the alleged adults were so busy eating that they didn’t notice what the kids were doing. Although I guess some of the adults believed the kids would act in their best interest and not start a fire, and other adults just thought any fire that got started would be put out by another fire. You know, the magic of the kitchen. But it’s all good now, we’re going to get a brand new house, and the grandkids will pay for it.

By: Uncle Billy, Cunctator

Uncle Billy, Cunctator — Mon, 05 Oct 2009 16:04:05 +0000

“So if your kitchen was on fire…”

Nicely put, but we’d better think about identifying the arsonist more clearly too.

By: KenG

KenG — Mon, 05 Oct 2009 14:25:54 +0000

Bush has set the bar so low, that now when the government doesn’t totally screw up, we give out high grades. Yes, it’s great the financial system didn’t disintegrate, but that feat could have been accomplished more efficiently. Too many executives who performed horribly still have jobs, and the compensation system for financial companies doesn’t reflect the fact that earnings of companies in this industry, and therefore the bonuses of their employees, have been greatly subsidized by government funding and guarantees.

So if your kitchen was on fire and the Bush fire department’s response was to let it burn it self out, and the Obama FD decided to flood the entire house to put the fire out, you would might say that at least it didn’t burn down, and congratulate the Obama team for not burning the whole house down. But you know there could have been a better way to stop the fire without having to call those over-priced, labor exploiting vultures from service master to clean up the flood damage.

By: Barry

Barry — Mon, 05 Oct 2009 13:19:29 +0000

“What I’m particularly happy about is that the debate took place, in a lot of detail, within the White House, between people who had no ideological axe to grind and who were intent on working out the objectively right thing to do, given the uncertainty surrounding the banking system and the economy.”

Are you trying to say that Summers isn’t ideological?
Geithner? Bernanke?

“1. It is a policy initiative of the current Obama administration
2. It was significant enough in scale that I’d have heard of it (at a pinch, that I should have heard of it)
3. It wasn’t fundamentally extremely well-managed during the execution. ”

Healthcare reform. Assuming, of course, that the goal is healthcare reform, and not a sequel to Medicare, Part D – bigger, worse and more profitable for the insurance companies.

By: foosion

foosion — Mon, 05 Oct 2009 13:16:30 +0000

>>In hindsight, Summers was right and those urging nationalization were wrong.>>

Please explain you reasons for this statement.

By: charles

charles — Mon, 05 Oct 2009 09:46:16 +0000

“In hindsight, Summers was right and those urging nationalization were wrong.”

Really ? How did you come to that conclusion? As far as I can see, the “saved” banks are retreating on lending to SME and retail, stuffing their balance sheet with safe bonds (mainly govies) and recapitalizing themselves by taking advantage of the steepness of the yield curve. This has enormous opportunity costs for the taxpayer (these long bonds coupons will have to be paid one day…), depresses the “Real” economy, and is as close to “free lunch” for the banks than anything. The government, and the taxpayers, bear the burden of banking sector losses and get nothing in return. A nationalization has the same risks, but enjoys the potential upside.

The current situation is more a failure than a success.

By: Uncle Billy, Cunctator

Uncle Billy, Cunctator — Mon, 05 Oct 2009 08:51:57 +0000

The stimulus: The country is a truck driver that’s just guzzled one energy drink after another as he attempts to drive straight through from one coast to the other.

******************

11,500 words. Fantastic… now Prof. DeLong is going to be typing away on his couch for an entire day to top this.

******************

Yes, D.E. Shaw. Summers is mildly interesting. D.E. Shaw? Let’s have a nice fat article about that fellow and his overactive computers. (Bonus: does he still hang out with Jeff Bezos?)

And speaking of mechanical turks, how about Summers’ association with Prof. Roubini and the RGE Monitor. Who actually pays all those RGE “analysts”?

By: Phillip Huggan

Phillip Huggan — Mon, 05 Oct 2009 04:38:53 +0000

Guess I’m saying when derivatives outstanding go to 10x global GDP, a bank market cap correction is a good thing, problem is structural not investor confidence. It is troubling to me this metric is probably already on course to be breached before any watered down reforms and no discount is given as to the effects on psychology of yet another banking bailout. All my advice is basically different ways of saying: maybe don’t keep giving so much money to rich people if they keep mismanaging it, give the middle and poor classes a shot. To me the Nationalization option would’ve been just that and after seeing States cut so many teachers I’d've now suggested (I assume along with many voices about what to do with commie banks) giving them to States to help States raise capital. Is better than re-entering deriviatives casino for sure, pretty much anything is better than bonuses for gambling.

I put $2 on Rams tonight. Someone give me my money back from public purse!!