James Pethokoukis

Politics and policy from inside Washington

Is Larry Summers on his way out?

Jan 5, 2010 17:55 UTC

The anti-Larry Summers buzz grow louder ( such as here, here and here.) There is a lot going on here. Liberals blogs have been all over him for pushing the $800 billion stimulus plan instead of the $1.2 trillion option presented to Obama by Christina Romer.  Liberals, including Paul Krugman, thought it was too small then and have double-downed on that opinion since.  (Alas, no high speed rail or modern-day WPA program for them.)

And the fact that the WH seems unwilling to propose some sort of massive second stimulus that focuses on jobs only makes matters worse — that even though their original unemployment forecast has proven far too optimistic. Then there was a quote from Summers who said the first stimulus wasn’t even supposed to boost jobs as opposed to output.

Not that liberals have ever loved Summers. He was part of Team Clinton which chucked the left-wing agenda in favor of deficit reduction. There was his stormy tenure at Harvard. And Summers worked at hedge fund DE Shaw, a  big no-no since the financial meltdown.

And all of this happens alongside healthcare reform, which liberals are angry about since deficit concerns helped deep-six the public option.

Unless the economy double-dips, I don’t seem a major shakeup on the WH econ team before the midterms. If the midterms go badly for Dems, though, Summers might depart. Maybe Geithner, too.  Though who would replace them if Wall Street folks and ex-Clintonites are off limits with an angry base?  Mark Zandi?  Jared Bernstein from the Veep’s office? Leo Hindery? I could see Rahmbo at Treasury, though.

COMMENT

Pretty smart guy, this Summers, much smarter than I. Failed, though, to connect the dots on derivatives and the monstrous distortions caused by the GSEs. Bit of a blind spot, it seems. Like so many at that level of power and intellect, probably too lost gazing at his own reflection to realize his worldview is a narrow as a country cracker like me. Too bad, really, having one’s name remembered as the voice of reason for encouraging an $878 billion stimulus to nowhere instead of one above the $1 trillion mark. But, whether he likes it or not, he is just a Keynesian now, part of our gang sending the dollar to the outhouse, industry to India, and kicking liberty to the curb. If he is on his way out, it just proves that intellect and common sense are mutually exclusive.

Or, maybe he is showing his handlers that he has got some serious buyers remorse with all the spending on political puffery? Nah, probably just too many egos in the room.

Lazy Jack

Larry Summers: Tax increases won’t hurt economy

Nov 2, 2009 14:51 UTC

Here is Obama economic guru Larry Summers at the Economic Club of New York: “I don’t find there to be much evidence that suggests that raising top marginal tax rates from 35 to 39 percent that will be implicit in the repeal of the Bush tax rates will do substantial damage to incentives in the economy.”

1) Remember that the 1993 Clinton tax increases — the Bush tax cut  expiration would restore some of those rates – -happened when the economy had been growing briskly since the 2Q 1991. A very different situation today.

2)  Here is WH CEA Chair Christina Romer’s take on higher taxes when she was a econ prof at Berkeley: “Tax increases appear to have a very large, sustained, and highly significant negative impact on output … [and] that tax cuts have very large and persistent positive output effects.”

3) This tax increase would be in addition to possible healthcare and energy taxes.

COMMENT

Consider the source, period! Why should We be required to pay higher taxes to make up for the incompetence, greed and arrogance of both sides of the political aisle?

Posted by RMM | Report as abusive

Applying the Summers-Google metric to healthcare reform

Jul 20, 2009 19:26 UTC

So does more public interest in healthcare reform help or hurt?

july20googhealthchart

But Google searches on ‘unemployment’ are headed higher, Mr. Summers …

Jul 17, 2009 18:45 UTC

Larry Summers didn’t mention this metric in his speech:

googlunemp

COMMENT

Until we get a handle on foreclosures in this country, I don’t see how a long term recovery is possible. I would expect this metric to continue to rise or at the very least stay at an elevated level for some time. Mr. Summers needs to spend some time in the real world (outside of Washington)to gain a more realistic perspective of just how bad things are in both the real estate and the job market.

Summers: Google searches prove economy is recovering

Jul 17, 2009 18:35 UTC

White House economic adviser Lawrence Summers said in a speech today that the number of people searching for the term “economic depression” on Google is back down to normal levels, proof anxiety and fear are on the fade. OK, here is the chart:

2googledep

And here is another chart of consumer confidence from the Conference Board …still a ways to go:

conboard1

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