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In a way, this is a terrible shame. As someone who worked two years
inside the US Federal Reserve, starting 30 years ago (last week)
just after graduating from university with a big student loan to
repay, I think it would have been quite marvelous to have had
someone like Summers to kick around. It would really have helped in
the long hard struggle to politicise opposition to that economically
ultra-violent institution. If she gets offered the job, Janet Yellen
will be much harder to identify as the tool of Wall Street (which
she will necessarily be), especially when interest rates soar to
unpayable levels so as to sustain US$ fictions, as happened during
my boss Paul Volcker's reign of terror. Summers has been such a
master of the universe's destruction, that he came to personify the
most venal thinking in relation to race, class, gender and
environment. The fact that Harvard faculty effectively fired him a
few years ago for his sexist buffoonery was just one indication of
fight-back potential. So we will miss you Larry, and do please find
another way back into public life, for you have proven so
very very useful to many of us for our anti-capitalist pedagogy,
e.g. http://www.whirledbank.org/ourwords/summers.html ... and don't
listen to Naomi! *** Why We Should Banish Larry Summers From Public Life Note: The Sunday Outlook section of the
Washington Post has a "Spring Cleaning Special" in which ten
writers make the case for something that deserves to be tossed
out this spring. On the trash heap is everything from academic
tenure to the White House press corps to the phrase "Muslim
world." I chose to argue for the elimination of Barack Obama's
chief economic adviser, Larry Summers.
Published in The Washington Post I vote to banish Larry Summers. Not from the planet. That wouldn't be nice. Just from public life. The criticisms of President Obama's chief economic adviser are well known. He's too close to Wall Street. And he's a frightful bully, of both people and countries. Still, we're told we shouldn't care about such minor infractions. Why? Because Summers is brilliant, and the world needs his big brain. And this brings us to a central and often overlooked cause of the global financial crisis: Brain Bubbles. This is the process wherein the intelligence of an inarguably intelligent person is inflated and valued beyond all reason, creating a dangerous accumulation of unhedged risk. Larry Summers is the biggest Brain Bubble we've got. Brain Bubbles start with an innocuous "whiz kid" moniker in undergrad, which later escalates to "wunderkind." Next comes the requisite foray as an economic adviser to a small crisis-wracked country, where the kid is declared a "savior." By 30, our Bubble Boy is tenured and officially a "genius." By 40, he's a "guru," by 50 an "oracle." After a few drinks: "messiah." The superhuman powers bestowed upon these men -- and yes, they are all men -- shield them from the scrutiny that might have prevented the current crisis. Alan Greenspan's Brain Bubble allowed him to put the economy at great risk: When he made no sense, people assumed that it was their own fault. Brain Bubbles also formed the key argument Greenspan and Summers used to explain why lawmakers couldn't regulate the derivatives market: The wizards on Wall Street were too brilliant, their models too complex, for mere mortals to understand. Back in 1991, Summers argued that the subject of economics was no longer up for debate: The answers had all been found by men like him. "The laws of economics are like the laws of engineering," he said. "One set of laws works everywhere." Summers subsequently laid out those laws as the three "-ations": privatization, stabilization and liberalization. Some "kinds of ideas," he explained a few years later in a PBS interview, have already become too "passé" for discussion. Like "the idea that a huge spending program is the way to stimulate the economy." And that's the problem with Larry. For all his appeals to absolute truths, he has been spectacularly wrong again and again. He was wrong about not regulating derivatives. Wrong when he helped kill Depression-era banking laws, turning banks into too-big-to-fail welfare monsters. And as he helps devise ever more complex tricks and spends ever more taxpayer dollars to keep the financial casino running, he remains wrong today. Word is that Summers's current post may be a pit stop on the way to the big prize, Federal Reserve chairman. That means he could actually make "maestro." Mr. President, please: Pop this bubble before it's too late. |
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