any end to the summers plague?…Posted: 2013-08-26
This will come only with the banishment into oblivion of the third still highly visible member of Time magazine’s ‘The Committee to Save the World‘. It was not long before the world would find out which ‘world’ these people did save with taxpayers’ money and which world paid the penalty. Yet, there is One who openly campaigns for him to be the Governor of the Central Bank (Federal Reserve) of the United States, a decision with even greater worldwide implications.
How does the rational world, the world of ‘untainted’, highly respected experts and analysts see this? Let us count the ways, and with necessarily selected excerpts, suggestive of the richness of the full articles.
No need to mention the name Brooksley Born. We can overlook The Warning, the Frontline documentary of 2009, a line in which would provide the title for the book by Simon Johnson and James Kwak. [Of course, the documentary still makes for timely viewing in the very barren desert of cable ‘news’ and ‘talking heads’.]
We can start off with one circumspect observation from Krugman:
Cardiff Garcia mocks the WH position as being that they want a pushover who would be fun to have a beer with during a crisis — and there’s enough truth there to make it sting.
All in all, this whole episode is not making anyone think better of Obama’s judgment.
Dean Baker does some refereeing as an alert Bette Middler does battle with Neil Irwin of Bezos’ WaPo;
Things are getting hot and heavy as the battle for Fed succession moves into the second half. Earlier this week, the Washington Post’s Fed reporter, Neil Irwin, decided to go head to head with Bette Midler over some unflattering tweets about Larry Summers and his prospects for becoming Fed chair. As a public service, Beat the Press is refereeing the exchange.
Ms Midler led off with the tweet:
“HUH. The architect of bank deregulation, which turned straitlaced banks into casinos and bankers into pimps, may be next Head Fed: Summers.”
Baker would subsequently examine brazen attempts at historical revisionism on The Candidate.
James Hamilton would present his case, very straightforward, The Case for Janet Yellen as Federal Reserve chair
John Quiggin would join the fray, adding further evidence of policy for the privileged.
The Keynesian analysis done inside the White House by Christina Romer and outside by Paul Krugman showed that what was needed was a stimulus of at least $1.7 trillion. Based on his subsequent commentary, it’s clear the Summers understood and agreed with this. If he had lived up to his reputation, Summers would have pushed this through the White House by demonstrating, beyond any doubt, that Emanuel was the kind of fool he is famed for not suffering gladly. Instead, he first made Romer reduce the estimate to $1.2 trillion, then dropped it from his brief without telling her, giving Obama a range from $600 billion to $800 billion.
Summers is great at saying the unsayable when it comes to things like shipping toxic waste to poor countries or making baseless speculations about genetics and gender. But when it really mattered, he couldn’t come up to scratch.
Yves Smith, in her analysis, offers a thought that would provoke yet another, of financial blandishments to an articulate and acquiescent and perennial neophyte for unwavering adherence to the agenda of the elite.
So why has Obama gotten on the Summers bandwagon (we were told his candidacy was pushed by a faction in the White House and Obama was not initially on board)? One reason may be simply that he’s a Rubinite and that that faction has the right combination of pedigree, inducements (Obama is likely to follow the Clinton post-presidential playbook of forming a foundation plus giving speeches; no point in alienating a group of your loyal backers if you don’t need to) and 5×7 glossies to be persuasive.
Greg Palast at Vice exposes the way that Larry Summers, Tim Geithner and others in the Treasury Department conspired with JP Morgan and other pirate investment banks not only to destroy Glass-Steagall in the US but throughout the world, removing the difference between commercial banks. and investment banks. Basically, they used US financial muscle to leverage the world into letting banks play poker with your money and forcing regulators to treat toxic bad loans as ‘assets’.
An established and respected journalist’s perspective on the track record of performance and lack thereof of the ‘favoured’ candidate:
I ticked off some of the self-serving lies he told to cover up his own role in destabilizing the financial system when he was Treasury secretary in the Clinton administration—when he personally blocked tougher regulation on the financial time bombs known as derivatives, when he collaborated with Republicans and the Federal Reserve in dismantling Glass-Steagall and other New Deal protections. Larry and Bill, Robert Rubin and Alan Greenspan paved the road to financial collapse. Afterwards, nobody went to jail.
And how does the very circumspect and very respected economist, Mart Thoma, see the candidacy of this very visible member of the triumvirate that saved the world for the financial predators and their accomplices? The title of his post says it all: