As President Obama’s chief economic adviser exits, The Daily Beast speaks to leaders in business and politics, including Donald Marron, Desiree Rogers, Niall Ferguson and Jesse Jackson about Summers’ departure—and who should take his job.
Lawrence Summers, President Barack Obama’s top economic adviser, is headed out the White House door, becoming the latest in a string of leading policy wonks to bail on the administration. Summers won’t leave his position as National Economic Council director until after the midterm elections, according to reports. The timing is both ordinary—turnover regularly occurs inside the West Wing after the first half of a president’s term—and also a clear reminder of what has Obama and the Democrats in such a bind come November: the economy.
Summers and his economic team had an unenviable job, figuring out a way to jump-start the economy after the collapse of 2008. While economists say the Obama stimulus kept the country out of a deeper hole, Summers’ performance received jeers from all quarters. Some Democrats were frustrated that Summers, far from a fresh face in D.C. with deep ties to Wall Street, was put in charge of cleaning up the financial mess. Republicans cried foul, as the Obama administration promised that the unemployment rate would max out at 8 per cent, only to have it creep up toward 10 per cent. To make matters worse, Summers brought a sharp-elbowed style—the same approach to leadership that got him bounced from his job as the president of Harvard—into a position that is supposed to be conciliatory by nature.
The Daily Beast called on a Wall Street power broker, financial veteran, former governor, and Beltway residents past and present with deep ties to the Obama administration to react to Summers’ departure. Here are the early reviews:
Author of The Ascent of Money: A Financial History of the World
The outgoing White House economic adviser can alienate a room in record time. But Niall Ferguson says his intellect is worth the trouble—and he helped stave off a Great Depression.
“He’s brilliant, and has a great point of view on economic thought and he brought to the administration government experience, which everyone wanted to see when Obama took office. The big question is what should happen next. What’s very important for this administration is someone with business experience, someone who has created jobs. Whether or not you agree, they’ve gotten through these two big reforms, health care and financial reform. Now, job creation needs to be number one, with visible economic growth number two—whoever gets this position needs to understand that, and be an excellent communicator.”
“The departure of Larry Summers from President Obama’s economic advisory free-market squad is similar to that of the high school degenerate who left the keg party after the last barrel was emptied and the place was demolished. Only it was the reckless financial deregulation he promoted through the Glass-Steagall repeal as treasury secretary in 1999 that led to the Great Bailout Party of 2008, where Wall Street drank the federal subsidy barrel dry and left the general economy trashed. It’s high time he left, but it should have happened long ago. Now, if only Treasury Secretary Tim Geithner would follow suit.”
“Larry Summers is so smart that listening to him sometimes makes your head snap. He has an analytic rigour and intellectual honesty that makes him congenitally prone to toss hand grenades whenever he spots pockets of fuzzy thinking, which is often. This does not always make him popular, but it does make him invaluable—especially in an era when fuzzy thinking is rampant. History will note that he was among those who helped stop a precipitous financial meltdown. His flaw was that he sometimes gave rigour and intellectual honesty a bad name by reminding people how unsettling it can be. He’s easy to parody, as he is in a priceless scene in the forthcoming Facebook movie, The Social Network, but. Harvard is damn lucky to have him back. And he will write a seminal book on the 21st century global economy.”
“Don’t make too much out of it. Everyone does their stint and then they go back to their real lives.”
“Larry Summers is to a large extent responsible for the administration’s inadequate answers to the economic problem. It’s not that Larry Summers hasn’t done a lot. It’s that he hasn’t done enough…he had a chance to do it right at the beginning, but Summers underestimated the depth of the economic crisis and he did not underestimate it accidentally. He underestimated it because his view of the world is very Wall Street-centric, so once they had saved Wall Street, they thought everything else would follow naturally. And the fact that the two economies, Main Street and Wall Street, de-coupled, was not on his radar screen.”
Rev. Jesse Jackson
“I hope that his replacement is someone from a different school of thought. I think we need some bottom-up visionaries…The core of them—Summers, Geithner—these guys come out of the Wall Street, Harvard community and their point of view is conditioned by their privileges and their point of view is conditioned by their experiences. Their point of view is from the top down. They see the world differently.”
“It gives the president an opportunity to stake out a new direction in terms of messaging to the public, which is one important component of this with six weeks left before the midterms to make a dramatic statement about middle-class economics as opposed to Wall Street economics…I would love to see Obama say, ‘Elizabeth Warren shouldn’t be the assistant to the treasury secretary, make her the [director of the National Economic Council] because you need a voice for middle-class America in policy circles now…I have been pretty open about my disagreements with Larry Summers and Tim Geithner. At the moment of his resignation I don’t think it’s right to critique it that way, but it gives the president an opportunity.”
The departure of Larry Summers leaves a power vacuum in Washington. Look for Obama’s Chicago circle to fill it—and watch the gloves come off.
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