StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between

Summers Out?

05 Jan 2010
Posted by Bruce Bartlett
There’s been some blog commentary lately suggesting that NEC director Larry Summers is on his way out. The argument is that there is a White House whispering campaign against him similar to that preceding the departure of WH Counsel Greg Craig. (See here.) I don’t buy it. First, I don’t see the whispering campaign against Summers as anywhere close to that which preceded the firing of Treasury secretaries Paul O’Neill and John Snow. Second, I agree with Jim Pethokoukis (here) that there is no one in the wings in a position to replace him. I’m willing to bet that Larry will still be on the job a year from now.

Xref with DeLong

If you look at Brad DeLong's argument that Treasury posts haven't been filled--and MOST ESPECIALLY at the comments below it that note that the Administration itself has been dragging its feet--it's difficult not to see this as some combination of (1) Summers doesn't need, or doesn't believe he needs, any help, (2) people don't want to do important work, only to have Larry overrule them, and (3) Summers and Geithner are so poor in their communication that people fear for their reputations.

It might not be a bad idea for Summers to leave, independent of the politics surrounding it.

Not really losing sleep over it.

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 as 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 and those that cannot connect them eventually get pummeled.

Or, maybe he is showing his handlers that he has got some serious buyer's remorse with all the spending on political puffery? Nah, probably just too many egos in the room arguing over what to nationalize next.

Lazy jack


I will believe that Summers and Geithner are on their way out when I start to hear plausible names to replace them. That's especially the case with Geithner's replacement because he or she would require Senate confirmation. Can you just imagine what a mess that would be in this political climate? Like it or not, Geithner is here to stay. It's a little more plausible that Summers could be eased out of his NEC position, but I still think he will be in the same spot a year from now.

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