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Fatwah / November 11, 2008

We all know in the backs of our minds that Barack Obama’s incredible victory will eventually be followed by disappointment. But does it have to come so soon, and hit so hard? The answer will be yes, if Lawrence Summers is named treasury secretary in the president-elect’s cabinet, as many observers believe will be the case. Summers was one of the key architects of our financial crisis–hiring him to fix the economy makes as much sense as appointing Paul Wolfowitz to oversee the Iraq withdrawal. And when you look at the trail of economic destruction Summers left behind in other crisis-stricken countries who sought his advice in the past, then “terror” might be a more appropriate word than “disappointment.”

The conventional wisdom is that Summers is the “centrist” choice–Fareed Zakaria (“I think Summers is an extraordinarily brilliant guy”) and David Gergen (“Larry Summers would be superb at this job”), two titans of centrism, both weighed in Sunday on the Stephanopoulos show in favor of Summers. And yet so far the debate over Summers has been largely confined to two outrageous moments in his career: his 1991 World Bank memo calling Africa “UNDER-polluted,” and his more recent declarations, while serving as president of Harvard, about women’s genetic inferiority in math and science. By themselves, these two incidents might be dismissed as merely provocative in a maverick-moron sort of way, as many of Summers’ supporters argue; but in the context of Summers’s track record, in which he oversaw the destruction of entire economies and covered up cronyism and corruption, his Africa memo and sexist declarations aren’t exceptions but rather part of a disturbing pattern.

From the start, Summers has been on the wrong side of Obama’s supporters. In 1982, while still a graduate student at Harvard, Summers was brought to Washington by his dissertation advisor Martin Feldstein, the supply-side economist, to serve on Ronald Reagan’s Council of Economic Advisors. Those first years in the Reagan administration were crucial in the right-wing war against New Deal regulation of the banking system and financial markets–a war that Reagan’s team won, and that we’re all paying for today. Although Summers eventually identified himself with the Democratic Party–albeit the right wing of that party–nevertheless, as the New York Times‘s Peter T. Kilborn wrote in 1988:

He worked for 10 months as a top analyst in President Reagan’s Council of Economic Advisers when his mentor, Martin S. Feldstein, was running it, and his colleagues don’t recall him venting anti-Reagan heresies then….

“One of the ironies of this business is that Summers’s economics are quite close to Feldstein’s,” said William A. Niskanen, who was a member of the Feldstein council.

It’s ironic if you expected Summers to be a liberal Democrat–but par for the course in the context of Summers’s real record. Some fifteen years after Summers’s stint in the Reaganomics war room, he reappears as one of the key villains fighting to suppress the regulatory efforts of a top official, Brooksley Born, who was trying to call attention to the dangers of the unregulated derivatives, such as credit swap defaults, which today are considered the key to the current economic crisis.

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  • 1. Jim Pivonka  |  November 18th, 2008 at 11:47 am

    Thanks for this. While I was pretty familiar, I thought, with the history of these events Summer’s involvement in them had escaped me completely. He was a cipher to me, except for his time at Treasury working for Rubin, who I have had a lot of respect for, and his utterly disastrous time at Harvard. I am so glad that community and institution spat him up before he did serious and lasting damage.

  • 2. Arthur Stamoulis  |  November 19th, 2008 at 11:15 am

    For folks on Facebook, there is a new group called “Is Larry Summers Really the Best We Can Do?” Please join it and share your thoughts…

  • 3. Huzzah  |  November 19th, 2008 at 11:57 am

    Is this supposed to be a humour site? It reads like a comedy of evil errors nonetheless.

  • 4. Corky_screw  |  November 27th, 2008 at 4:54 am

    These guys are about to do some serious damage (obama’s administration). The same happened in the great depression (54 banks bought up) as now, except that the treasury is long since privatised (1913) and the 35% fed tax never goes into gov’t hands – so why should they care to help you get your lost money back if they stole it from you (ever since the fed’s inception)?

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