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Jesus Malverde

(10,274 posts)
Fri Sep 13, 2013, 11:25 AM Sep 2013

The Case Against Larry Summers [View all]

The Federal Reserve chairman wields such enormous power, with so little accountability, that he or she is said to be the second-most-powerful person in government after the president. Decisions are habitually made in secret. The job requires a person of great personal tact, subtlety, and self-control. It requires someone who knows how to build consensus at the highest levels for the right kind of policies—someone who possesses the maturity and character to admit error and shift course when needed.
But, according to numerous accounts from those who have worked with him, Summers has often displayed the opposite attributes during his long career. Behind the scenes, he has used his power, combined with intellectual arrogance, to bully opponents into silence, even when they have been proved right. He has refused to allow his dissenters a voice at the table and adopted a policy of never admitting errors.

And Summers has made a lot of errors in the past 20 years, despite the eminence of his research. As a government official, he helped author a series of ultimately disastrous or wrongheaded policies, from his big deregulatory moves as a Clinton administration apparatchik to his too-tepid response to the Great Recession as Obama's chief economic adviser. Summers pushed a stimulus that was too meek, and, along with his chief ally, Treasury Secretary Timothy Geithner, he helped to ensure that millions of desperate mortgage-holders would stay underwater by failing to support a "cramdown" that would have allowed federal bankruptcy judges to have banks reduce mortgage balances, cut interest rates, and lengthen the terms of loans. At the same time, he supported every bailout of financial firms. All of this has left the economy still in the doldrums, five years after Lehman Brothers' 2008 collapse, and hurt the middle class. Yet in no instance has Summers ever been known to publicly acknowledge a mistake.

Wielded by a Fed chairman, those personal traits and policy attitudes are a potentially combustible mix at a time when the Federal Reserve has become, more than ever, the most powerful economic institution on earth, and when re-regulation of the global financial system is substantially in the hands of the Fed. The man whom Summers once considered a model chairman, Alan Greenspan, offers an example of the dangers of being too certain of one's views without much accountability. Back in 1994, Congress instructed the Fed to police unfair and deceptive practices related to mortgage loans. But because the chairman believed in minimal regulation, no rules were ever written; Greenspan quietly slapped down efforts by governors such as Ed Gramlich to warn him; and the Fed did little to intervene in the emerging subprime fraud.

There is no question about Summers's intellect and experience. But would he have the character, temperament, and maturity to listen to a naysayer enough to admit error and reverse course in the next crisis? His history suggests otherwise.


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The Case Against Larry Summers [View all] Jesus Malverde Sep 2013 OP
I love the constant feigning of ignorance. Or maybe it's not feigned at all. "I mean it's Guy Whitey Corngood Sep 2013 #1
Don't all government positions require that the person be able to treestar Sep 2013 #2
Wrong? trumad Sep 2013 #3
He's responsible for cratering the economy? treestar Sep 2013 #4
he's one of the main architects trumad Sep 2013 #10
of what? And under Clinton? treestar Sep 2013 #11
I'm not giving anyone a pass trumad Sep 2013 #17
Now I do treestar Sep 2013 #25
Can you state an actual postive case for why Summers would be the best choice? Bluenorthwest Sep 2013 #5
No. But the abject hatred here treestar Sep 2013 #7
But 'abject hatred' is just your hyperbolic characterization. To say 'should not Bluenorthwest Sep 2013 #13
I knew you'd work your one issue into this treestar Sep 2013 #14
I'm talking about things YOU have said and comparing them to what YOU Bluenorthwest Sep 2013 #15
Amazing eh? trumad Sep 2013 #18
Not just hate, but 'abject hate' and the gasp that it surprises her, this abject Bluenorthwest Sep 2013 #19
She really does not her history to the financial meltdown. trumad Sep 2013 #21
Most people probably wildly disagree about the financial meltdown treestar Sep 2013 #24
Oh there's the 'H' word Maven Sep 2013 #22
Well, dissenters are considered mentally ill in these parts now QC Sep 2013 #27
He's been 'building consensus' against the peons for years leftstreet Sep 2013 #6
What legislation and what bankruptcy modifications? treestar Sep 2013 #8
You defend him, but know nothing about him? leftstreet Sep 2013 #9
I don't pretend to know everything, as you do treestar Sep 2013 #12
end game questionseverything Sep 2013 #16
From what I've learned today of him treestar Sep 2013 #23
Needs some soap for those warrant46 Sep 2013 #28
Not this one. This is raw, unilateral, autocratic power. cthulu2016 Sep 2013 #20
When we all were calling for Roosevelt type responses to the upaloopa Sep 2013 #26
or to simplify the thesis.... whistler162 Sep 2013 #29
Summers is a horrible choice. Enthusiast Sep 2013 #30
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