What does the likely appoinment of Larry Summers represent? We've heard a lot about the "centrism" of the new cabinet and about Summers' past role in the Clinton administration and his "sexist" remarks as President of Harvard. But all this misses something much more important...
By now we know that Larry Summers will be the new chief economic advisor for the Obama administration. There is quite a bit of foolishness circulating about the new cabinet, including the idea that Obama's appointments show he is governing as a centrist or (even worse) from the "center-right." Summer's appointment shows this to be just plain wrong.
Summers has come a long way from his days as Rubin protege and supporter and crafter of neoliberal policies. A look at a few of his recent articles from Financial Times shows that he has moved to the left and, in fact, his proposals outlined in these articles have become the center piece of the new Obama administration.
In "The Pendulum Swings Towards Regulation" Summers argues that the financial crisis opens up opportunties to do much more than stablize the existing system. Instead, "the historic challenge of the moment" requires policies that create growth that is more "broadly based" and that invests resources in areas of the economy that will boost long term productivity. What are those areas? Well, they include "renewable energy resources, the broader appliction of biotechnologies and exapnding broadband connectivity." If this sounds familiar it should since it is in large part contained in Obama's sketch of his eocnonic stimulus package.
Summers' conclusion is that we need a "full pendulum swing" toward greater government involvement in saving capitalism from its excesses and in creating prosperity that is more firmly grounded "and inclusive." Sounds like a clear rejection of the neoliberalism he and others played a large part in advancing a decade or more ago. I should also add here that in another article Summers comes out for naitonal health insurance regardless of its impact on the budget deficit.
Not choosing Summers for the Treasury is a pragmatic decision based on the fact that he is not much of a manager and doesn't do well in front of the camera. But he will be key person in the formulation of the new economic policy of the Obama administration and that's a good thing.
This is important and much overlooked. Obama may not have a "movement progressive" (yet) in the cabinet but he has made a break with neo-liberalism with the likely appointment of Summers and has made it clear that a new new deal is on the horizon.