My least favorite of Obama's appointments was Larry Summers for head of the White House National Economic Council. This is the guy, who, along with Robert Rubin and Phil Gramm, deregulated the financial sector in the 90s. He would be one of the last people I'd ask to fix the current economy. But since he's been appointed the question is whether he'll be willing to sacrifice his failed ideology to do what is necessary for the economy. As Naomi Klein put it, "Is Lawrence Summers' ego too big to fail?"
Looks like it might not be.
In his piece in the Washington Post today titled Obama's Down Payment, Summers said just about everything he should have. He's talking about investments from the government, and long term stability.
He says this:
In this crisis, doing too little poses a greater threat than doing too much. Any sound economic strategy in the current context must be directed at both creating the jobs that Americans need and doing the work that our economy requires. Any plan geared toward only one of these objectives would be dangerously deficient. Failure to create enough jobs in the short term would put the prospect of recovery at risk. Failure to start undertaking necessary long-term investments would endanger the foundation of our recovery and, ultimately, our children's prosperity.
Okay, so it's not the most original thing ever written, but this is beautiful coming from Larry Summers.
And there's even this:
Laying the groundwork for recovery and future prosperity will require shedding Washington habits. We must measure progress not by the agendas of interest groups but by whether the American people experience results. We must focus not on ideology but on drawing the best ideas from all quarters. That is why, for example, in key sectors such as energy, Obama is pushing for both public investments and the removal of barriers to private investment. It is also why his plan relies on both government spending and tax cuts to raise incomes and promote recovery.
A guy like Summers should never have been rewarded with a post like this. But now he's talking like a reformed man, and I'm much less worried that he'll block or subvert Obama's economic agenda. He still has to prove himself during the administration, but he's already taken the hit to his ego. Deregulation didn't work. Keynes is in and Greenspan is out.