The deadline for the White House to nominate the next president of the World Bank is 6 p.m. tomorrow, Friday, March 23. The president is selected by the Executive Directors (the member countries) and this vote will be held by April 20. Larry Summers is on the White House short list for this position and the other two people on the list, Susan Rice and John Kerry, are rumored to have no real interest in it.
But this year seems to be different than the others. There are rumblings from developing countries, a candidate that is campaigning for himself, and some other interesting developments. So it is well worth our while to do what we can to try to influence the president to stop listening to Tim Geithner and to find a better nominee than Larry Summers. Check out the action items at the end of the diary for that.
Now, back to Larry Summers. Do we have to convince anyone here that Larry Summers is a disastrous choice for this position or for any position for that matter? I don't think that anybody here needs much convincing. The thing that blows my mind is that I have not heard one administration official saying:
Are you freaking kidding me??
I can hardly think of a worse candidate for president of the World Bank. Summers has been a trainwreck as president of Harvard, as President Obama's economic advisor and director of the White House National Economic Council, as chief economist of the World Bank and though it was not as clear at the time, it is very clear now that he set a trainwreck in motion as secretary of the Treasury under President Clinton. Lastly, this job requires diplomatic skills and again, Summers has been a trainwreck in this arena.
In a year when the political ramifications of any decision are a top priority, it makes one wonder why President Obama himself did not say "Are you freaking kidding me?" when Summers name was brought up. And personally, after everything that has happened, I wouldn't take Tim Geithner's advice on how to reorganize my sock drawer.
Uncertainty About the Next Nominee
Sense Of Mystery Shrouds Hunt For World Bank Chief
"It is somewhat surprising that they haven't announced a candidate, it seems they are struggling to get quite the right person," said Uri Dadush, director of international economics at the Carnegie Endowment for International Peace.
White House spokesman Jay Carney said Wednesday he had no comment on the selection status. A Treasury Department spokesman also had no comment.
Uncertainty? Or just waiting until the last possible minute to make the announcement, coincidentally on a Friday news dump day? And seriously, are we really supposed to believe, given all the good and brilliant people out there who could do this job, that Larry Summers is the only one President Obama could come up with?
The turmoil and "uncertainty" is all the more reason to take action today to try to register objections to the appointment of Larry Summers. That would be huge negative both economically and politically for President Obama. There are several easy actions to take today, and if you are already convinced, you need read no further and you can skip right down to the last section of the diary titled: "Action".
The U.S. has always chosen the president of the World Bank. Look at this list of presidents since 1946. They are all Americans. This year there have been objections both to the idea of Larry Summers in that position and to the fact that the president is always American.
Jeffrey Sachs has a lot of support. But he does not have the support of the most important person he needs in order to be nominated: President Obama. Sachs boldly nominated himself. The White House ignored him and did not even put him on the short list of nominees. Sachs is supported by a number of countries in Asia, the Middle East, Latin America and Africa, places where there are a lot of developing countries. Sachs also has a significant amount of support from Congress.
Some developing countries are strongly objecting to the traditional choice of an American for a job that affects developing countries and whose work is done in developing countries. Ezra Klein's article from today says that the U.S. will ignore them.
A number of them are throwing their support behind Ngozi Okonjo-Iweala, a Nigerian economist and finance minister who was previously a managing director at the World Bank, and Jose Antonio Ocampo, a former Colombian finance minister U.N. under-secretary for economic and social affairs. And it’s not just the small, poor countries who want to see a non-American in the seat: Reuters reports that South Africa will back Okonjo-Iweala, while Brazil will push for Ocampo.
The United States will ignore them.
http://www.washingtonpost.com/...
"The impressive credentials of both Ocampo and Okonjo-Iweala puts tremendous pressure on the White House to come up with a candidate of at least equivalent standing," said Domenico Lombardi, a former World Bank board official now at the Brookings Institution in Washington.
"This signals a big shift and really reflects a game change," Lombardi added. "This is the first time in history we have a truly contested election."
http://www.reuters.com/...
Right or wrong (an argument for another day), assuming that an American will be chosen, a question remains about which American it will be.
Many sources seem to indicate that Summers has a lock on this. Some of those sources and others say that Kerry and Rice have no interest in the position and they were nominated simply to pad the list while the intent was always to nominate Summers. But Reuters reported this yesterday, so maybe Rice or another woman will be the nominee?
Sources with knowledge of the administration's thinking say Washington has focused on convincing a woman to enter the race, which could go some way to address calls by emerging market nations for change. A woman has never led the bank.
http://www.reuters.com/...
One of the biggest issues with Rice is the economic background merits. There are a number of good reasons to nominate a woman this year, and since Summers has a bad record with women,
not to nominate him.
Although Hillary Clinton was not on the White House "short list" her name continues to come up too. Felix Salmon lays out a scenario in which there might be a rebellion against Summers during the actual vote in April and that some may decide to vote for Jeffrey Sachs since he meets the American requirement but he is not Larry Summers. For this reason, he suggests putting Hillary Clinton into the job, even though she has said that she does not want it.
More realistically, Obama is going to have to come up with a real knock-out of a nominee, someone who would waltz into the job no matter who she was up against. Which is to say, Obama is going to have to nominate Hillary. Hillary has, we’re credibly told, ruled herself out for the job. Well, she might have to change her mind.
If Hillary is nominated, the job is hers: it’s as simple as that. And she would be very good at it, too. She wouldn’t even need to serve out a full term. While she had the job, she might even be able to engineer a way in which she could be succeeded by Ngozi, or some other highly-qualified candidate without a US passport. Which alone would make her one of the most important and revolutionary presidents in the Bank’s history.
http://blogs.reuters.com/...
Larry Summers History at the World Bank
Putting aside all of the other reasons why Larry Summers is a walking, talking, snoozing disaster, let's look at his record with the World Bank.
The (Larry) Summers of Our Discontent
Why the world should keep destructive men out of the World Bank
As chief economist at the World Bank, Summers authored (or at least put his name on) a 1991 internal memorandum that argued for the transfer of waste and dirty industries from industrialized to developing countries. "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?" wrote Summers. "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I've always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City." Summers later said the memo was meant to be ironic, or a thought experiment.
Poverty
The World Bank's official goal is the reduction of poverty. According to the World Bank's Articles of Agreement (As amended effective 16 February 1989) all of its decisions must be guided by a commitment to promote foreign investment, international trade and facilitate capital investment.
http://en.wikipedia.org/...
Illustration by Andrea Ventura, based on photograph by Charles Dharapak/AP Photo
World Bank: Drastic Reformer Needed to Right a Failing Agenda
The Bank, which this year will distribute somewhere around $26 billion in mostly-loan funding, has a huge footprint in international development. But the model of the bank, while it's arguably improved some in recent years, is still deeply flawed from the perspective of those of us who care about global health and pro-people policies. And that shouldn't come as a surprise for an institution that's been run for decades by American Wall Street types and politicians.
Whomever is going to run the World Bank next should pledge some dramatic changes -- changes that might actually bring the Bank in line with its proclaimed mission of ending global poverty. And they should be held to account in actually enacting the reforms, not just paying lip service.
Women
Shaunna Thomas is co-founder of UltraViolet, an advocacy group focusing on gender inequality, they have organized a petition to President Obama: "Please don't nominate Larry Summers to head the World Bank. Summers has a long history of making sexist comments and the World Bank has so much control over the lives of women and girls in developing countries. We need someone there who believes that women and girls have the same potential as men and boys."
President and founder of Gender Action, Elaine Zuckerman ( elainez at genderaction.org ) worked on development and gender issues at the World Bank and the Inter-American Development Bank for years. She said today: "It would be a travesty for Summers to become the head of the World Bank. He was essentially fired as president of Harvard for saying that women didn't have equal mental capacities as men. He argued that dumping toxic waste in Africa made sense.
http://www.infozine.com/...
Obama: Don't Nominate Summers to Lead the World Bank
But most significantly, from our perspective, Larry Summers has a record of intentionally and repeatedly disrespecting women. And that's bad news for the working poor, particularly women, in developing countries.
Summers has a long history of making sexist comments -- in fact, most recently, another potential candidate for the World Bank, Christina Romer, was revealed to be a victim of Summers' sexism. A recently leaked memo proves her recommendations to the president, as a senior member of the White House economic council, were deliberately left out of a final memo to the president. According to his own emails, he didn't take her recommendations seriously, so he didn't include them. She even said she felt like "a piece of meat" working with him.
[ ... ]
Women are the key to alleviating poverty and economic inequality. [ ... ] According to Oxfam, women suffer first and most from the effects of poverty and poor health. Women are also the leading edge of economic development. They are more likely to start small businesses and "of the 15 job categories expected to grow the most in the next decade, all but two are filled primarily by women." The developing world needs economic leaders who understand, appreciate and respect the role that women are playing to build these new economies.
The World Bank wields tremendous power over the lives of women and girls everywhere -- including helping to restructure entire countries, their education system, and working in places where women and girls are getting their first glimpse of equality. We need someone there who believes women and girls have the same potential as boys and men.
Why Summers?
Why?
Three reasons. He has powerful allies and patrons, and his views on the primacy of finance are congenial to theirs. Former Goldman and Citibank executive (with pit stops in between in D.C.) Robert Rubin, Summers’ partner in the financial deregulation project of the Clinton era, is the most influential of these. Summers has a capacity to persuade people of his sheer brilliance, which leads some people to excuse both his mistakes and his temperament. But most importantly, Barack Obama likes Summers, and Obama is loyal to a fault.
Summers wants this job. Barring last minute doubts on Obama’s part, he will get it.
http://prospect.org/...
Come Friday, is Larry Summers really going to be our World Bank guy?
Actually, in addition to the explanations Kuttner suggests for our Larry's indomitability, colleagues have been suggesting others, notably that he's a bully. A big, bad bully. And in the absence of strong, usually organized resistance, bullies tend to get their way. Especially when powerful people like what they have to say.
Failing Upward
The list of disasters and failures of Larry Summers seems endless. But he keeps coming back... and being promoted!
Zombie Larry Summers Could Reappear as Head of the World Bank
You just can’t get rid of zombie Larry Summers. He can get drummed out of Harvard. He can see the deregulation policies he pushed in the Clinton Administration lead to a financial meltdown. He can preside over a sluggish economy for two years during the Obama Administration, after which Congress flips to the opposition. And he just keeps falling upwards.
[ ... ]
There is literally nothing Larry Summers can do to get excommunicated from the ranks of the elite. That goes for most members of the ruling class, which, after all, rules.
Then there is this hot mess.
Why Larry Summers lost the presidency of Harvard
I was inspired to write this by being disgusted at continued rumors that he could get yet another prestigious job. It’s like this guy can’t fail spectacularly enough! Let’s give him another chance!
Let’s set the record straight: Summers was directly involved with defrauding the U.S. Government (see below) and Russia. He admitted to not understand conflict of interest issues (see below). It is particularly appalling, knowing these things, that he would be considered for the World Bank head, which presumably requires nuanced understanding of such issues.
Deregulation and derivatives and Brooksley Born. Hmm, women again.
As Deputy Secretary and then Secretary of the Clinton administration Treasury Department, Summers helped lead the deregulatory charge that enabled the financial crash of 2008 and the Great Recession. Among his notable achievements was stifling the efforts of Brooksley Born, then head of the Commodity Futures Trading Commission, to investigate and regulate the trade in financial derivatives. The trade in unregulated financial derivatives amplified the financial crisis far beyond the unavoidable troubles connected to the popping of the housing bubble.
"In recent decades, blind financial deregulation has contributed to a long series of financial crises with absolutely catastrophic results in developing countries. The World Bank does not need a financial deregulator as its leader," said Weissman.
http://www.marketwatch.com/...
The stimulus.
How Larry Summers' memo hobbled Obama's stimulus plan
Those still wondering why the Obama administration surrendered so quickly on the drive for stimulus and joined the deficit reduction crusade, got the smoking gun in an article by the New Yorker's Washington correspondent Ryan Lizza. Lizza revealed a 57-page memo drafted by Larry Summers, the head of the National Economic Council, in the December of 2008, the month before President Obama was inaugurated.
The memo was striking for two reasons. First, it again showed the economic projections that the administration was looking at when it drafted its stimulus package. These projections proved to be hugely overly optimistic.
[ ... ]
In short, while the data was crying out for more stimulus, the Obama administration openly embraced the need for deficit reduction, effectively slamming the door on the prospect of further stimulus. The basis for this original sin can be found in that December memo, which, unfortunately, provided the administration's game plan long after it should have been clear that it had been superseded by events.
Krugman:
Larry and the Invisibles
Instead, the memo argues that a bigger stimulus would be counterproductive in economic terms, because of the “market reaction”. That is, Summers et al were afraid of the invisible bond vigilantes.
And to the extent that there is a political judgment, it’s all in the opposite direction: if the stimulus is too big, we’ll have trouble scaling it back, but if it’s too small, we can always go back to Congress for more. That was deeply naive — and I said so in real time.
Action
There are a few things we can do in order to take action. First we can write and comment and spread the word today. President Obama is already aware that there is strong opposition to a Summers nomination, so more commenting, writing and spreading the word can only help. Second, we can contact the
White House to say no to this nomination and third, we can sign the petitions of
Public Citizen and
Ultraviolet.
Please try to do at least one of these things today. It won't take much of your time at all and it could make a difference. And this atrocious appointment should not be moving along with hardly a peep of objection from the populace.
1. Spread the word.
Spread the link to this diary via Facebook, Twitter, comments, etc. Write your own diaries and comments. Spread the word in any way that you can so that a burst of activity happens today.
2. Contact the White House.
Call, email, tweet, fax the White House and say no to Larry Summers for the World Bank.
Email the White House.
Call:
Comments: 202-456-1111
Switchboard: 202-456-1414
Twitter: @WhiteHouse
Facebook: White House
3. Sign petitions:
Two petitions.
Public Citizen petition:
Forget Larry for World Bank President
Larry Summers is the wrong person to lead the World Bank.
Summers has continuously advocated for deregulation and other policies that favor Wall Street and corporate interests. He should not be inflicted on the developing countries that the World Bank is supposed to serve.
Sign our petition urging President Obama to nominate someone better suited than Larry Summers to be World Bank president.
Ultraviolet Petition
Tell President Obama: No to Summers at the World Bank!
President Obama will nominate someone to head up the World Bank very soon. News reports say Larry Summers is leading his short-list. But Summers would be a terrible pick. Summers has a long history of making sexist comments--like saying girls don't have the genetic gifts to do well in math and science like boys do. And the World Bank has a lot of power over the education and training of women and girls in developing countries. We need a nominee who believes girls have the same potential as boys.
Can you sign the petition telling Obama not to nominate Summers? The media is just starting to cover this story and if enough of us speak out we can make it clear to them and President Obama that people everywhere think Summers is the wrong pick.
Our message to President Obama:
"Please don't nominate Larry Summers to head the World Bank. Summers has a long history of making sexist comments and the World Bank has so much control over the lives of women and girls in developing countries. We need someone there who believes that women and girls have the same potential as men and boys."
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