Reflecting on outgoing National Economic Council chairman Larry Summers’s farewell speech, John Cassidy of the New Yorker presents the left-wing view of what in Summers’s track record we should be thankful for:
Summers, for all his blemishes, has never pretended to be a politician or a political tactician. His job was to give the President economic advice and present the options available to him. This he did for two years. He made some mistakes and he failed to articulate an overarching narrative for Obamanomics, but on the defining question of the age-how to react to the financial crisis of 2008-Summers got things largely right. For this, at least, we owe him some gratitude.
Felix Salmon disagrees, suggesting that Summers’s recommendations to President Obama regarding the financial crisis — on TARP and the stimulus, especially — were such obvious prescriptions that Summers can’t be given credit:
Obama always knew, pretty specifically, what policies were needed to respond to the crisis – and in many cases those policies had already been enacted by the Bush administration. Summers was chosen because he believed in those policies; it’s simply not the case that the policies were enacted because Summers was chosen.
Which brings Cassidy’s list of “things for which we owe Summers some gratitude” down to absolutely nothing.
There could be a debate about whether some of the administration’s crisis response measures would have been significantly different without Summers in the NEC. For instance, the established narrative is that Summers prevented Christina Romer from advocating a much larger stimulus bill than the one that was passed. Salmon is certainly right, though, in the sense that ultimately Summers influenced only the degree, not the kind, of measures implemented. Cassidy’s assertion, however, that Summers — and, by extension, the mainstream of economic opinion — “got things largely right” is much less certain. It’s also illustrative of why the White House, as opposed to the public, owes Summers its gratitude.
Whether his ideas are good or not, Summers is without a doubt a respected figure in mainstream academia. He is one of the most-cited academic economists in the world, the nephew of two Nobel prize winners in economics, winner of the prestigious John Bates Clark medal, and the former president of Harvard University, as well as the former secretary of the Treasury. With that track record, he could never be accused of being incompetent or out of touch with the mainstream. Mistaken or compromised possibly, but never inadequate to the job.
Obama could not count on such a figure to give him the best advice or to navigate the political scene with ease. But he could feel safe knowing that having an economist and official of such enormous stature and influence would eliminate the risk that the administration would ever appear incompetent or outmatched. Simply having Summers aboard was guaranteed to deflect all but left-wing and right-wing criticisms, because any mistakes that could be blamed on Summers could also be blamed on the vast swathes of academia and business that looked up to him. In other words, in bringing Summers into the administration, Obama knew that his reputation would be protected, even if the economy wasn’t.