The latest epside of Conversations With Bill Kristol, featuring Larry Summers:
"In this conversation, Summers describes key moments from his time in government, including responses to the Mexican Peso Crisis of 1994 and the financial crisis of 2008. He also explains how he got involved in public policy and government, and offers some thoughts on tensions between the world of theoretical policy-making and the practice of politics. Finally, Summers discusses the differences between the two presidents he has served, Bill Clinton and Barack Obama," writes the Foundation for Constitutional Government, the sponsor of the series.
Herewith some thoughts about the outlook for this year. Thoughts, not forecasts, for which I have neither the skill nor the courage. I offer these thoughts in deference to the understandable demand for look-aheads. Human beings are always hunting for certainty, attempting to reduce randomness, surrendering to what Harvard’s Walter Friedman in his new book (Fortune Tellers: The Story of America’s First Economic Forecasters) calls “the near universal compulsion to avoid ambiguity and doubt.” But there is more to the demand for forecasts than this desire for certainty. Businessmen and policymakers want to use forecasts to change the future, to adapt products to predictions of changes in consumer taste, to structure finances so as to take advantage of predicted changes in interest rates and thereby change earnings in the coming year, to obtain “the ability to alter the very thing that one predicts,” to borrow from Friedman. In short, it is often the goal of the purchaser of a forecast to act so as to prove his seer wrong, and then hire him the following year to repeat the process.
It’s not that anyone here in Washington begrudges Britain, and to some extent Spain, their fledgling recoveries. But President Obama and other proponents of more government spending aren’t delighted that those nations’ austerity programs seem to be paying off in renewed growth rather than in the perpetual recession the Keynesian try-another-stimulus-crowd in the White House has been predicting. Conservatives are saying that the austerity sauce for the British roast beef would be just as tasty on the U.S. hot dog.
At first, it was fun—this parlor game of guessing who the Obama administration will appoint as the next chairman of the Federal Reserve. We all assumed it would be Janet Yellen, because she’s a woman. And then suddenly we had Larry Summers all over the leading financial newspapers receiving multiple endorsements from respected economists. There were sly references to his intellectual prowess and invaluable experience, not to mention (but they always did) his connections with Obama’s closest advisers on economic and financial matters.
Have you heard the news? Janet Yellen is positively clairvoyant!
Yellen, vice chairman of the Federal Reserve and, evidently, a front-runner to replace Ben Bernanke as chairman in several months, “was one of the first members of the Federal Open Market Committee . . . to realize that the [housing market’s troubles] could cause a major recession.” (Alan Blinder, Wall Street Journal, July 29.)
Larry Summers, President Obama's director of the National Economic Council, on Monday said it was "ridiculous" for Republicans to point out the 7.9 percent unemployment rate announced last Friday was higher than when the president assumed office.
Today’s nomination of Dartmouth president Jim Yong Kim to be president of the World Bank was a narrow escape. There was a chance that President Obama might select a really qualified person: Lawrence Summers, who was often viewed as the lead candidate. But he was obviously unfit: He is a former secretary of the Treasury Department and an award-winning economist. Thus he was of course disqualified.
Despite the repeated attempts to wish away the Solyndra scandal, it appears to be getting bigger. Today, the Los Angeles Times informs us key White House personnel raised concerns the Department of Energy loan program that gave Solyndra $535 million was poorly conceived and managed long before the solar panel manufacturer's bankruptcy:
Larry Summers, the just-departed White House economic adviser, says today’s credit crunch has a new culprit. “In the early days of the crisis, there was clearly a problem with lenders being unable to lend even to creditworthy borrowers,” he says in an interview in The International Economy magazine. But no more.
At Monday's town hall in Washington, President Obama was asked whether his top economic adviser, Larry Summers, and his Treasury secretary, Tim Geithner, would be staying through the end of this term. Obama's answer makes one think the answer is no:
In a press conference late last week, Speaker Nancy Pelosi addressed legislation before the House to extend unemployment benefits until November 30. Asked if the extension would serve as a "disincentive for people to look for work," Pelosi dismissed the argument as a “misrepresentation of the motivation for people to be on unemployment insurance” and an “insult to the working people of our country.”
Ever since I read George Plimpton’s Paper Lion in high school, I’ve been a huge fan of “stunt journalism.” This is the type of feisty reportage where a writer tries out for a professional football team, or takes a crack at conducting a symphony orchestra, and then writes a lighthearted article about his experiences.
On March 5, we might find that jobs were lost and the unemployment rate rose in February. But that will be because of the continued uncertain direction of economic policy—including the possibility of tax increases, high deficits, environmental regulation, and expensive healthcare reform—and not because of the weather.
Whatever the February report shows, though, there is also some good economic news.