Summers Out as Treasury Pick?

by: Matt Stoller

Fri Nov 14, 2008 at 11:24


Victoria McGrane and Lisa Lerer from the Politico are reporting that Larry Summers is on the outs with the transition team.

The incident would likely make Summers' Senate confirmation a rocky proposition, especially since women's groups and liberal bloggers have already unleashed fierce opposition to him.

So far, our petition has around 6000 names on it, and several Facebook groups have emerged to protest his possible selection.  Women's groups have released a list of names for good candidates.

For Treasury secretary, Gandy said she suggested Federal Deposit Insurance Corp. Chairwoman Shelia Bair; Alice Rivlin, the first director of the Congressional Budget Office and expert on urban issues as well as fiscal, monetary and social policy; former Commodity Futures Trading Commission chairwoman Brooksley Born, who tried to regulate credit default swaps but was blocked by Summers, former Clinton Treasury Secretary Robert Rubin and former Fed Chairman Alan Greenspan.

I don't know Rivlin, but Bair and Born would seem like excellent choices.  Dean Baker likes Bair, who is a Republican and has done a good job at the Federal Deposit Insurance Corporation.  Brooksley Born is another one who fought aggressively in the 1990s to regulate the derivatives market, only to be undermined by the good old boys of Rubin, Summers, and Greenspan and their industry allies.  Any of these candidates would send a strong message that business as usual is over.

.... Adding that Summers has a background that is just ripe for embarrassing Obama during confirmation hearings, not just in terms of his role deregulating financial markets in the 1990s or associating with people like Ken Lay of Enron, and disparaging women.  Larry Summers before Republican Senators for a hearing would be like letting cats into a catnip factory.

Matt Stoller :: Summers Out as Treasury Pick?

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Summers Out as Treasury Pick? | 22 comments
I voted for change (4.00 / 3)
I want someone like Brooksley Born, Sheilia Bair, and Alice Rivlin who have tried to regulate and control banks to prevent meltdowns like we are currently experiencing, not Summers, Rubin, or Greenspan who are responsible for creating this mess. I voted for change, not more of the same. I hope Obama will actually give us change.
Well, the odds (4.00 / 1)
on favorite right now is Tim Geithner, who was Summers' protege, so right now I'm only clapping with one hand.
[ Parent ]
Born, Bair, and Rivlin sound great. (0.00 / 0)
Does anyone know if they're actually on a short list?

Is there any possibility that Dean Baker could get it? I know that seems farfetched, but does anyone think it's possible?

miasmo.com

[ Parent ]
I'm in the (0.00 / 0)
Paul Krugman camp.  He seems to have nailed the root of the crisis on the head, years ago.  What he is espousing in his columns are what the Obama Campaign has been saying in a more subtle tone.  

Obama is going to need a marquee name or demonstrative support in his choice.  This year's Nobel Prize in Economics is a good start.  

Krugman would be great... (4.00 / 2)
...if you want to see conservatives' heads explode. Hannity, Limbaugh, O'Reilly etc. would go on a nonstop anti-Krugman rampage. Confirmation hearings would be a giant Republican hissy fit. I have no problem with that, but I doubt Obama will want to stir up that level of shit storm.

miasmo.com
[ Parent ]
Krugman is (economically) middle of the road and cautious... (4.00 / 4)
like Obama. He is an obvious pick for the Obama administration. I think that the reason he is not being brought on board is that Summers wouldn't want him anywhere near, because Krugman would outshine him. Maybe if Summers goes completely, the Obama people will start thinking about recruiting Krugman for something.

Krugman is politically progressive, but he represents the center of the economics profession. There are economists to the left of Krugman, who did not join the tide of the profession to the right that occurred during the Reagan era. One of the most prominent examples is James Galbraith, whose recent The Predator State is a must-read.

Getting someone like Galbraith on board would represent real change. So far, Obama shows every sign that he is going to bring back Clintonism, which is nothing more than the Democratic form of Reaganism. What we need to do is go back to the politics and economics from before Reagan, not just from before Bush 2, which is what both Obama and Krugman have in mind.

[ Parent ]
Stephen Marglin for Treasury (0.00 / 0)
...you heard it here first.
[ Parent ]
That's not a constructive attitude (0.00 / 0)
There are progressive traditions in American economics that have been almost completely forgotten that have nothing to do with Marxism.

You are just echoing the right-wing meme that liberal/progressive = socialism.

[ Parent ]
Name a progressive economic tradition (0.00 / 0)
that isn't beholden to some notion of redistribution for the public good arising from socialist intellectual traditions.  You can't.  

Progressive thinkers from as early as the mid-19th c. like Henry George, Henry Demarest Lloyd, continuing on through John Commons, Selig Perlman, Schumpeter, etc., etc., drew heavily on European socialist ideas and intellectual networks.  Indeed, in a somewhat different vein, New Deal progressive intellectuals looked to Mussonlini's Italy as a model of efficient, effective public planning, while also drawing on intellectual traditions with profound ties to socialist thought.  It's not so easy to separate big ideas like this into neat little packages that can wholly escape what you suggest is the taint of "Marxism."    

The big money right wing power elite has successfully limited the parameters of acceptable political discussion - and by extension, the effective political agenda - since the end of WWII by using the right wing logic that you parrot (yet ironically accuse me of echoing):  socialism = evil, therefore anything that smacks of socialism is a nonstarter.  

We need a more intellectually honest public discussion of the ideological and institutional origins of so-called "progressive" (liberal is a far better word here) thought and policy.  That way, words like "socialist" can be used as critical tools rather than epithets, topics for debate and discussion rather than dismissal and demonization.      

[ Parent ]
You have my sincere apologies (0.00 / 0)
I misunderstood where you were coming from. But I think you owe me an apology for accusing me of "parroting" "right wing logic".

It's not so easy to separate big ideas like this into neat little packages that can wholly escape what you suggest is the taint of "Marxism."

As far as I see it, there are three main traditions of modern (i.e., post-Enlightenment) economic thought: Anglophone free market economics, Marxism, and historical school/institutionalist/evolutionary economics. It is true that the last was to a large extent a reaction to Marxism—in Germany, conservative reformers developed legislation protecting workers to prevent them from getting radicalized—but the two traditions are fundamentally different. The Marxist tradition is Utopian; according to it, there is an alternative to capitalism. According to the historical/institutionalist tradition on the other hand, modern societies will always have economies that are largely autonomous from the rest of society, although to function well, the economy needs to be pro-actively regulated and managed by the state.

By bringing up Marglin in response to my bringing up James Galbraith, you effectively conflated the two "alternative" economic traditions, and that's what I was objecting to. Bringing up Marxism when it is the reformist, intitutionalist tradition that has the solutions just serves to distract us and make us look at the past instead of the future.

[ Parent ]
Jesuitism was a response to the Enlightenment (0.00 / 0)
and used by the Catholic Church - much as you describe the historical school in relation to marxism - to give young boys a taste of the new thinking while maintaining church hegemony, a form of triangulation.  Thus while it's meaningful to speak of the Enlightenment and Jesuits as separate things, they're nevertheless connected in deep, fundamental ways.  After all, the libraries of the Jesuit elites had many of the most sought after banned books.  This is how I understand the relationship of the historical school to marxism, not as a separate entity, but as a movement that necessarily draws on the ideas of that which it seeks to replace.  

The differences we're talking about aren't so much about the nature of socialism or marxism as evil, rather the way in which ideas should be understood in relation to political policy and messaging.  You're what Isaiah Berlin calls a fox, while I'm a hedgehog in this case.  I think the hedgehog's interest in family resemblances is needed here, as the continuities between progressivism and socialist thought are indisputable, and are portrayed as such - albeit in the manner of a clumsy caricaturist - by the right.  

This is why I'll apologize for saying you parroted right wing logic - an accusation of intention - but maintain that the consequences of your criticism help right wing arguments gain in credibility.      

[ Parent ]
I'll concede the argument (4.00 / 1)
the consequences of your criticism help right wing arguments gain in credibility.

As I said, I misunderstood your initial post: I thought you were mocking me from my right. Also, I was responding emotionally for reasons that have nothing to do with current American politics: I come from a White (i.e., anti-Bolshevik) Russian background.

Your basic point is correct: to make blanket disparagements of Marxism is to play into the hands of the right.

Your analogy using the relationship of the Jesuits to the Enlightenment is suggestive. However, I think it is misleading, in that the Jesuits accepted the Enlightenment only incompletely and strategically, as you note. The historical school, I would argue, in contrast, moved Marx's critique of British economics forward, not background. If one looks at the three traditions I mentioned, in many respects, Marxism should be grouped together with free-market economics, not with the historical school. Marx shared anglophone economics' predilection for abstraction and for postulating "laws" analogous to the laws of nature. Also, Marxism is "one-sided" like free market economics: the latter holds that essentially everything can be left to "the market"; the former (in the form of "actually existing socialism") that it can be left to the state. (Unlike the historical school, Marxism did not produce a successful, workable alternative to unrestrained capitalism.) The historical school on the other hands understood that both the state and the economy must be given their due, and that each serves to counterbalance the other.

But I think we understand each other.

[ Parent ]
Excellent discussion (0.00 / 0)
of the similarities between Marx's thinking and the British economic thought that helped inspire it.  

Nice to have chatted w/you - if you live in NYC, drop me an e-mail & let's get coffee.  

[ Parent ]
Oh, and Galbraith would be a dream come true (4.00 / 2)
I was only being coy (but sincere as to my predilections).
[ Parent ]
Hope It's True (4.00 / 1)
Someone so smart doesn't make comments like he did about women without having some deep seated problem, best be gone.
Can you imagine someone with his issues (4.00 / 4)
having to watch as his dream job goes to a girl? Talk about poetic justice.

Maybe someone can explain to him that he just isn't cut out for that level of responsibility due to "inherent reasons."

Montani semper liberi

[ Parent ]
Rivlin is an old school uber competent (4.00 / 2)
kick ass and take names woman leader of the old school.  Like being the only women in a serious position of power on an entire floor or floors.  I hadn't even thought of her.

That would be a great pick.  Bair and Born would be excellent as well. Lots of strong, competent women leaders around.  We just never hear of them on a regular basis.

It's hard to be a media celebrity (4.00 / 1)
When you're too busy getting stuff done. Media hogs are rarely the best in their field. They just like the limelight. E.g. McCain vs. Reed on the military, Hatch vs. Feingold on judicial matters, Rove vs. Plouffe on running campaigns and winning majorities.

Yup.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

[ Parent ]
Bair++ (4.00 / 1)
Shela Bair has been saying a lot of the right things, seems competent, and politically I think appointing an unknown, apolitical sane Republican has a lot of merits. Drive that wedge between Moderates and Palin Acolytes further and in the coming decades years people will be wondering about how "Obama Republicans" will swing.

Me | My Work | Future Majority
I like Bair (0.00 / 0)
From what I can tell about her policy, plus what people like Dean Baker are saying about her, Bair seems like one of the few grownups involved in the current crisis, who has been pushing for real regulation.

Plus, if Obama can satisfy progressive economists and Beltway bipartisan fetishists with one move, I like the political upside.

It's not about the remark, per se (0.00 / 0)
but about what his having said it says about his character and judgement. It's the sort of thing that even if you believe it (which itself should be disqualifying since the evidence doesn't appear to support it--and crap put out by AEI or Manhattan or Hoover is not to be taken seriously), you just don't say in public, let alone in such a prominent forum. It reveals one to be an impulsive, egomaniacal, reckless loose cannon.

I.e. the last thing we need at Treasury right now.

From what I've heard them say, and heard about them, I like Bair and Rivlin. And it would be nice to have a woman who's not from the Wall St. Old Boys Club running treasury for a change. (I'm sure that Summers would appreciate that.)

I'm also kind of surprised that no one's mentioned Paul O'Neill. Not because he'd be likely to be offered or accept the job, or should be, but he was one of the few competent and honest Bush appointees--for which, of course, he was promptly fired.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton

Just Say No to Rivlin (0.00 / 0)
Bair would be great, but Alice Rivlin, who served in the first Clinton Administration, as deputy director and then director of OMB would be a bad choice. She's a deficit-reduction fanatic and recently joined hands with conservatives and various center-right types to call for a radical change in budget procedures related to Social Security and Medicare as way to balance the budget. The proposal-titled Taking Back our Fiscal Future-has been lambasted by more progressive budget experts because it wouldn't touch tax code preferences skewed toward the rich, and it fails to acknowledge that the long-term deficit problem is due to private-sector health care inflation that needs to be reined in as part of a universal health care plan.
Summers Out as Treasury Pick? | 22 comments





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