I'm hearing from all quarters that the Summers appointment is dead, but just in case it's not, it's worth pointing out that Summers assured California Governor Gray Davis that Enron was not manipulating the energy markets in 2001 and that reregulation or capping prices would distort the market. He told Davis that Lay was doing "a pretty good job" serving California and that Gray should raise consumer prices and relax environmental controls so more power plants could be built.
Of course, now we know that Enron was manipulating energy prices and withholding electricity from California, and the crisis eventually led to Gray's recall. Whether Summers was sincere with his little mash note to Ken Lay is kind of an interesting question, but a bit besides the point.
As part of her campaign to stop the bailout profiteers, Naomi Klein has put our petition on her home page, joining 2800 of you who have signed up to protest Larry Summers as Treasury Secretary. It came out today that Larry Summers warmly embraced deregulation as Treasury Secretary, as Dean Baker notes. Summers fought aggressively against pro-regulatory elements within the Clinton administration to do the industry's bidding, so it's no surprise he's now a managing director at hedge fund and private equity group DE Shaw.
Kim Gandy of NOW has issued a critical statement bringing up a point I hadn't before considered.
Mr. Kenneth L. Lay
Chairman and Chief Executive Officer
Enron
PO Box 1188
Houston, Texas 77251
Dear Ken:
Thanks very much for you kind letter of congratulations. I am grateful for your best wishes and deeply honored by the President's choice. As I said in the Rose Garden, Secretary Rubin's act is a tough one to follow and there are certainly plenty of challenges ahead. I am looking forward to the opportunity and to continuing on the course that has been set.
I hope our paths will cross again soon.
Sincerely,
Lawrence H. Summers
[Hand-written scrawl] PS - I'll keep my eye on power deregulation and energy market infrastructure issues.
Right now, the rumors are that Larry Summers is the choice for the Treasury Secretary post. As Dean Baker suggests, this would not be a good thing.
It would be a really bad start to his administration if President Obama picked a Treasury Secretary who shares a substantial part of the blame for the bubble economy and the financial crisis. It will not be easy to pick up the pieces and get the economy back on its feet, but we would be going in the wrong direction to put one of the people responsible for getting us in this mess in the top economic position in the Obama administration.
Summers was one of the key proponents of the banking deregulation of 1999 that led to the current financial crisis. In addition, Larry Summers has argued that women are innately less gifted in science than men, that 'Africa is Underpolluted', that child sweatshop work in Asia is sometimes justified, and that job destroying trade agreements are good for America.
People get stuff wrong all the time. That's not bad. But if you got the big stuff wrong, repeatedly, while being warned against it, you shouldn't be rewarded with a promotion.
I set up a petition here, and I'll be sending the comments onward to John Podesta and Michael Strautmanis of the Obama transition team.
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