White House Not Listening To World's Most Perpetually Wrong Economist
Yesterday, a tweet from Politico just about sent more than a few people (including me) through the damn roof. A tweet stating that "Everyone in the West Wing is reading a Lawrence Summers op-ed being circulated among liberal policy wonks." Liberal policy wonks who, apparently, were neither liberal nor policy wonks and who were not particularly fond of "liberal policy," and had been "whispering" for weeks that Biden's stimulus bill is just too big.
Everyone in the West Wing is reading a Larry Summers op-ed being circulated among liberal policy wonks. Why? Summer… https://t.co/vuUFk8OCew— POLITICO (@POLITICO)1612528887.0
The Summers op-ed in question was published earlier this week in the Washington Post. The gist of it was essentially "All of the other economists are wrong! People don't actually need that much money to get through this pandemic, so let's get chintzy with the stimulus checks!"
Of course, as Paul Krugman — an economist who is far more frequently right about things than Larry Summers is — pointed out, it really isn't so much a "stimulus" as it is disaster relief. You know, because there was a disaster. There was/is a pandemic.
The jobs report and the Biden plan: the plan is mainly NOT ABOUT STIMULUS: It's disaster relief to get us through t… https://t.co/caGo79e5dr— Paul Krugman (@Paul Krugman)1612535257.0
Traditionally, disasters cost money. They cost money for individuals, they cost money for families, for businesses and for countries. In fact, they cost so much money that people buy insurance of varying kinds to offset the cost of said disasters so that they are not completely ruined when said disasters occur. And even that doesn't always work out so well, because insurance companies really prefer to not cover things. But people don't pay for the cost of disasters in their own lives as some kind of luxury, they do it because the alternative is worse. Those who are unable to pay to rectify the disasters in their lives are obviously more screwed than those who can. Duh. But long story short — we need to make sure people are okay now because the alternative is worse.
But I digress! Many of us were very unhappy about the idea of the West Wing listening to Larry freaking Summers about anything, given his history of being extremely wrong and weirdly extremely bad judgment in practically every possible scenario he has been involved in. Repealing Glass-Steagall! Enron! Jeffrey Epstein! A uterus makes you bad at math science! A wealth tax will just make rich people more anti-Semitic!
Forcing the wealthy to spend could boomerang. If the wealth tax had been in place a century ago, we would have had… https://t.co/O6mUGyLaKY— Lawrence H. Summers (@Lawrence H. Summers)1572095292.0
Also, fucking up everyone's mortgages and generally trashing the world economy — not to mention screwing up the recovery from the Great Recession by encouraging the Obama Administration to not give people as much money as they needed, thereby screwing us all economically for years.
I could go on, but honestly we would be here all day. He's just been so incredibly wrong about so many things. Which, duh, is why people were a bit concerned by that Politico tweet.
The idea of a West Wing filled with people who are obviously not "liberal policy wonks" (unless absolutely none of those words holds any meaning at all) chittering about how much they agree with Lawrence Summers that the American people don't really need all that aid — just like he felt the government of California didn't really need to regulate Enron — is not particularly appealing. Because they do need that aid. That aid is incredibly popular and if people don't get it they're going to be super pissed.
But there is good news! It seems that Politico, actually, was wrong (shocking, I know), and Mother Jones has the hot goss. Apparently, the Larry Summers op-ed was going around, but not because "liberal policy wonks" were all "Oh yeah, that stimulus bill is too big! America don't need that money!" — but rather because they were talking about how bad it was.
Summers' treatise spread from wonk to wonk in the White House with the contagion of a venereal disease—and was about as well-received. One aide characterized the response as "widespread disagreement." White House economists had already been booked for media hits to discuss the January jobs report, airtime that permitted many administration voices to rebuke Summers in unison. "The president and the administration have a lot of respect for Professor Summers, but we disagree here," Bharat Ramamurti, a deputy NEC director, told CBS Radio. Jared Bernstein, a progressive labor economist and member of Biden's Council of Economic Advisors who served alongside Summers in the Obama administration, was less polite. "I think he's wrong," Bernstein told CNN on Friday morning. "I think he's wrong in a pretty profound way." [...]
"One of the lessons from the Great Recession is that you need to not only be big and bold upfront, but you have to take out some insurance against the possibility that other things can go wrong," says Gene Sperling, who replaced Summers as Obama's NEC chair in 2011 and has been an informal advisor to Biden. He names the worse-than-expected jobs report and unknown emerging COVID variants as factors that require extra padding. "If you were to ask me how to weigh the risks between a potential surge of inflation versus the potential risk of our labor market getting stuck in the mud, it's not really a close call." (Sperling called Summers' op-ed both "misguided" and "inconsistent" with Summers' own recent writings that have urged policymakers to ignore the conventional deficit concerns in the midst of economic collapse.)
He is. He is profoundly wrong. As usual. But thank goodness no one is listening to him this time. We have enough to worry about right now with Republicans being terrible and with the Joe Manchin contingent not being much better. I'm gonna have to spend the next week screaming "Means testing is not about making sure rich people don't unnecessarily benefit from social programs it is about making sure rich people don't worry about their taxes going up, while making it more difficult for those who do need those benefits to access them!" and "How are you gonna base anything on tax returns from 2019? There was not a pandemic in 2019!" into the ether as it is. The last thing anyone needs is people going around positing that perhaps, just perhaps, Larry Summers is right this time (Larry Summers is not right this time).
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Robyn Pennacchia is a brilliant, fabulously talented and visually stunning angel of a human being, who shrugged off what she is pretty sure would have been a Tony Award-winning career in musical theater in order to write about stuff on the internet. Follow her on Twitter at @RobynElyse