Check any political blog or website, and I guarantee you’ll find a slanted article on Larry Summers. President Obama is said to strongly consider Summers as the next head of the Fed, or the central banking system of the United States. This bank not only sets monetary policy in the United States, it acts as a “lender of last resort” to troubled depositories.
For those unfamiliar with Summers, he is the former Secretary of the Treasury, headed President Obama’s National Economic Council, was a chief economist at the World Bank, former Harvard University president, as well as other biography filling titles.
But the merit of Summers economic intelligence isn’t what’s up for debate. It’s his arrogance, ferocity in deregulating Wall Street, and desire, or lack thereof, to drive down this nation’s high unemployment rate.
There are probably a few more phrases and words that I can throw in the mix, but I think you understand where I’m headed.
Let’s start with unemployment in America and it’s correlation with the Fed. For black Americans, the jobless rate went as high as 20 percent, and higher in poorer cities, while the national rate quickly skated above nine percent during the height of the “Great Recession.”
The Fed’s responsibility in this debate is with how they enact financial policy. Instead of tying unemployment as a benchmark to when the Fed will begin to taper its current process of purchasing government mortgage backed securities worth upwards of $80 billion a month, they should shift their focus to the creation of full-time jobs according to one economist.
Once the Fed does this, then policy is sure to follow.
That belief is grounded in strict opinion and not fact, but given the lethargic nature of recent jobs reports, it’s at least worth a shot.
The potential of making that shift is, in essence, what bothers many about Larry Summers. If politicians are following the lead of the Fed when it comes to economics, then is Mr. Summers willing to take some of the weight off of his lean on corporate America?
In defense of Summers, President Obama protected him against attacks from the political left in a meeting with House Democrats. Obama spoke of Summers’ record, but only when many lawmakers tried to attack Mr. Summers.
But in the end, for folks who just want to see the struggle of the middle and working class come to an end, sitting a man like Larry Summers as head of the Fed is bad politics.
Summers may be the smartest economist on the planet, but due to the mistakes of his past, and his willingness to denigrate those around him who he feels may have inferior intellect or stature, should force President Obama to press pause on possibly nominating him.
Summers battle against Brooksley Born is evidence of his sickening arrogance and connection to Wall Street would only serve as a detriment to this nation’s economy.
But my opinion on whether Summers is good for the economy or not is an opinion, but its based in fact. Job growth is stagnant, wages are down, full-time job creation isn’t real, and the declining unemployment rate is due in part to people tiring of looking for jobs.
If President Obama chooses Summers for the Fed, it’s further proof that the residing middle and working class are ghosts in the darkness.
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- Dean Baker: The Economy Is Awful and Larry Summers Should Not Be Fed Chair (huffingtonpost.com)
- The Next Fed Chair? Not Larry Summers. (mhasegawa.com)
- Summers: The Courage to Say Yes to Wall Street? (crooksandliars.com)
- What Does Obama See in Larry Summers? (washingtonmonthly.com)
- Obama gives Larry Summers ‘full-throated’ defense as dissenters push Janet Yellen for Fed chief (dailykos.com)