Posts Tagged ‘Larry Summers’

Wherein I Concede McMegan is Right

Tuesday, April 7th, 2009

by Brien Jackson

As a rule, I try to avoid agreeing with Megan McArdle but, broken clocks and such, I must concede that she is right in this post critiquing Glenn Greenwald, particularly this graf:

Glenn Greenwald once lashed out at me for asking an “ignorant” question on a topic I admitted I didn’t understand.  A petty person would point out that his post on Larry Summers displays not only ignorance, but a total lack of awareness of any gaps in his understanding.  (emphasis mine).

Putting aside the discussion of whether or not it’s true that the only people who really understand finance market issues are people whoare seemingly too close to the industry as to be unbiased (I think they are, but that’s not really material), I think this is a rather succinct, deadly accurate critique of Greenwald’s style, which is basically to assert a series of premises upon which to build an argument, and then to plow forward at breakneck pace to obscure any sort of quibbling with the underlying premises. It’s great rabble-rousing if you agree with Greenwald, and I’m sure you’re glad to see someone making your point so forcefully, but it’s not so good if you disagree with him. Worse still, it’s really not good if you agree with Greenwald on the fundamentals, but feel like he’s missing a point or going a bridge too far, especially if that’s built around a misconception of what he simply treats as a given (doubly so because he’ll turn his fire-breathing on you if you deign to point it out). As such, I feel like “Glennzilla” tends to be ignored more than he should be by all but a legion of netrooters who rarely disagree with anything he says. Not that that’s a bad bit of positioning, mind you, just ask Limbaugh.

On the substance of Summers, I think McMegan is simply more right than Glenn. Summers was basically an academic and policy maker for his entire career, prior to a scandalous departure from Harvard that seemed to have doomed his career in public life, at which point he entered the private finance world to make a lot of money. Whatever you feel about Summers policy positions, to use this as evidence that he’s unethically close to Wall Street interests doesn’t seem to me, in relative terms, to be quite accurate. This, in fact, is one problem I have with jumping onto the anti-Geithner bandwagon when it’s heavily couched in criticism of his “Wall Street ties,” even though Geithner has never worked in private finance, and has been a technocrat for his entire career. The closest he’s come to working on Wall Street was a stint running the New York Federal Reserve Bank. It’s perfectly fine to make the argument that moneyed interests are invariably linked to government and that Geithner and Summers are more caught up in that than most, but somehow I get the feeling that’s not the argument being made or, if it is, that the people making it are ok if the audience comes awa with a misconception, so long as they come away agreeing that Geithner and Summers are Very Very Bad.

McMegan is also obviously right to note that the idea that Summers would have seemed like a likely choice to be put into a high position in an Obama administration in April of 2008 is just laughable. Simply put, Summers was still a pariah at that point, and remained one until he enjoyed a rapid comeback after the collapse of Lehman Brothers. Moreover, with the economic problems not seeming quite so tragically stark, I’m not sure a need for “star power” in these positions would have been felt, and I think it’s likely that either Jason Furman or Austan Goolsbee would have Summers’s position. But the rapid economic downturn necessitated a top line of economic officials with a higher profile. And, of course, the idea of high profile public figures and/or former government officials bringing in 6 figure payouts for speeches is hardly unusual, nor something that is widely seen as improper. It’s ok if Greenwald thinks it is, in fact, improper, but even then he shouldn’t be trying to give the impression that the practice isn’t common and, largely, seen as being an ok thing to do in a number of policy fields. To do so is simply rank intellectual dishonesty.

Really Smart People Doing Things I Don’t Understand

Tuesday, March 24th, 2009

by Brien Jackson

I’m glad someone other than me went there first:

I’m biased in this regard, obviously, because I think the costs of nationalization likely outweigh the benefits, and that in any case it would be very difficult for Obama to get Congress to authorize the trillion dollars or more the government would need to take over America’s biggest banks. And I agree with Thoma that the Geithner plan could work. But what I like best about his conclusion is something else: his implicit recognition that the people who came up with this plan — Geithner, Larry Summers, and Ben Bernanke — are well-versed in the problems of the banking system and serious about trying to solve them, rather than being either oblivious or corrupt. Much of the discourse around the Geithner plan, and around the nationalization debate more generally, seems to assume that Obama’s economic policymakers don’t understand the gravity of the situation or the virtues of nationalization, or else it assumes that they don’t really care about improving the real economy. I’d be very surprised if either of those things was true.

I don’t agree with the first sentence, but the rest of it seems on. It’s easy enough for us (yes, I’m including myself) that writing on the internet doesn’t actually make you an expert about everything, and agreeing with me doesn’t make you the smartest person in the world. Similarly, disagreeing with me doesn’t, necessarily, mean you must either be completely corrupt or the dumbest person in the world, although that’s certainly a possibility. It’s certainly fair to point out that Paul Krugman is a Nobel prize winning economist, but you know who else is a very accomplished economist? Tim Geithner! And Ben Bernanke! And even Larry Summers! And each of them has more experience with financial issues than Krugman, whose Nobel was won for his work on trade issues (and I don’t think David Sirota would approve of those ideas, for the record). Which isn’t to say that Krugman is wrong, or that I think he’s unqualified to give an opinion on the plans, rather it’s simply to point out that he’s not the only really smart person in the room, and there are plenty of really smart people who don’t share his opinions. These guys aren’t quarterhorse afficianados.

Also, making sure the executives get hit hard is not a recovery plan in its own right, and recognizing that does not make you a Wall Street stooge.

Larry Summers

Monday, November 10th, 2008

Brad DeLong comes out defending Larry Summers this morning. Shorter DeLong; Summers is the smartest guy in the room and a very competent manager who would be the best qualified to run Treasury.

Conversely, Veronica Arreola isn’t so enthused:

After his infamous statement in 2005 that women and girls had an intrinsic handicap towards math, explaining my job was a moot point. Everyone in my circle of friends and around the country knew the importance of running an academic support program for women majoring in science and engineering at a Research I institution. Despite the fact that women are going to college in record numbers and increasingly majoring in sciences, there are still those out in the world who think women just can’t hack it in the end. It also was an easier sell to donors and funders about the importance of the WISE office and our mission. So thank you, Larry for making my case so eloquently.

After his departure from the Harvard presidency he faded from the limelight. This week his name, along with New York Federal Reserve Chairman Timothy Geithner, has been bandied about as secretary of the treasury in the incoming Obama administration (can I just say how amazing it is to say that? The Obama administration!). Could the man who sold America on change seriously be considering appointing a man who suggested that Malia, Sasha and all of our daughters have a genetic disposition from not being able to math? Sadly yes.

As the head of the U.S. Treasury, Larry Summers would be in charge of advising on economic and tax policy in this country and abroad. This is a man who believes that women’s inability to do math has MORE impact on the lack of women in science and engineering than discrimination. The lack of women in science and engineering is important to our economy in at least two ways. First, our country is sorely in need of scientists and engineers. The fact that women represent just 12 percent of the science and engineering workforce (cited from Obama’s Change.gov website) means that we are underutilizing women’s skills in this area—a fact that Summers just might take issue with because you know, we can’t do math.

This doesn’t strike meas a particularly compelling argument. For one thing, Summers’ infamous controversy really has nothing to do with running Treasury in general,and even less to do with what will be the Department’s biggest responsibility in the near future, managing the bailout. But even beyond that, the construction of Arreola’s post is incredibly flippant and borderline dishonest. For one thing, Summers never definitively declared that women “couldn’t do math,” or science, or anything else for that matter. Rather, he was looking at the question of why women are underrepresented in tha hard sciences, and attempting to provoke a discussion with a rough, somewhat outlandish hypothesis. Anyone who’s taken an economics course would be familiar with the tactic, and Summers is an economist at the end of the day. But it was an academic question, posed in an academic environment, with the goal of ultimately increasing the representation of women in the hard sciences, and it always struck me that the controversy ultimately boiled down to wholly unconnected problems the faculty had with Summers, and merely provided an impetus by which to remove him.

Regardless, it seems to me that the best way to gauge how Summers would fare as Treasury Secretary is to look at his body of work in the time he’s already spent doing the job, and reading his writing on the issues facing us now. And on that front, I think it’s somewhat hard to really build a hard case against him.