Tom Scocca had the best reaction to the Larry Summers resignation that I’ve seen, with the best headline: “Larry Summers Is Resigning to Spend More Time With His Money.” He’s leaving the Administration with accomplishments like low-balling the stimulus and protecting the banks, to go back to Harvard, where he gambled with the college’s endowment and lost. Summers got religion and started arguing for more stimulus after blowing the first one, but he put the Administration in the position to make such policies politically impossible. From failure to failure, ever upward.
Thoughts now turn to what happens next, and Zach Carter has the right idea, though I’m not sure NEC is as important as he makes it out to be:
Larry Summers is out, and President Barack Obama now faces a critical decision. He can focus on policy, naming a replacement who wants to ease the economic strains on American households, or he can focus on politics, naming a candidate who appeases the corporate executive class and their backers in the Republican Party. The choice should be obvious. On the economy, good policy is also good politics [...]
So who should Obama name to take Summers’ place? Joseph Stiglitz. His intellectual qualifications cannot be impugned — he is a Nobel Prize-winner whose academic work is revered on both the left and right. But his policy acumen is equally proven — he has been chief economist for the World Bank, and Chairman of President Bill Clinton’s Council of Economic Advisers.
And his policy record during the Clinton years is absolutely superlative. Stiglitz aggressively fought Treasury Secretary Robert Rubin’s efforts to deregulate Wall Street — efforts that paved the way for the Great Financial Crash of 2008. Stiglitz also fought Rubin by pushing for job-creation rather than deficit reduction. Rubin appeared to win that battle for a while, but once it became clear that the job growth that took place under Rubin’s deficit attack was purely the result of an unsustainable bubble, Stiglitz emerged as the victor.
I’d also put in a word for the Roosevelt Institute’s Rob Johnson, but Stiglitz works too. However, basically Summers has already been replaced by Tim Geithner. Summers turned the management position of the NEC into an advisory one, and the replacement will have to get in line behind Geithner if they want to do any advising.
Now, the larger point is that there’s an opportunity for some real changes to the inner circle in the next few months. The President doesn’t really have a team of rivals, but an insular set of voices saying mostly the same things on policy and politics. Summers is gone; Rahm Emanuel’s about to run for mayor of Chicago; David Axelrod and Jim Messina and some of the political folks are going to take off to run the re-election campaign. There’s going to be a power vacuum and an opportunity to have a new perspective.
I’m not certain the President will take it, but the goal should be to make it painful for him to go with the same old crew. Bernie Sanders objecting to Jack Lew’s appointment as director of the Office of Management and Budget, because of his ties to the “failed policies of the past” is a good start.
Progressives have already expanded the playing field on this front. Elizabeth Warren is an assistant to the President and has already begun with a flourish. I don’t think she’s in line to be the next Chief of Staff (though I hope the suggestions of Ed Rendell or Tim Kaine are just imagined voices in Matt Bai’s head). But Warren and alternative voices like hers need more of a say in the White House, to save this Presidency.
UPDATE: Just as an FYI, Sanders was the only Senator to vote against Lew’s nomination to OMB. He passed 22-1. Registering the objection is good, but that’s where we are.