Larry Summers made his swan song yesterday, and he didn’t give an inch. Speaking at the Economic Policy Institute, where he didn’t have a very favorable audience, Summers insisted that the actions of the Obama Administration were necessary and positive, and that the country was spared the worst expected effects of the Great Recession.
Summers shrugged off efforts by two reporters to get him to express regrets about his two-year tenure, during which big banks thrived, but ordinary Americans suffered [...]
Despite the preponderance of progressives in the audience, the passive conditional past subjunctive was about as close as Summers would come to saying he was sorry. “That’s where one would have liked to have seen more rapid progress,” he said.
But then came the “but”: “One does need to recognize that relative to what was really very widely feared, the outcome has been a good deal better,” he said.
Summers even took pride in his role in helping the country avert a depression, saying that people don’t always understand the benefit of the actions taken.
Two things. One, Summers did not bother, nor did anyone ask him, to note the irony in back-patting himself for a job well done and simultaneously warning that the country needed to cut taxes right now or a double-dip recession would surely follow. He argued this in his speech as well, adding that more infrastructure spending needed to top the agenda. I agree that the economy is in such a state. But the fact that the economy is so fragile that only $900 billion in spending – and more – two years later can save it is an admission of failure from Summers, and a very discordant note considering the core message that a crisis was averted, rather than needing to be averted.
Second, I want an apology from Summers, not just for failing to rev the economy, but really for this:
the President-Elect asked me to respond to a number of valuable recommendations made by members of the House and Senate as well as the Congressional Oversight Panel…
The Obama Administration will commit substantial resources of $50-100B to a sweeping effort to address the foreclosure crisis. We will implement smart, aggressive policies to reduce the number of preventable foreclosures by helping to reduce mortgage payments for economically stressed but responsible homeowners, while also reforming our bankruptcy laws and strengthening existing housing initiatives like Hope for Homeowners. Banks receiving support under the Emergency Economic Stabilization Act will be required to implement mortgage foreclosure mitigation programs.
That was Summers’ letter on January 15th, to members of the House and Senate, vowing to move forward on foreclosure mitigation and cram-down in exchange for the Congress releasing the second half of the TARP money. I’ve told this story before, but let’s be clear how much of a lie it was. Summers didn’t follow through on either promise. Cram-down failed in the Senate without the Administration so much as lifting a finger. And the vaunted $50-$100 billion dollars to be committed to stopping the foreclosure crisis got whittled down to, according to the latest figures, $4 billion. As a result, the foreclosure crisis remains a lead weight on the economy, and removing that lead weight was Summers’ primary job description.
Summers opened his speech at EPI by saying “It is by what happens to the middle class that our economic policies have to be judged.” By virtue of the desperation tax cuts as a Hail Mary to save the economy, and by virtue of the lie about stopping the foreclosure crisis, it’s fair to say he failed.
The best outcome of that speech would be if it were the last one Summers ever gave. Or at least, the last one any respectable human would bother listening to.