Obama’s BFF Larry Summers is Also Wall Street’s
I read this past week that a poll revealed that 4 out of 5 Americans are economically insecure.
I also read that Obama is seriously thinking of bringing back one of the US-economy wrecking balls, Larry Summers, to replace Ben Bernanke as Fed chairman in January.
Of course Obama is.
William Greider in "No More Second Chances for Larry Summers" confessed that when he heard rumors of Obama’s intention to nominate Summers he dismissed it all as a sick joke. He writes:
... Summers worked on Wall Street after he got bounced as Harvard president and before he joined the Obama administration in 2009. During the year before, he earned $5.2 million at a leading hedge fund, D.E. Shaw.
Then he made another $2.8 million for speeches, more than forty of them, mostly delivered to audiences at mega-banks and leading financial firms. These included JP Morgan Chase, Citigroup, Merrill Lynch and others. Goldman Sachs paid him $135,000 for one speech. When Summers learned Merrill Lynch was receiving federal bailout money, he gracefully contributed his $45,000 speaking fee to charity. The point is, this watchdog will know some of the swindlers personally.
... the self-serving lies he told to cover up his own role in destabilizing the financial system when he was Treasury secretary in the Clinton administration—when he personally blocked tougher regulation on the financial time bombs known as derivatives, when he collaborated with Republicans and the Federal Reserve in dismantling Glass-Steagall and other New Deal protections. Larry and Bill, Robert Rubin and Alan Greenspan paved the road to financial collapse. Afterwards, nobody went to jail.
These scandalous matters are relevant once again because the White House propagandists are pushing hard to make Larry Summers the next Federal Reserve chairman. If Obama makes that choice, Wall Street wins again. Summers is their candidate and at home in their money culture. As Fed chair, he would become their main watchdog.
So once again there is understandable and commendable blowback that a real-politik profoundly pro-Wall Street Obama is ignoring the will of discerning progressives on this issue and promoting one of Wall Street’s super favorites.
Obama effectively deals with blowback by ramping up the punishment for those who dare and/or manage to even temporarily frustrate and challenge his will (if they actually can get that far with the ever-irrational trust of Team Dem and an amoral, corporate-owned media). If his man Summers can’t be appointed, Obama will give us an even WORSE choice, maybe not recognizably so immediately but inevitably. He will undoubtedly BLOW OFF TOTALLY the number one choice of the people. He seems constitutionally (pun intended) incapable of acceding to the overwhelming wishes of the citizenry, who are, by the way, becoming more and more economically desperate under his regime.
Richard Eskow in "A Larry Summers Bait-and-Switch?" writes:
The President wants Summers, come hell or high water. In which case, that’s exactly how he’ll get him.
They have a Plan B. They’ve got somebody lined up – somebody other than Yellen, that is – if they can’t push Summers through the nomination process (a procedure which is increasingly starting to resemble the process by which a python digests a pig).
Bait, meet switch.
That last possibility is the one we should really be worried about. The last time Summers was up for a White House job, we got Geithner instead. He was worse than Summers would have been, at least on policy. But the White House was able to tell several key constituencies “We heard you,” while actually selecting an even more pro-Wall Street candidate.
Eskow even floats the horror of Obama bringing Geitner himself back again if Summers can’t pass.
I don’t know how Obama watchers, some, can still be chewing on their fists hoping Obama will do the right thing by us. For one thing, my fist turned into a bloody stump early on in Obama’s first term. For another thing, how can people still be living on Obama hopium? Even if Obama does offer those few crumbs of rhetorical empathy every now and then when awareness of his mendacity threatens to burst the incredible "personality over principle" bubble his apologists exist in (I mean, Obama will only refer once in a while to the existence of a struggling “middle class” -- never ever does he acknowledge the desperate citizens of “less than middle class” status, the ranks of which are steadily increasing) when have his policies ever substantially helped ordinary Americans?
So let’s look even more closely at Larry Summers, whom Obama loves and wants so much as Fed chairman.
Richard Eskow again:
Beside the Obama administration and Wall Street heavyweights, it's hard to find anybody who likes Larry Summers.
It certainly tells us that the president is very forgiving of Summers’ flaws, which include his apparently shocking attitudes toward women, his spectacular failure to foresee the financial crisis, his pivotal role in deregulation, the many millions he’s made from the same Wall Street bankers he’d have to regulate, and his long record as a bully to subordinates, peers and colleagues.
Economically, that last defect may be the most frightening portent of all. Summers is known for hectoring and shouting down anyone who disagrees with him, and if there’s one thing the economy needs right now it’s new and dissenting voices proposing smarter and bolder policy alternatives. Encouraging those voices is precisely what Summers doesn’t do, and that’s a grave warning sign for presidential policy.
Women voters are critical to the party’s prospects. Dave Johnson has rounded up some of the worst evidence of Summers’ seeming misogyny, and it’s not pretty. What’s more, the President would be choosing – and his party would be confirming – a man with a bad reputation for sexism, and they’d be bypassing a highly qualified female candidate to do it.
Janet Yellen would be breaking a glass ceiling as the first female Fed chair. A Summers nomination would feel like ground glass.
Everybody hates Larry. Women aren’t alone in their dislike of Summers. Conservatives hate him because he’s a Democrat. Clean-government advocates hate him because he deregulated Wall Street, took millions from it, then went back into government. Progressives hate him because he killed much-needed regulation and represented big banks’ interests while he was in government. Biologists hate him because he distorts their findings to support his misogyny. Many human beings reportedly hate him just for being himself.
He lacks credibility. Fairly or not, Summers is inextricably associated in the public mind with the evils that crashed the economy: deregulation, the revolving door, and corporate-Democratic indifference toward the poor and the dying middle class. (Republicans, by contrast, are openly hostile.)
Most of all, a Summers nomination would reinforce the public perception that this administration is too cozy with Wall Street.
William Greider in "Stop Larry Summers Before He Messes Up Again" echoes the arguments and concerns of Eskow:
... Summers is a toxic retread from the old boys’ network and a nettlesome egotist who offended just about everyone during his previous tours in government. More to the point, Summers was a central player in the grave governing errors that led to the financial collapse and a ruined economy.
... Obama’s senior economic advisers—still dominated by Clintonistas and aging acolytes of Robert Rubin—are pushing the president to choose Summers as the successor to Ben Bernanke, whose term ends in January. And they are urging Obama to make the announcement right now, before the opposition can get organized.
The former Harvard president was himself a Wall Street player between his government positions. He was a soft-on-banks adviser to Obama during the president’s first term. Choosing Summers now would be another great gift to the mega-banks. But it would be a very tough vote for Democrats who claim the mantle of reform.
There are many reasons to oppose Summers as Fed chair, but the strongest objection is that Obama would be rewarding the same guys who got things disastrously wrong for the country—the Clinton-Rubin policy makers who danced to Wall Street’s tune of financial deregulation and collaborated with the Greenspan Fed and Wall Street to gut prudential regulation like the Glass-Steagall Act. Those actions set the stage for the crisis that devastated middle-class home owners and working people generally.
Summers was an over-confident cheerleader posing as superior intellect. People called him “the smartest man in the room,” and Summers definitely believed it. As Treasury secretary during Bill Clinton’s second term, Summers personally did the knife work that cut up Brooksley Born, the brave regulator earnestly trying to impose meaningful limits on the explosive derivatives market. He still owes Born—and the country—an apology.
Summers got bounced as president of Harvard for his derogatory remarks about women as scientists. He dissed black professors as inadequate scholars. Personality defects aside, the Democratic party has a huge stake in this decision—whether the money-friendly “New Democrats” who have controlled the party since Bill Clinton will continue to dominate the party’s agenda and smother any attempts to embrace true reform.
The question is not about left or right policy decisions [re Summers]. The question is incompetence.
... The stolid masculinity of this cloistered institution [the Fed] has failed the country spectacularly and needs to be pried open for public policy debates. The most chilling failure was that its conservative leaders—Alan Greenspan and Ben Bernanke—did not see the crisis that was coming (evidently neither did Yellen).
That institution’s reputation has been gravely diminished by the bank bailouts and other adverse events. The public was shocked and remains deeply skeptical. People don’t trust the Federal Reserve, and for good reason. What people could see with their own eyes was that the Fed expended trillions to rescue the mega-banks from the troubled waters while people were left to drown. The illegitimate banker-government relationship has exposed an urgent need for fundamental reforms.
As for Janet Yellen, thinking progressives' favorite for the nomination, Greider writes:
The best reason to turn Summers out to pasture is that Obama has a far better choice available—a more experienced central banker and moderately liberal economist named Janet Yellen. She is vice chair of the Federal Reserve Board in Washington and has been a close ally of Bernanke and a strong voice for focusing on jobs and other threatening weaknesses in the broad economy. She served for some years as president of the San Francisco Federal Reserve Bank and before that a term as governor before Obama appointed her as vice chair.
And in his article, "No More Second Chances for Larry Summers?" Greider declares:
Does the Clinton-Rubin establishment believe, like Larry Summers, that boys really are smarter than girls? Reporters like Klein should ask, because that’s the way it looks. Women at large should mobilize an aggressive pushback—no more second chances for Larry Summers. The Obama administration should impose a glass ceiling on the old boys who got it wrong.
Still hoping Obama will do the remotely right thing for us, the lower 99%ers, men, women and children, are you?
Don’t you know anything about Barack Obama's “lesser evilism” by now?
[cross-posted on open salon]