Loose Links:
Seven Reasons
5 September 2013
¶ Nick Holdstock appraises the “trial” of former Chongqing macher Bo Xilai at the LRB blog, in “Seeking Truth from Facts.”
¶ Could it be true? Bill Morris asks us to take his word for it that Marisha Pessl’s “writing has done a lot of growing up in the seven years since Calamity Physics was published,” and that “Pessl’s cleverness and bloat have given way to assurance.” You go first. (The Millions)
¶ Robert Kaplan broaches a “Byzantine strategy” for dealing with Syria. We ponder the following remark with grave interest, because it appears to overlook the fact that President Obama is an accountable democratic leader:
President Barack Obama’s mistake is not his hesitancy about entering the Syrian mess; but announcing to the Syrians that his military strike, if it occurs, will be “narrow” and “limited.” Never tell your adversary what you’re not going to do! Let your adversary stay awake all night, worrying about the extent of a military strike! Unless Obama is being deliberately deceptive about his war aims, then some of the public statements from the administration have been naïve in the extreme.
One suspects that a Republican president would not have drawn this criticism. (RealClearWorld)
¶ Why is that pig on a leash? Truffle-hunting in Oregon with dogs. (Modern Farmer; via Brainiac)
¶ You can read the whole piece at Naked Capitalism, but just the checklist of Lynn Parramore’s “Seven Reasons to Fight Obama on Picking Out-of-Touch Crony Capitalist Larry Summers as Fed Chair” will do. (To which we would add an eighth: Harvard’s endowment.) But especially:
3. Summers is not terribly interested in unemployment.
Supporters of Larry Summers like to talk about his brilliance, but in reality he is a highly conventional economist who advocates raising interest rates too fast and places too much emphasis on deficits over jobs. Part of the Fed’s mandate is to move the country toward full employment, so Summers’ history of lackluster interest in jobs is yet another red flag.
Janet Yellen, Summers’ main rival for Fed chair, has consistently advocated for expansionary Fed policy focused on reducing unemployment. While out of power, Larry Summers has given lip service to the importance of jobs, but we’ve seen him in power enough times to know that jobs have never really been a major concern for him. Summers, the political protégé of deficit hawk Robert E. Rubin, the Treasury secretary under Clinton, has repeatedly shown — most recently during his years as Director of the National Economic Council under Obama — that if it comes down to a choice between jobs and austerity, he’s usually on the side of austerity. The kind of austerity that kills jobs and undermines programs like Social Security, Medicaid and Medicare.
Economist Dean Baker reveals that if you want to find the “smoking gun” in the Obama administration that led to a focus on deficit reduction instead of jobs, look no further than a memo drafted by Summers in December 2008, a month before Obama’s inauguration. The memo, which was wrong about the economy on several counts, set the stage for policies that drove an ongoing jobs crisis and led to Obama’s creation of a deficit commission led by former Senator Alan Simpson, a zealot for cutting Social Security and Medicare, and Morgan Stanley director Erskine Bowles. (The duo relied on famously discredited work by economists Carmen Reinhart and Kenneth Rogoff to push austerity).
Since he left the National Economic Council in 2010, Summers has been talking down austerity and talking up the importance of jobs and the middle class. But how he acts when in power and how he talks when out of it are two vastly different things. His doubtful record on adequately stimulating the economy and his political baggage are so worrisome that many — even some business-minded folks — have warned that his leadership at the Fed would be harmful to the economy. The Economist magazine has cautioned that Summers would likely be a Greenspan style “maestro” at the Fed, less interested in transparency and consensus-building in his decision-making than Yellen. In the NYT, Binyamin Applebaum explained that many financial analysts fear a Summers nomination “could lead to slower economic growth, less job creation and higher interest rates…”
Americans are still suffering from the effects of the Great Recession and years of wrong-headed economic policy. We need a Fed chair focused on unemployment and investing in the economy.