Former Treasury Secretary Larry Summers: "$2,000 checks would be a pretty serious mistake."

[Celerity]

20. Falling Upward: The Surprising Survival of Larry Summers

The surprising survival of a rebranded Larry Summers, who once again is counseling a Democratic presidential candidate

https://prospect.org/economy/falling-upward-larry-summers/

Larry Summers’s public career has been marked by a carnival of policy debacles, punctuated by his brief, accident-prone tenure as president of Harvard. Yet, at 65, he is once again a senior economic adviser to another prospective Democratic president—one who has gingerly embraced transformative policies that Summers has long opposed. Joe Biden and his handlers are aware that Summers is radioactive to much of the Democratic coalition. His campaign has downplayed Summers’s role. In fact, Summers is not only part of Biden’s senior economics policy team, but he is able to end-run other advisers and have one-on-one conversations directly with the former vice president.

Though much has been written about Summers, it’s worth reviewing the dynamics of his influence, serial repositioning, and uncanny survival. The more mistakes Summers makes, the more he is treated as a seer. This is a complex man, with a brilliant mind and nimble political skills. He has powerful patrons and protégés. Perhaps most importantly, his views are very congenial to powerful financial elites, who have a great deal to lose should Joe Biden turn out to be another Franklin Roosevelt. Summers has already held the two top Cabinet jobs on economic policy: Treasury Secretary under Bill Clinton, and director of the National Economic Council for Barack Obama. The career-capper post that has eluded him twice is Federal Reserve chair. He’s positioning himself through a familiar Summers tactic: wholesale image transformation.

Since exiting government in 2011, Summers has been engaged in a rebranding exercise, positioning himself well to the left of policies he espoused and carried out while he enjoyed actual power. A Summers trademark is never to apologize for mistakes earlier in his career, and to spin the truth to make his actual views sound different from what they were. But the one area where he has neither altered his views, nor claimed different ones, is financial deregulation. Summers, unrepentant, continues to view it as his supreme accomplishment. That alone should give Joe Biden pause. Summers was born into economic royalty. Two of his uncles, Kenneth Arrow and Paul Samuelson, are Nobel laureates, both left of center. His parents, Robert Summers and Anita Arrow Summers, are also economists. His early work on economic theory and practice, which won him a John Bates Clark Medal for the most outstanding economist under age 40, often assessed how markets in practice were not as self-correcting as they are in theory.

But as a young professor at Harvard, while keeping some ties to more moderate economists, Summers attached himself to Martin Feldstein, the campus doyen of free-market advocates. When Milton Friedman died in 2006, Summers gave a gushing eulogy, declaring, “Any honest Democrat will admit that we are all now Friedmanites.” That certainly describes the Summers wing of the Democratic Party. We will soon find out whether it describes Biden. Feldstein, who chaired Reagan’s Council of Economic Advisers, gave the young Summers a staff job in 1982–1983. In the 1988 presidential campaign, Summers burnished his Democratic credentials by advising Michael Dukakis. In the meantime, having been introduced by a former student working at Goldman Sachs, he had struck up a friendship with Robert Rubin. The two men were taken with each other. Summers was fascinated to watch a master trader at close range, and Rubin admired Summers’s brilliant capacity to rationalize Goldman’s activities as sound economics.

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