Evan Vucci/AP Photo
Larry Summers, then chief economic adviser to Obama, arriving at the Department of the Interior for a meeting with BP executives, May 2010
As I wrote last week, the Biden campaign has been doing its best to conceal Larry Summers’s involvement in the campaign. But now Bloomberg News has outed him.
Summers as Clinton’s Treasury Secretary promoted the financial deregulation that crashed the economy. Then, after the collapse, he made sure that the banks got rescued while allowing homeowners to be thrown under the bus.
As head of Obama’s National Economic Council, he lowballed the need for stimulus. He was part of the crew that pivoted too soon to austerity in early 2010. As I wrote in this Prospect piece, Summers was also the prime Clinton official responsible for the pressure on Mikhail Gorbachev to abruptly privatize state assets, leading directly to their appropriation by corrupt oligarchs.
This is a guy who manages to fall upward. He makes calamitous blunders at every stage of his career, but keeps arising from the dead.
Summers’s modus operandi is both to deny what he did or argued for, and claim that in any case he has now revised his views. In emails and personal conversations with me, Summers makes himself sound like the second coming of John Maynard Keynes.
He alternates between attacking me and trying to flatter me. He even had me guest lecture in his class at Harvard, where his benign characterization of hedge funds and private equity (for which he consults) made them sound like mom-and-pop family businesses.
This classic investigative cover piece in National Journal by Michael Hirsh, from 2013, which helped get Summers removed from contention from the top Fed job, documents his method, chapter and verse. After Summers personally complained to David Bradley, then the publisher of Atlantic Media, which owned National Journal, Hirsh was advised to seek other work—he ended up moving to Politico and then to Foreign Policy, though no errors were ever found in the Summers piece and no correction was ever issued.
So now the fat is in the fire. Biden is trying to reassure progressives, such as Elizabeth Warren and Bernie Sanders and their supporters, but he turns to Larry Summers for economic-policy advice. Biden’s campaign first tried to waltz around the fact that Summers was involved—which itself speaks volumes. Progressive groups Justice Democrats and Sunrise are circulating a petition requesting Biden to sever ties with Summers.
Biden has especially been courting Warren. But it’s hard to imagine that Biden can have both Summers and Warren, who was instrumental in keeping Summers off the Fed. It’s just as important that he be kept out of a Biden administration, either in a major job like Fed chair or as part of the kitchen cabinet. It’s great for Biden to value a big tent—but watch out for who is the tentpole.
My own reporting indicates that Summers not only plays a direct role, but has managed to insert close allies and protégés to argue against progressive policies, including his former student and frequent co-author Natasha Sarin (they wrote an op-ed trashing Warren’s proposed wealth tax), as well as Adam Looney, who served with Summers at the Obama White House and then was policy director of the Robert Rubin–sponsored Hamilton Project.
Biden can’t blame his handlers for Summers. He’s the guy in charge. Over to you, Joe.
