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The problem with Larry Summers

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You're seeing some White House pushback on the idea that Christina Romer is leaving because she's tired of fighting with Larry Summers. And fair enough: People do tire of serving in the pressure cooker that is the White House, Romer and Summers were often on the same side of debates, and the press's tendency to emphasize internecine conflict as the motivation for staff resignations certainly distorts the coverage of these things.

But the speculation and blind quotes aren't coming out of the blue. Complaining about Larry Summers is a fairly popular pastime for White House staff, though the complaints are a bit subtler than people might imagine. They don't want Summers gone. They don't think his advice is bad, or his heart is in the wrong place. They don't even want him to stop dominating the meetings. They just don't think he's well-suited to running the meetings.

The critique of Summers is very consistent, and it's really not about him or his vaunted arrogance. It's his position. Summers runs the National Economic Council, which is the body charged with coordinating the president's economic process. But Summers, for all his brilliance and charm, is not the guy you want running meetings and smoothing disagreements and making people feel included. Summers doesn't facilitate debates. He wins them. He wants to be the guy Obama listens to, not the guy who listens to everyone else, and to a large degree, he is.

Over time, this has led to problems in the White House's economic process: People get left out, the lines of authority aren't always clear, and the guy who's supposed to be worrying about all that stuff is instead trying to get the president over to his side of the argument. This has made the White House economic process an unpleasant place to be, particularly if you're not one of the few who have a truly direct connection to the president. And that unpleasantness is part of the problem here: People don't stay in jobs they don't like.

Is that why some of the big names have left early? It's impossible to say. It really does seem that Peter Orszag wanted to go get married. I have no reason to doubt Romer's homesickness. But it's made for a worse policy process and has made it easier for some staff members to contemplate pursuing other opportunities, particularly now that the economic emergency is over.

The pity is that all this was predictable. There's a report, which I unfortunately can't find right now but I'm hoping one of my commenters will link to, in which these concerns were brought to Obama during the transition. Obama said that he didn't need Summers to run the process. Obama could run the process. But that, of course, couldn't happen. Obama is president. He's busy. He doesn't know what everyone thinks and feels, and staffers try not to bother the President of the United States of America because they feel insufficiently attended to. So this problem has gotten worse, and you can see it in stories like the ones surrounding Romer's departure. When the opportunity arises for staffers to complain about life in the economic policy process, they complain about Summers.

Photo credit: By Pete Souza/White House

By Ezra Klein  |  August 6, 2010; 4:39 PM ET
Categories:  Obama administration  
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Comments

Summers penned an embarrassing encomium to Milton Friedman on the occasion of that economist's death in the New York Times; he sold, by all accounts, rotten mortgage-based derivatives to Japanese investors during his stint as managing director at the hedge fund D.E. Shaw; and he orchestrated the ruinous gutting of the Glass-Steagall Act during his tenure in the Clinton administration.

Is he smart? Without a doubt. Is he charming? I'll take others' word on that. But is he the right man for this job during our current economic catastrophe? No.

If there were anything remotely like "accountability" for someone like Summers, he wouldn't have been allowed within 5 miles of the White House. And yet, here he is!

Posted by: stevedew77 | August 6, 2010 4:55 PM | Report abuse

Suppress that guinea pig!

Posted by: harold3 | August 6, 2010 5:26 PM | Report abuse

"I have no reason to doubt Romer's homesickness."

Buddy Ezra, with the kind of beautiful weather it has been this year in California, it is a wonder how come you have not become home sick too and heading to CA.

Anyways, I think the problem is much simpler with Summers than what you are trying to articulate.

Simple thing is Summers along with Geithner and Bernanke showed ownership for the problem of saving Banking & Financial system but not to the problem of Job Creation (and saving Housing for Main Street). Romer landed up single handedly trying to save this 'job creation' ship.

It is the cardinal mistake of Leadership which Obama is making and Rahm & Axelrod are party to it - the mistake is after the victory lap of saving American Banks (by NOT Nationalizing them); he should ensured that the trio of Summers, Bernanke and Geithner are up to the problem of solving job creation.

If Job Creation requires one more Trillion Dollars of Stimulus, why is Obama sitting in Oval Office with hands closed? Do we think twice in 'war' what does it cost? Is it not his job to frame the whole issue of Job Creation as the war and making the Trio as the fundamental executioner of that policy? What is the point of Obama Presidency if he does not want to spend the political capital to get buy in from Congress for whatever is needed to win this battle against unemployment?

If the Trio says it is the issue of 'increasing confidence of business folks'; again why is Obama quite? Spend that political capital to bring whatever is needed for this Trio to fix this issue. Make sure they are the executioners here and fully accountable. They fail, they get booted out.

Obama simply not doing his basic duty of 'governance' here. Don't try to tell us this problem of unemployment (despite GOP filibuster for whatever is needed to do) is insurmountable. He needs to hold the Trio Responsible. Media needs to do that too. Just having some glorified pictures of them is no use.

Of course Summers, Bernanke and Geithner are smart not have skin in the problem of 'creating jobs'. But then is it not Obama's job to halt this 'free ride' of these advisers and kick their butts to do this job? These 3 folks are in the best position to apply their mind, analyze the situation and come up with prescriptions and then Obama goes to Congress and to the country get those needed resources to get that policy prescription executed.

Posted by: umesh409 | August 6, 2010 5:45 PM | Report abuse

Someone has to take the hit because Obama will not take the responsibility. What a miserable failure this president has become,ex-dempcrat.

Posted by: farmsnorton | August 6, 2010 6:31 PM | Report abuse

It's interesting to speculate about who on Romer's staff has been talking to who on JournoList to get this coverage of Summers rolling.

Posted by: tomtildrum | August 6, 2010 6:40 PM | Report abuse

Somebody was worried that Larry Summers MIGHT be lame? duck

Posted by: rmgregory | August 6, 2010 6:47 PM | Report abuse

I just I'm more of a Geithner fan simply because his parents live near my grandparents: http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20090809/BIZ/908090301/-1/BIZ02

I'm sure there was a screaming match between Romer and Summers written about in Jonathan Alter's "The Promise."

Posted by: Corey_NY | August 6, 2010 7:29 PM | Report abuse

Is this a case of 'The Economist has no clothes'?

1. For years, I have heard that Larry is the 'greatest economist of our generation'. I have tried to understand why. I even asked my colleague (a Nobel winner in Economics a few years ago) if he could help me understand....but he could not furnish a satisfactory proof. I did find out that two of Larry's uncles have won Nobel prizes, but I doubt if that should count too much.

2. Maybe it is not Larry who is the problem. No economist can figure out what to do because (a) theyre is no solution available through economic thinking and/or (b) (research) Economists cannot exist if the issues are/can be closed.


Posted by: AcademicCapitalist | August 6, 2010 7:50 PM | Report abuse

Summers is a very distinguished, competent, and steady hand. But he was closely associated with the team that created the crisis through unfettered free markets, innovation, 'too big to fail', and lax monetary policy, along with guys like Greenspan, Rubin, Geithner, Bernanke. I can understand Obama appointing him when he took office in the heat of the crisis, but keeping all these guys around it gives the lie to the campaign of 'change'. The crisis was attacked with vigorous short-term measures, but the banks are still too big to fail and undercapitalized to lend, and Wall Street reform was weak beer, and everyone is back to business as usual, until the next inevitable crisis.

Posted by: curmudgeonlytroll | August 6, 2010 8:08 PM | Report abuse

Summers discounting the intelligence of a woman's proposals. That would never happen

Posted by: williamcross1 | August 6, 2010 8:22 PM | Report abuse

Summers, always one of the smartest guys in the room, is always one of the smartest guys in the room; don't believe, it? Just ask him.

Arrogant, ego centered and full of his own intellect, Summers has never been a team player and team builder. It was what eventually did him in at Harvard where he isolated himself from others and attempted to lead without first bothering to build a following.

Larry made a ton on Wall Street. He does not need to work another day in his life and if Obama has any common sense he will accomodate him. Christine Romer was the fall guy for policies which Summers pushed. If Obama really believes he should be held accountable for mistakes as well as triumphs it is time he admit appointing Summers was a bad call. Fix it before he does any more damage.

Posted by: bobfbell | August 6, 2010 8:43 PM | Report abuse

Maybe someone could enlighten me as to the basis for all the adulation for Summer's intellect. I'm not being sarcastic, I'd honestly like to see a detailed treatment by Ezra or anyone else of what this man has so magnificently accomplished with his mind that bends time and breaks big stacks of bricks without his even touching them.

From all I've read about him or his ideas, he seems to have been pretty successful bullying people, both before and since his current position in the administration, into agreement on an economic ideology whose consequences have been disastrous for everyone but the Wall St. crowd they were designed to serve. And all that proves is that he's an effective bully.

Is there more?

Posted by: andrewbaron78 | August 6, 2010 11:09 PM | Report abuse

Larry Summers is a very accomplished academic economist and a total disaster as a real world economist, with questionable ethics and character to boot. Does the academic accomplishment make him "brilliant" despite all the real world failure? I disagree with Ezra that it does.

Posted by: mrnegative | August 6, 2010 11:54 PM | Report abuse

FWIW, I think the source you're looking for was Jonathan Alter's latest book on Obama. I read that comment there.

Posted by: KathyF | August 7, 2010 3:58 AM | Report abuse

He's bad at running meetings? Maybe the point is we they fewer meetings, less talk, and more action.

My experience in fortune 100 corporate land makes me skeptical of the the view that there is bad process. Summers may be arrogant and want to win and policy debates, but the meeting culture in American business and government is a complete waste of time. The idea that adults have to feel "included" is so much nonsense. This is why nothing ever gets done.

Posted by: Neal3 | August 7, 2010 5:33 AM | Report abuse

Tell me 3 admirable smart things that Summers has accomplished. He cares about banks. Banks are making money, so Summers is happy. Joe Schmoe can't find a job. Big deal. Where is the evidence that Summers cares about that? Would FDR choose Summers?

Posted by: annegreen | August 7, 2010 8:02 AM | Report abuse

Summers record and performance can be measured by the results in the economy since Obama took over. In a word: HORRIBLE! Obama is too naive and inexperienced to shut Summers down and find a PRACTICAL, EXPERIENCED economist!

2010....WITHOUT DOUBT, VOTE THEM OUT!

http://eclecticramblings.wordpress.com

Posted by: my4653 | August 8, 2010 12:39 PM | Report abuse

Summers, Geithner and Bernanke are going to cost the Dems the House and the Senate, and Obama a second term. That's a bigger price than even Harvard had to pay for Summer's "brillance".

Posted by: glenjo | August 8, 2010 7:33 PM | Report abuse

Against his accountants, Larry Summers invested ALL of Harvard's current cash accounts in to credit default swaps -- then he leveraged the cash even more....

A little known fact: October 2008, Harvard almost SHUT DOWN and had to liquidate massive amounts of the endowment.

Over 1000 people have been laid off (compare this with Princeton and Yale).....

That's what it looks like when Larry Summers is left in charge of "managing the process"

Posted by: cathykay | August 9, 2010 6:17 PM | Report abuse

Ezra, there is this report which I cannot find at the moment --- it may have actually run in the WaPo some months ago, but my recollection of its contents makes it very unlikely that WaPo would have run it --- hopefully a poster here can find a link.

It was penned by someone who took some classes from Summers at Harvard; it seems in those classes he made strong arguments against almost everything he has done since joining the Obama administration.

Posted by: Curmudgeon10 | August 9, 2010 8:20 PM | Report abuse

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