I think it is safe to say that Larry Summers was an advocate for the economic status quo despite the crash it caused. Had the President seen in the memo the $1.8 trillion dollar number floated by a respected member of the team, he might have sensed the gravity of the economic situation more keenly. By capping the stimulus proposal at $850 billion, Summers, and I imagine Geithner, both fronts for Wall Street. could re-frame the severity of the crisis downward. The President is an intelligent man, who given the facts of a $1.8 trillion bailout as a necessity might have asked the question that neither Summers, Geithner or Wall Street wanted asked: "Will a stimulus be enough? What kind of regulations do we need to impose on the Financial Sector to prevent this crisis from reoccurring?" The question of Glass-Steagall may have entered into the discussion.
No decision maker can make appropriate decisions if key data is withheld. It seems Obama got the short-shrift from his economic team.
Our economy could be in a far better situation now if Romer's position wasn't suppressed by Summers, and Geithner. Romer's mistake was deferring to Summers because of his resume, if she believed in the necessity of the $1.8 trillion, then she should have fought for it or resigned to bring attention to her concern. Giving the benefit of the doubt to Summers was a "nonplanetary" thing to do, as we now know.
Read the Article at HuffingtonPost
No comments:
Post a Comment