Is Larry Summers the Dick Cheney of the Obama Administration?

Seventeen months ago I did a post entitled “President Obama: You need to talk to Christy.”  According to Hotline On Call, he didn’t take my advice.

Christina Romer, chairwoman of Pres. Obama’s Council of Economic Advisers, has decided to resign . . .

“She has been frustrated,” a source with insight into the WH economics team said. “She doesn’t feel that she has a direct line to the president. She would be giving different advice than Larry Summers [director of the National Economic Council], who does have a direct line to the president.”

“She is ostensibly the chief economic adviser, but she doesn’t seem to be playing that role,” the source said. The WH has been pounded for its faulty forecast that unemployment would not top 8% after its economic stimulus proposal passed.

Instead, the jobless rate is 9.5%, after exceeding 10% last year. It was “a horribly inaccurate forecast,” said Bert Ely, a banking consultant. “You have to wonder why Summers isn’t the one that should be taking the fall. But Larry is a pretty good bureaucratic infighter.”

Christy Romer did a lot of research showing that monetary stimulus was the main factor boosting the economy during the 1930s, not fiscal stimulus.  She also found that tax cuts are a particularly effective form of fiscal stimulus.  I wonder if this means Obama will not go along with attempts to extend the Bush tax cuts?

About Scott Sumner 490 Articles

Affiliation: Bentley University

Scott Sumner has taught economics at Bentley University for the past 27 years.

He earned a BA in economics at Wisconsin and a PhD at University of Chicago.

Professor Sumner's current research topics include monetary policy targets and the Great Depression. His areas of interest are macroeconomics, monetary theory and policy, and history of economic thought.

Professor Sumner has published articles in the Journal of Political Economy, the Journal of Money, Credit and Banking, and the Bulletin of Economic Research.

Visit: TheMoneyIllusion

1 Comment on Is Larry Summers the Dick Cheney of the Obama Administration?

  1. Romer is on to something that works well; the president is taking his advice from a loud voice that Harvard cut their losses and jettisoned.

Leave a Reply

Your email address will not be published.


*