In the New Republic, Noam Scheiber, who has covered the Obama administration and Larry Summers for years, writes that the debate over Summers has really been a debate over the direction of the Democratic Party.
…the Summers fight was the first fully-engaged Obama-era battle over the future of the Democratic Party—not just over its economic philosophy, but its whole economic constituency.
Liberal Democrats have long resented Obama’s decision to turn to, shall we say, the Rubin tong to shape the Administration’s response to the crisis, Scheiber argues. In particular, Millenials, whose formative professional years have been dominated by the economic crisis, are far to the left of the Clinton gang; according to Scheiber, polls suggest they narrowly favor socialism over capitalism. So they’re not too big on the Rubin-esque either.
There’s a lot to this, I think; Obama has never really won the trust of the left when it comes to economic policymaking because so much of his economic team is connected to Rubin and Wall Street. (Tim Geithner, Jack Lew, Larry Summers, Jason Furman.) The more liberal economic thinkers in the Administration have generally been exiled: Christy Romer, Elizabeth Warren. And unfortunately for Obama—and Larry Summers—they happen to have been women.
Scheiber has some particularly good material in this piece about Summers. To wit:
A senior Democratic Senate aide told me that several senators were bubbling over with rage toward Summers in January 2009, as he lobbied them to make the second tranche of bailout money available to the administration. They blamed Summers for many of the Clinton-era deregulatory efforts that helped cause the crisis. During one meeting of senators around this time, John Kerry thundered, “Why the hell should I listen to Larry Summers?” according to the aide, who was present. Several other senators chimed in in agreement.
I would love to know if their rage was about the way in which Summers was lobbying them or their anger at his deregulatory history. Both, I would think.
This continues my train of thought about who is advising the president. When Obama’s now secretary of state has said, and been quoted in a book published several years ago, “Why the hell should I listen to Larry Summers?” and a bunch of senators concur, that’s something you should probably consider before planning to nominate him to the Fed. There’s little sign Obama was aware of such sentiment.
Ultimately, Scheiber says, the left had pretty legitimate gripes against Summers—his deregulatory philosophy, his Wall Street buckraking.
And then there’s this, which I found fascinating:
More broadly, Summers has always been much too enamored of big shots, particularly financial elites, to make you trust his judgment when their interests are at stake. In my recent book about Obama’s economic team, I describe Summers’s gleefulness in attending quarterly dinners with Wall Street executives in his capacity as a Treasury official in the 1990s. The satisfaction he derived from rubbing elbows with the masters of the universe reflected a lifelong pattern, so far as I could tell. I would not have expected it to change should he have ascended to the chairmanship of the Fed.
Here’s a story I would love to see someone report: Elizabeth Warren’s role in all this. While I believe that she would never have voted for Summers and some published reports have said she was opposing him in part because of his opposition to her to head the Consumer Financial Protection Bureau—whew, sorry about that—she’s been very quiet about this, and in fact has not said how she would have voted.
Elizabeth Warren, I think, should not be underestimated…