The Garance on the Kagan Thesis
Presents from Me to Myself: May 17, 2010

William Galston Asks: "My Question Is Not Whether Larry Summers Is a Brilliant Brain but Whether There Is Anyone Who Has the Ability to Challenge His Point of View"

The answer is "yes." Tim Geithner, Peter Oszag, and Christy Romer can certainly Challenge Larry Summers. Jared Bernstein probably could, but he may not have realized that, as Christy Romer puts it, "it is a sign of respect when Larry argues with you. Far better than being ignored." And there is no f---ing doubt that Rahm Emmanuel can f---ing stand up to Larry Summers any f---ing time he wants.

Galston appears to me to simply be off-base.

Ed Luce surveys the terrain:

America: A middle course: According to Barack Obama’s liberal critics, the US president betrayed the progressive cause before inauguration day by selecting a bunch of Clinton-era advisers to run his economic team... the most experienced and market-friendly Democratic economists available.... Eighteen months later, they argue, the president is a prisoner of the authors of the late 1990s Wall Street deregulation that paved the way for the 2008 crisis. Worse, he is suffering from Stockholm syndrome – a captive who loves his jailers....

Mr Obama’s presidency will stand or fall on the success of his economic policies. Does he have the best people around him? And, having quenched the fires of the financial crisis, can they build an economy for the 21st century? Mr Obama has a core economic team of five people whom he meets each morning for about 45 minutes. Headed by Mr Summers... Tim Geithner, Treasury secretary and a former protégé of Mr Summers; Peter Orszag, the budget director, who served in the Clinton White House; Christina Romer, who chairs the Council of Economic Advisers, an in-house think-tank, and was an academic at University of California, Berkeley; and Jared Bernstein, economic adviser to Joe Biden, vice-president, and the most liberal participant.... Rahm Emanuel, his chief of staff; Valerie Jarrett, a senior adviser; Mr Axelrod; and Mr Gibbs... sometimes joined by Jason Furman or Diana Farrell, Mr Summers’ deputies; Neal Wolin, deputy Treasury secretary; or Austan Goolsbee, Ms Romer’s deputy.

All the signs are that Mr Obama wants to keep the team he has – indeed, he recently persuaded Mr Orszag to stay on. In spite of his ebullient style, Mr Summers, whose ambition to head the Federal Reserve was thwarted last August when Mr Obama reappointed Ben Bernanke as chairman, is highly valued by the president. “There are times when Larry and I have shocked non-academic colleagues by arguing as we would in an economic seminar,” says Ms Romer. “But it’s a sign of respect when Larry argues with you. Far better than being ignored.”

Mr Summers is the intellectual driving force of the group.... “While this administration is very much driven by the inner circle of political advisers, Summers has clearly emerged as Obama’s economic [Henry] Kissinger,” says David Rothkopf, a former Clinton official.... Summers describes the president as: “Pragmatic, non-ideological and market-oriented but not fundamentalist”. For Mr Orszag, he is “pragmatic but centrist and pro-free market”. Ms Romer says: “The key thing is pragmatism – his philosophy is not ideological but he is truly pro-market.” Mr Bernstein, who converted to Buddhism some years ago, says the adjectives he would use “are balanced, pragmatic, Zen”.... [A]ll emphasise that Mr Obama found no pleasure in taking temporary ownership of General Motors, the carmaker, or stakes in the troubled banks. In addition, the president’s economic advisers point out that they have done far more in the past year than put out the fire. The enactment in March of Mr Obama’s 10-year $1,000bn healthcare reform was a key foundation stone in America’s new economic building, they argue. Mr Summers, initially sceptical about pushing such a big reform in the midst of a crisis, ended up arguing for retention of the full bill when others suggested slimming it down following the loss of the late Ted Kennedy’s Senate seat in Massachusetts in January. Both Mr Summers and Ms Romer were also enthusiastic about the bill’s potential to reduce future deficits. “There were strong economic reasons why you could not get half the bill at half the price,” says Mr Summers.

But scepticism persists.... While conceding Mr Summers is probably the best economic brain available as an adviser, critics question his enthusiasm for the other half of his job – running the inter-agency process. “Whether President Obama is a guy who appreciates the importance of the structural process that produces the best possible input into the economic conversation – well, you’d have to say it doesn’t seem like it,” says John Podesta, a former chief of staff to Mr Clinton.... William Galston... highlight[s] a different problem: the fact that Mr Summers is unchallenged as the “alpha brain” in the room.... “My question is not whether Larry Summers is a brilliant brain but whether there is anyone who has the ability to challenge his point of view,” says Mr Galston. “I know in my case that when I hear a fluent, and seemingly unimpeachable argument, what I want to hear next is an equally fluent rebuttal. Does President Obama have that? Brilliant brains also get it wrong.”

Questions have also arisen about the extent to which the inner circle overrides advice from the economic team....

Yet the president has confounded critics before. “Over the last five years, anyone who has shorted Obama has lost money,” observes one economist. Many hope he will unleash a more creative phase of economic policymaking after November’s midterm elections.... After that, optimists hope, the president will have a freer hand to propose more radical solutions to cut through America’s fiscal conundrum by confronting the runaway entitlements inflation and even by taking on bloated defence outlays, hitherto considered off limits. “We have 11 aircraft carrier formations and three different platforms to fire nuclear weapons at the USSR,” says Mr Frank. “It doesn’t make much sense to me.”...

As the saying goes, Mr Summers serves at the president’s pleasure. For the time being, that pleasure appears to be mutual.

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