MoDo has a question today in “Summers of Our Discontent:” Can’t the president find someone to run the economy who didn’t help create the culture that ran it into the ground? The Moustache of Wisdom has produced an extraordinary turd called “Obama, Snowden and Putin” in which he babbles that the Russian president is doing more harm at home than anywhere else. Here’s MoDo:
I have no doubt that Larry Summers can speak truth to power. Indeed, I’ve seen him yawn at power.
Once, when Vice President Biden was talking to a small group at a holiday party, Summers yawned, checked his watch and walked away while Biden was in midsentence.
While he’s not exactly socialized — he had a lot of unhappy colleagues when he ran the Obama White House’s economic team — I have no doubt that Summers is genuinely smart and gets some credit for the policies that produced the recovery. I’m sure the imperious economist is more mellow than he used to be, because life has taught him he has to be.
But the idea that it is somehow historically inevitable that the chairmanship of the Federal Reserve should go to Summers, that it belongs to him, that he would be an enthusiastic enforcer of bank regulation to protect the little guy?
I have my doubts.
This idea is being pushed by the boys’ club around President Obama, and also by the bullying cool kids, some of the Wall Street types like former Treasury Secretary Robert Rubin who paved the way for the country’s ruin. Larry’s loyal former protégée Sheryl Sandberg aside, it evokes a sexism of complacency — just a bunch of alpha males who prefer each others’ company and who all flatter themselves that they’re smart enough to know how smart Summers is.
These days, it’s impolite to mention that all those cool bankers that President Cool didn’t punish enough brought the country to the brink of disaster.
One person unafraid to recall it is the Divine Miss M, who has been trashing the Disheveled Mr. S in tweets this week, picked up by Washington Post economic columnist Neil Irwin.
2:34 AM — 10 Aug 2013
HUH. The architect of bank deregulation, which turned straitlaced banks into casinos and bankers into pimps, may be next Head Fed: Summers.
11:26 PM — 11 Aug 2013
Larry Summers, Mr. De-Regulation, has never stepped forward to say … “Oops! My bad!”
Even Bill Clinton has offered an “oops,” saying he got bad advice from Summers and Rubin.
In the late 1990s, when the prescient Brooksley Born, then chief of the Commodity Futures Trading Commission, wanted to publicly examine derivatives, Summers, who was deputy Treasury secretary, worked with Rubin and Alan Greenspan to block her.
Michael Greenberger, a University of Maryland law school professor and former Born lieutenant, told The Post that Summers called and said: “I have 13 bankers in my office, and they say if you go forward with this you will cause the worst financial crisis since World War II.” Instead, these bankers were behind the policies that caused the worst financial crisis since before World War II.
As The Times reported this week, when the 58-year-old Summers came to the Obama White House, he was worth $7 million; when he left at the end of 2010, he “jumped into a moneymaking spree” at a hedge fund and at Citigroup — a bank rescued by a government bailout — so he could be a gazillionaire by the time Ben Bernake retires and the job is open.
His stuffing of his pockets within hours of leaving the White House job now makes it unseemly for him to lead the Federal Reserve in enforcing the important new regulations from the Dodd-Frank financial reform bill.
He is an exemplar of, rather than a solution to, the obscenely lucrative revolving-door problem mocked by Mark Leibovich in his new book, “This Town.”
The Fed is entering a new era when it is supposed to be getting tough on the banks, even if it means that the banks are smaller and less profitable and that shareholders make less.
Sure, Summers, the son of two economists and nephew of two Nobel laureates in economics, has a high I.Q. and inspired a great cameo bit in “The Social Network.” But there has to be somebody out there to run the economy who wasn’t a part of the culture that ran the economy into the ground.
Janet Yellen, the Fed’s vice chair, has generally been more publicly aligned with Bernanke than Summers has been in using monetary policy to revive the economy. If the president passes over the trailblazing and more temperamentally stable Yellen to appoint Summers, he’ll be giving Larry some vindication on his infamous critique of women that helped get him ousted as president of Harvard — a job he got thanks to Rubin.
Does the fact that we’ve had no female Fed chairs and no female Treasury secretaries mean that Summers was right when he said women are less likely to have the kind of brains that would allow them to get top jobs requiring math skills?
Is that what makes Larry Summers so brilliant?
Now here’s The Moustache of Wisdom’s dump:
You only get one chance to make a second impression. It seems to me that Edward Snowden should use his and that Russian President Vladimir Putin has blown his.
Considering the breadth of reforms that President Obama is now proposing to prevent privacy abuses in intelligence gathering, in the wake of Snowden’s disclosures, Snowden deserves a chance to make a second impression — that he truly is a whistle-blower, not a traitor. The fact is, he dumped his data and fled to countries that are hostile to us and to the very principles he espoused. To make a second impression, Snowden would need to come home, make his case and face his accusers. It would mean risking a lengthy jail term, but also trusting the fair-mindedness of the American people, who, I believe, will not allow an authentic whistle-blower to be unfairly punished.
As for Putin, he blew his second impression — the reset in U.S.-Russian relations — long before he granted Snowden asylum. Dealing with Putin always involved a certain trade-off for America: accepting a degree of Putin authoritarianism in return for cooperation on global issues that mattered to us, as long as Putin “sort of” kept Russia moving toward a more open, consensual society. But the balance is not there anymore. Putin’s insistence on blocking any diplomacy on Syria that might move out “his guy,” President Bashar al-Assad, his abuse of Russian gays and lesbians, and his blatant use of rule-by-law tactics to silence any critics mean that we’re not getting anything from this relationship anymore, nor are many Russians.
But rather than punch Putin in the face, which would elevate him with his followers, it would be much better to hit him where it would really hurt by publicly challenging the notion that he is making Russia strong.
Here’s what Obama could have said when asked about Putin last week: “You know, back in 1979, President Putin’s brutal Soviet predecessors sent us Sergey Brin and his family. As you know, Brin later became the co-founder of Google. That was Russia’s loss, but a gift to us and to the world. We could not have enjoyed the benefits of search had the Soviets not made life so unattractive for Brin’s family. I make that point because Putin doesn’t seem interested in making life attractive in today’s Russia for the Sergey Brins of his generation. Putin only seems interested in sticking pipes in the ground and extracting oil and gas — rather than the talents of his own young people — and making sure that he and his cronies get their cut of the oil flow.
“Look what Putin just did. Sergei Guriev is one of the most talented of Russia’s new-generation economists. He was rector of one of the few world-class academic institutions left in Russia today: the New Economic School. Guriev was a loyal, liberal adviser to former President Dmitri Medvedev, but after he co-authored a report that criticized the conviction of Mikhail Khodorkovsky, the imprisoned oil magnate, Putin’s goons began to harass him. He said they even demanded his e-mails going back five years. (Snowden beware.) Well, in the spring, Guriev fled to France, saying he feared losing his freedom, and he says he’s not going back.
“Sergei Guriev, come to America. Bring your friends. Bring the members of that band Putin put in jail, Pussy Riot, too. No creative person has any future in Putin’s Russia because he doesn’t understand the present: There are no ‘developed’ and ‘developing’ countries anymore. There are only H.I.E.’s (high imagination-enabling countries) and L.I.E.’s (low imagination-enabling countries). That is, countries that nurture innovation and innovators and those that don’t — in a world where so many more people can turn ideas into products, services, companies and jobs faster and cheaper than ever. Putin is building a political monoculture that will make Russia the lowest of low imagination-enabling countries.
“Putin prefers to rely instead on less educated, xenophobic rural populations, who buy into his anti-American, anti-gay trope that the world just wants to keep Russia down. As the revolution in hydraulic fracturing, horizontal drilling and energy efficiency spreads around the world, and oil and gas prices fall, Putin’s failure to invest in Russia’s human talent — which he won’t do because it means empowering and freeing them from his grasp — will become a big problem for Russia.”
That’s what I would have said. Do we lose anything by not having Putin’s help? You bet. Those who say we don’t need Russia are wrong. There is no major problem in the world today — Syria, Afghanistan, Egypt, cybercrime, climate or drugs — that would not be easier to solve if the U.S. and Russia worked together. (It’s why I opposed NATO expansion.) But running against America is now essential to Putin’s domestic survival.
So there is no sense wasting more time with him. While he will not help us, he can’t do us serious harm. He can and is doing serious harm to Russia, by putting loyalty to him before competence. Any system that does that for long, dies.
You can Google it.