Monday, December 28, 2020
The whole piece reads like an extended New Yorker cartoon, in which an evictee with empty pockets is about to dive after a rotten apple core in a dumpster, only to be blocked by a cauldron-bellied Harvard economist in a $3000 Zegna suit. Caption: “Actually, total household income relative to the economy’s potential sits at abnormally high levels.”
There are of course different positions one could take on the question of stimulus checks, but the issue with people like Summers is the utter predictability of their stances. Summers belongs to a club of neoliberal thinkers who’ve dominated American policy for decades. From Bob Rubin to Tim Geithner to Jason Furman to Michael Froman and beyond, the people one friend jokingly refers to as the “Rubino Crime Family” are all basically the same person, affectless technocrats who play up reputations as giant-brained intellectuals — I always imagine them with bulbous Alien Nation heads — while reveling in cold, hard truths about the limits of government assistance.
Of course, these same people often believe in jaw-droppingly enormous levels of public aid. Think of the $20 billion in taxpayer funds that went to rescue currency traders in 1995 (presented in the media as a bailout of “Mexico”), the massive IMF bailouts of Asia and Russia in the late nineties, and especially the multi-trillion-dollar Fed-fueled rescues of the finance sector both after 2008, and now (“We’re not going to run out of ammunition,” explained Fed chief Jerome Powell). Other examples include giving companies like Goldman, Sachs 100 cents on the dollar on debts owed them by AIG in that bailout, or the $3.625 billion private intervention to save one crackpot hedge fund called Long Term Capital Management in 1998.
I don't agree with much of this, but it's still fun to listen to Prof. Summers get pilloried.