David R. Henderson  

How Good is Larry Summers' Judgment?

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Many economists, including me, think that Larry Summers is quite bright. But how good is his judgment? In my most recent Forbes.com article, "Larry Summers' Judgment," I address this issue. I highlight two things:

1. His 1982 prediction, co-authored with Paul Krugman, that the inflation rate would rise by five percentage points. It actually rose by no more than 1.5 percentage points.
2. His supporting in 1992, when the unemployment rate was 7.4 percent, a major cut in the U.S. budget deficit versus his support now, when the unemployment rate is 6.5 percent, for a substantial increase in the budget deficit.


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COMMENTS (7 to date)
Les writes:

Knowing Obama's economic proposals, I'm very surprised that Summers accepted the appointment.

It seems to me that he'll soon have to sacrifice either his integrity or else his position in the new administration. The apparent conflict of interest seems absolutely irreconcilable.

simone writes:

Summers may be bright but his judgment is poor. Many say he is bright, I have not experienced a reason to accept the assertion. I can question his judgment and it looks poor.

Greg Ransom writes:

In the land of the "idiot savants" and "rocket scientists" all that matters is that you are "the smartest man in the room", meaning you can out think anyone in the room when it comes to the latest "models" and you can out publish anyone in the room in terms of new applications of the fashionable mathematical apparatus of the moment.

Don't bother the rest of us with the question of whether or not these guys actually understand the real world well enough to anticipate what is likely to happen or what the good policy might suggest.

Being an idiot savant means you know "economics" according the top graduate schools in the country (its a tautological definition of course for these folks). And the rest of us are suppose to bow to the thrown of the naked emperors.

Being an "economists" means never having to question your explanatory strategy or your picture of science, even when economists of the caliber of Hayek and Coase have explained why so much of what economist do turns out to be pseudoscience and black board math created in an attempt to imitate real science and make the "he's smart" game easy to grade.

Is Larry Summers even "smart" in the larger sense in which Hayek and Coase were smart, having deep wisdom and understanding of economic phenomena based on either deep learning or a close study of particulars? Where's the evidence for that?

bgc writes:

My main worry about Summers is that he may lack strength of character.

When the fuss blew up at Harvard about Summers comments on women in science (comments which were well researched, probably true, and in any case entirely mainstream evolutionary psychology) - and he was unjustly criticized - Summers almost immediately caved in and groveled to his critics with an abject apology and promise to make amends (I don't think that groveling is too strong a word, here).

The groveling eventually included a pay-off of 50 million dollars to a kind of task force to investigate imaginary sexism in science - the head of this task force shortly replaced Summers as President of Harvard.

Summers rapid and complete capitulation to critics made it impossible to defend him, since Summers so rapidly 'admitted' he was in the wrong (when he was *not* wrong in any way). If he had not apologized I know that Summers would have had some very eminent people rallying to defend him, but due to his groveling they could not do anything.

Maybe Summers learned from his error in apologizing? But this looks to me like evidence of a deep character flaw in a politician or a manager.

(By contrast, lack of guts is not really much of a flaw in an academic - indeed it can be professionally useful. Except, of course, at the very highest level of genius revolutionary scientist whose work redirects their subject. Obviously Summers is not a revolutionary economist: he is simply a very good mainstream professional economist).

Wayne Marr writes:

David, good column. I was in Washington around the same time with Summers in the 80s...Needless to say, I found your conclusions 'reasonable.'

wayne

Steve Sailer writes:

Larry cost Harvard tens of millions of dollars in legal fees and a $26 million fine by defending his best friend Andrei Shleifer instead of settling on federal corruption charges going back to Shleifer's behavior in Russia in the 1990s while working on a federal contract under Larry's supervision.

dearieme writes:

"It seems to me that he'll soon have to sacrifice either his integrity or else his position in the new administration." His "integrity" - you are a wag.

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