David R. Henderson  

"The President Believes"

PRINT
Macroeconometrics: The Lost H... Does Gravity Kill?...

In a recent post I wrote about Larry Summers:

I doubt that he likes the awful [stimulus] bill, but what I'm pretty sure of is that he likes being on the inside.

One commenter, Charlie, wrote:

it's amazing how both sides of the profession think the other is being disingenious [sic].

Charlie missed my point. I'm not sure if Larry is being disingenuous. What I'm pretty sure of, which is why I wrote my original statement, is that he probably doesn't much like the "stimulus" bill. Notice that I used the word "doubt," rather than claiming that I know. I haven't talked to Larry since 1993 or 1994. How could I claim to know what he thinks?

In response to Charlie, I wrote:

Have you noticed that we haven't heard any strong endorsement of the bill by Summers? The standard way a political appointee deals with the situation when he/she doesn't like what his/her boss is doing is to be quiet or, if asked his/her opinion, to say, "the President believes."

Responding to me, Charlie wrote:

I don't recall seeing the "the president believes quotes" from Romer and Summers either.

Take a look at the transcript of Larry Summers's appearance on "This Week" yesterday. Countless times, Larry talks about the President's wants and beliefs. When he states an opinion as his own, it's typically about the state of the economy, not the merits of the "stimulus" bill.

One sample:

There are crucial areas, support for higher education, that are things that are in the House bill that are very, very important to the president.

Another:

There are certain priorities -- education, health care, infrastructure investment -- that the president is certainly not going to want to lose sight of.

Comments and Sharing





COMMENTS (9 to date)
Mr. Econotarian writes:

Economists should be forced to take something along the lines of the Hippocratic Oath before receiving their degree. "Do no harm."

Doctors generally only kill one person at a time through malpractice. Economists can kill millions.

Bill writes:

I typically avoid these Sunday morning talking head shows like the plague. Yesterday morning, right after our local news, "This Weak" came on while I wasn't paying attention.

When I saw Larry Summers was going to on, it reminded me of the article you posted last week, so I decided to hear what he would say. When the first thing out of Summers' mouth was "the president feels that..." I laughed really hard and then changed the channel.

Good call.

Jason writes:

Larry on Fox News today:

But if you ask me, if I am comfortable with cutting taxes for middle- class families, yes. Am I comfortable with investing in our country's infrastructure? Yes. Am I comfortable with protecting state and local governments from the need to lay off teachers and lay off cops? Yes — yes, I am.

Am I comfortable with preparing to create a situation where every American has a computerized medical record? Yes, I am. Am I comfortable with more scholarships, so that kids are not disenfranchised for life from a chance to participate in this economy by not being able to afford to go to college? Yes, I am.


http://www.foxnews.com/story/0,2933,490264,00.html

Doesn't exactly sound like someone who is trying to hide behind "the President's" opinions...

Jason

jb writes:

The problem, Mr. Econotarian, is that even if they took that oath, I doubt they would change their practices. Economists, on the whole, are virulently certain that their economic "basket of opinions" is the one that will do the most good for the most people, in the long run.

Charlie writes:

David,

To be fair, this quote seems much harder for you to defend as not calling him disingenuous, "My own view is that Summers was an excellent economist who quit being an excellent economist some years ago." It seems unfair to ignore that in your response. You called him 'not an economist,' which is a huge slight in the profession. To me, you just called him a hack. Is there another way to interpret it?

Charlie

Charlie writes:

David,

I once saw Bryan post, (paraphrasing) "The book's greatest failure is that the author fails to look for evidence against his hypothesis." I wonder if he would say that about your post. Let's analyze the longer quote of the snippet you took. [My comments in brackets.]

SUMMERS: There's no question we need -- we need a large, forthright approach here. There are crucial areas, support for higher education, that are things that are in the House bill that are very, very important to the president.

[The last sentence you cut, but the first is Summers' opinion or he's lying. So he's for a large, forthright approach, but we don't know how he feels about higher education]

STEPHANOPOULOS: But will the Senate bill produce fewer jobs?

SUMMERS: There's no question -- no question what we've got to do is go after support for education. And there are huge problems facing state and local governments, and that could lead to a vicious cycle of layoffs, falling home values, lower property taxes, more layoffs. And we've got to prevent that.

[In this quote, he gives his on opinion, not the president's. He supports education and funding state and local gov'ts for stimulus purposes]

So we're going to have to try to come together in the conference. And the president is certainly going to be active in sharing his views as that process -- as that process...


[end quoting from interview]

In context, we get lots of info about Summers's opinion. None of it supports your hypothesis that Summers doesn't like the stimulus.

Charlie

David R. Henderson writes:

Dear Charlie,
Two comments.
1. I did not call Larry Summers "not an economist." Your own quote from me acknowledges that. I said he's no longer "an excellent economist." There's a whole lot of room between "not an economist" and "not an excellent economist." For the record, I think Larry is a good economist.
2. Of course, I agree with you that you can't determine from his language what Larry believes in or doesn't believe in. The only reason I gave the quotes from his ABC interview was to give evidence that he had kept referring to what the President wants. It was you who said you had never heard him say that. I took it from your earlier statement that evidence on this would matter to you. Apparently it doesn't.
David

Charlie writes:

-David

1. In response, I did make a leap there. Apologies. I guess my question, is still motivated by why is he no longer an excellent economist? I thought it was motivated by "he likes being on the inside" in the next sentence. Is it not? I guess, it seems that you are saying you think, "Summers and Romer are holding their nose and supporting the stimulus bill, which they think is bad, because they like being on the inside." Is that an unfair way to piece your statements together or is that something different than being disingenuous?

2. The quotes make clear that Larry is making statements about belief. The statement, "There's no question we need -- we need a large, forthright approach here." is a statement of Larry's belief. We still don't know what Larry believes, but we have lots of statements about what he says he believes. Do you think they are true?

Charlie

Charlie writes:

Jason posted an excellent link that I am just exploring to another Summers interview. The interview is much less focused on the president. The question remains can we hold these hypotheses at the same time:

1. Summers does not like the stimulus bill.

2. Summers is not necessarily disingenuous.

I put in bold the passages that I think give evidence that one of these hypotheses needs to be rejected.

LAWRENCE SUMMERS, CHIEF WHITE HOUSE ECONOMIC ADVISER: Glad to be with you, Stuart.

VARNEY: The president has used the expression "deepening disaster" and he's warned of "economic catastrophe." Those are his words, very strong words for a new president to use.

Do you think that this stimulus package will save us from economic catastrophe?

SUMMERS: I do.

Without this stimulus package, without an effort to backstop the economy, we are going to be caught in a vortex of declining employment, falling incomes, reduced spending, increased financial distress, less lending, reduced employment, reduced spending, and so forth.

This package...

VARNEY: Does it save us from a Great Depression?

SUMMERS: This package — this package, combined with a — the — a robust financial recovery program, of the kind that Tim Geithner — Secretary Geithner — is going to announce tomorrow, in my judgment, offer the best possible prospect of arresting the decline.

To be sure, there are enormous uncertainties. We are going to have to keep monitoring this economy. Problems that were not made in a month or a year are going to take a long time to fix. But what we know is that there are now millions of people who need work — 600,000 more in January alone — and that there is tremendously important work to do in our country: Creating a green economy, repairing schools, so that our kids have a decent chance to learn to compete in the 21st century, making our health care system work, and that it has to be the right thing to do to bring those without work together with work that badly needs to be done.

And that is what the president's program is all about.

VARNEY: Pass this stimulus — $900 billion, or whatever the final number is — and we have got a $2 trillion deficit this year.

Are you confident that we can ask — people will lend us that kind of money this year and next year and, on down the road, trillions of dollars? Are you confident that they will lend us that money, and that the damage done by that deficit will not outweigh any benefits of the stimulus package?

SUMMERS: It is a fair question.

But I am confident, Stuart. I look at the economy. I look at what has happened to long-term interest rates. Frankly, when you and I first got to know each other 15 years ago, we would have thought the idea that there would be a 3 percent 30-year bond rate would have been something that was unthinkable. There is a huge rush to quality that is leading people to buy U.S. government bonds.

But you're absolutely right that we cannot assume that this situation will prevail forever. And that is why the president has put emphasis in this package on measures that are temporary, that will lift this economy out of a rut, that are countercyclical in their impacts.

And that is why he has made it clear that, when he presents his budget, he is going to bring in the tough choices with respect to health care, with respect to Social Security...

VARNEY: You know...

SUMMERS: ... with respect to the growth of government spending that are necessary to put the nation's fisc on a sustainable basis.

VARNEY: Mr. Secretary, you know...

SUMMERS: But I will tell you this — yes.

VARNEY: But, you know, Mr. Secretary, Speaker Pelosi wants to put some spending into the Senate version, into the final bill. She wants to put it back in.

This — this is a political document. You are an economist. Are you really comfortable pushing such a highly politicized document, such a highly political piece of legislation through?

SUMMERS: Stuart, legislation is always political.

But if you ask me, if I am comfortable with cutting taxes for middle- class families, yes. Am I comfortable with investing in our country's infrastructure? Yes. Am I comfortable with protecting state and local governments from the need to lay off teachers and lay off cops? Yes — yes, I am.

Am I comfortable with preparing to create a situation where every American has a computerized medical record? Yes, I am. Am I comfortable with more scholarships, so that kids are not disenfranchised for life from a chance to participate in this economy by not being able to afford to go to college? Yes, I am.

Of course there's politics in a bill like this. Stuart, we both know that. But let's not let the fact that there is a political process in Washington blind us to what is happening across America...

VARNEY: OK, sir.

SUMMERS: Where those people are out of work, and there is work that needs to be done.


Comments for this entry have been closed
Return to top