January 23, 2012

“11 stunning revelations from Larry Summers’s secret economics memo to Barack Obama”

James Pethokoukis looks at the 57-page Larry Summers memo Ryan Lizza used for his New Yorker piece on policymaking in the Obama White House and comes away with a few revelations. Which are, he says, stunning. And are as follows:

1. The stimulus was about implementing the Obama agenda.
2. Team Obama knows these deficits are dangerous (although it has offered no long-term plan to deal with them).
3. Obamanomics was pricier than advertised.
4. Even Washington can only spend so much money so fast.
5. Liberals can complain about the stimulus having too many tax cuts, but even Team Obama thought more spending was unrealistic.
6. Team Obama wanted to use courts to force massive mortgage principal writedowns.
7. Team Obama thought a stimulus plan of more than $1 trillion would spook financial markets and send interest rates climbing.
8. Greg Mankiw, economic adviser to Mitt Romney, was dubious about the stimulus.
9. But the Fed was a stimulus enabler.
10. IPAB was there at the very beginning.
11. The financial crisis wasn’t just Wall Street’s fault.

Pethokoukis excerpts bits from Summers’ memo to support each point. Whereas I’m going to provide my own glosses without having read the memo. They are as follows:

1. No shit.
2. Not worrying about how to deal with them frees you up to create them.
3. Of course it was. Obama lied. Which is not surprising. It’s one of the things he’s best at.
4. But they’re willing to try harder!
5. That’s because they weren’t doing it correctly. Hence the need to add more spenders by increasing the size of the bureaucracies and administrative state.
6. Translation: politicize the courts, institute a shell game using “social justice” and “fairness” as the rationale.
7. Perception is what’s most important. Do only what you think you can realistically get away with until such time as you need to go all in.
8. And yet Romney supported it. Which tells you all you need to know about Romney the corporatist.
9. Ron Paul for President!
10. Sarah Palin for President!
11. No shit. But it wasn’t the failure of regulators to use powers they already had, as Summers would have you believe, so much as it was the relationships regulators had formed with those they regulated. Lots of people got rich in the process of weakening our financial markets, our housing market, and our currency.

Or, to sum up, no shit.

(thanks to a fine scotch and JHo)

Posted by Jeff G. @ 4:26pm

Comments (23)

  1. sherlock belongs up there at the end

  2. Why is this shithead still president?

  3. the Fed

    There everybody goes about teh monies again. Racists.

  4. The thing about the whole fiasco that gets me the most, both in horror that it happened and amazement at how easily it was accepted, is how that $800,000,000 became a part of baseline budgeting. That one time stimulus is now factored into every annual budget going forward. Assuming the bastards even bothered submitting a budget that is.

    I guess once the establishment grew comfortable with voting themselves a higher credit limit at will and whimsy, what the hell…

  5. 8. Greg Mankiw, economic adviser to Mitt Romney, was dubious about the stimulus.

    Mankiw is a very nice man, much nicer than Paul Krugman, Noble Jeenyus.

    “It’s almost worth the Great Depression to learn how little our big men know.”
    – Will Rogers

  6. Well Lee,
    I guess they decided if they were going for a con-job, they might as well go all in for the big sting; and hasten the collapse of the system from within. All done, of course, for the children and underprivaleged minorities…

    They invented a new kind of political ju-jitsu, by combining Alinsky and Cloward-Piven theory; Marx-Fu, Baracky style.

  7. But it wasn’t the failure of regulators to use powers they already had, as Summers would have you believe…

    To be fair, they were very busy watching pron.

  8. They are still lying about #11; how else could Franklin Raines not be included in the indictments.

  9. That memo will be important in the general election. It is not a big surprise, but it is a confirmation.

  10. hoo ray

    1,000 Days

    Tomorrow will be the 1,000th day since Senate Democrats last passed a budget. The Democrats’ fecklessness is not only irresponsible, it violates federal law. But the Democrats don’t care: they simply can’t allow the American people to see, in black and white, their plans for spending and taxes.

    Since the Democrats last passed a budget, just three months into the Obama administration, the federal government has spent $9.4 trillion and added $4.1 trillion to the national debt. The current fiscal year will be the fourth in a row in which the Obama administration racks up a $1 trillion-plus deficit.

    In other news today, Obama announced that he will not meet the statutory deadline to submit his budget to Congress–again. Of course, no one is holding his breath awaiting the president’s budget proposal. Obama’s last budget was so fiscally irresponsible that it was voted down in the Senate, 97-0. Not a single Democrat supported it.

    Democrats like Dick Durbin and Nancy Pelosi have tried to blame their dereliction of duty on the Republicans, claiming that it would be futile to propose a budget since the Republicans would filibuster it. As usual, the Democrats rely on ignorance: under the Congressional Budget Act of 1974, budgets pass the Senate by a simple majority and cannot be filibustered.


  11. $800,000,000

    Sadly, you need three more zeroes to get your $800 Billion of stimulus (now baseline) Lee.

  12. 2. Mueller posted on1/23 @ 4:35 pm
    Why is this shithead still president?

    Because, unfortunately for us, being an ignoranus (not a misspelling) is not an impeachable offense.

  13. Say what you will about Jen Rubin, but she’s tearing Newt supporter Lee Habib a new one on Hewitt right now. She’s making awesome arguments against Newt, all of them based on his actual record. Habib is basically spewing contempt.

  14. “but she’s tearing Newt supporter Lee Habib a new one on Hewitt right now.”

    hugh’s gotta garage full of “mormon in the white house” to sell.

  15. That’s a bit like shooting fish in a barrel, di.

  16. Wow! We’ve gone the entire Kennedy portion of the Kennedy/Johnson term.

    Maybe we could parade the entire Democrat leadership past Daly Plaza in celebration.

  17. Seen, I’d say that was a gross oversight by the Founding Fathers.

  18. Swen.

    Damn you, auto-correct.

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  20. You forgot #12 “Bitches be craaaaazy.”

  21. Summers is a sexist. And a racist.

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