“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)