Barack Obama has a team of very smart people helping him address the current economic crisis. So we should be fine.
That would be true, more or less, if they were simply free to do what in their best judgment was good for the economic health of the nation. But they are not. Political considerations at both ends of Pennsylvania Avenue distort the goals, and compromise the policy. The resulting legislation becomes what David Brooks in his column today calls "a sprawling, undisciplined smorgasbord" ("Cleaner and Faster," New York Times, January 29, 2009).
Larry Summers has the most to lose in this legislative circus. He is the President's chief economic adviser, and he made a very public case in 2008 for a disciplined and surgically targeted stimulus for the economy. His criteria, Brooks tells us, were these:
First, the stimulus should be timely. The money should go out “almost immediately.” Second, it should be targeted. It should help low- and middle-income people. Third, it should be temporary. Stimulus measures should not raise the deficits “beyond a short horizon of a year or at most two.”Departure from these strictures, Summers warned, could produce "worse side effects than the disease that is to be cured.” Read Brooks's column for the ways this proposed stimulus package despises every one of Summers' warnings.
Alice Rivlin, budget director under President Clinton, told Congress this week, “A long-term investment program should not be put together hastily and lumped in with the anti-recession package. The elements of the investment program must be carefully planned and will not create many jobs right away.” So Rivlin has shown that she knows what's fatally and obviously wrong with this plan of action, and as such stands in public contrast with her former associate in the Clinton administration.
I am told that, wherever he goes, Larry Summers is viewed as the smartest man in the room. This is no doubt why Obama has brought this Harvard economist on board as Director of the National Economic Council. This bill, however, as fundamental to Obama's presidency as Reagan's 1981 tax cut bill was to his, leaves Summers standing off at the side with his firm counsel ignored. It leaves him covered with shame.
This situation brings to mind the worldly wise Ahithophel in the Bible whom the handsome and ambitious young Absalom brought into his council of advisers.
Now in those days the counsel that Ahithophel gave was as though one consulted the word of God; so was all the counsel of Ahithophel esteemed, both by David and by Absalom (2 Samuel 16:23 ESV).
From what I gather, Summers sees his own advice in those terms and expects others to do the same. Absalom's life-and-death challenge at start of his reign was not an economic crisis but his father David whom he had displaced from the throne. Of course, Ahithophel recommended precisely the right course of action that would have put an end to David, but Absalom followed the advice of others. Ahithophel, seeing that he was put to utter shame, did not wait for the miserable outcome.
When Ahithophel saw that his counsel was not followed, he saddled his donkey and went off home to his own city. He set his house in order and hanged himself... (2 Samuel 17:23).
As it stands, the bill is a self-defeating mixture of immediate economic stimulus and long-term domestic agenda funding. Larry Summers should threaten to resign if President Obama does not move right away to put an end to this legislative monster, this pushmepullyou response to our continuing economic slide into catastrophe.
Obama needs Summers more than Summers needs Obama. The President should especially wish to avoid someone of Larry Summers' stature resigning in protest, and just two weeks into the administration. If our young President hasn't the good judgment to take this step, Summers should quietly force his hand.