Larry Summers: Obama’s Mike Brown
Obama has perhaps never recovered from handing his administration’s plum economic jobs to Robert Rubin protégés with dirty hands from the bubble — Lawrence Summers, a deregulation advocate from the Clinton administration, and Timothy Geithner, an indulgent regulator at the New York Fed. Their presence has helped Obama’s more unscrupulous adversaries get away with the lie that his White House, not President Bush’s, created TARP.
I think Rich is selling Summers short. Summers doesn’t just have dirty hands — he helped steward the Phil Gramm (R-TX)-led repeal of Glass-Steagall through Congress, then convinced Clinton to go along with it.
TAPPER: One of the things that President Obama is pushing for is regulation of derivatives, and also with a thing called the Volcker rule, he’s trying to separate commercial banking interests from investment banking interests. These were things that were the opposite policies of Treasury Security Rubin and Summers at that time, do you think in retrospect they gave you bad advice on these issues?
CLINTON: [...] yeah I think they were wrong and I think I was wrong to take it because the argument on derivatives was that these things are expensive and sophisticated and only a handful of investors will buy them and they don’t need any extra protection, and any extra transparency.
Thus, Larry Summers planted the seeds of the worst financial crisis since the Great Depression, which came as a result of repealing an important piece of the New Deal.
Now, forget how it looks, which is of course, terrible. Why was Summers allowed anywhere near government after that — let alone given an important post in a Democratic administration?
And Summers didn’t even clean up his own mess properly. He’s the one we have to thank for the stimulus being too modest.
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