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Summers Out

[ Posted Monday, September 16th, 2013 – 17:55 PDT ]

This isn't a changing-of-the-seasons article, it is in fact an article marking the withdrawal of Larry Summers for nomination to the head job at the Federal Reserve. I suppose I could have made it both, but then I would have had to title it "Summer's Out: Summers Out" which somehow just seems even more confusing. All kidding aside, though; liberals, lefties, progressives, and populists alike are heaving a giant sigh of relief at this news. Larry Summers has now realized he very well could lose a Senate confirmation vote and so he decided instead to take his name out of consideration for the appointment.

Two recent "anniversary" news stories seem particularly relevant here. The first is the five-year anniversary of the collapse of Lehman Brothers, a giant trigger for the financial meltdown on Wall Street and all that followed. The second is the two-year anniversary of Occupy Wall Street.

For five years now, we as a country have been struggling with Wall Street's post-Lehman collapse. This is relevant because of the role Larry Summers played in the Clinton administration (where he eventually wound up as Treasury Secretary). In 1999, Summers praised the repeal of the Glass-Steagall Act, predicting that removing the wall between commercial and investment banking would usher in a new, modern future for Wall Street in the new century. He testified before Congress that the derivatives market was in no need of any regulation. He sided with Alan Greenspan and Ken Lay (of Enron) in laying the blame for the "energy crisis" in California on the Democratic governor (who was later recalled and replaced by Arnold Schwarzenegger), instead of on the Enron pirates (where it belonged).

During the Bush years, Summers went back to school, where he enraged women at Harvard by suggesting that the fairer sex were different in aptitude than men in the science and engineering fields.

In the Obama administration, Summers returned to White House service, where he began by immediately arguing what could easily be called "the Republican position" on what to include in the stimulus package. More liberal members of Obama's team wanted more infrastructure spending, but Summers pushed tax cuts over such spending. He was also instrumental in refusing to consider a larger stimulus than what eventually passed Congress.

That's just the Reader's Digest version of Larry's career. There are other episodes which raise concerns and questions for liberals as well, but these seem the most relevant to why some Senate Democrats weren't exactly cheering on his nomination as Fed chair.

Make no mistake about it -- Summers withdrew because he was facing an embarrassing defeat not only in the Senate as a whole but also in the committee which would first vote on his nomination. Five Democratic senators have reportedly said they'd vote against Summers, meaning Republican votes would have been required even to get his nomination successfully out of committee. Which spelled doom for his overall chances.

One of those senators indicating a "no" vote was none other than Elizabeth Warren. Summers reportedly wasn't exactly a big White House champion of the idea of Warren heading the Consumer Financial Protection Bureau (whose very idea had been Warren's in the first place). Denied this job, Warren went out and found other work -- taking Ted Kennedy's Senate seat back for Democrats and ousting Scott Brown. Which is how she finds herself on the very committee who would be tasked with vetting Summers.

This is, no doubt, ironic. Or maybe "karmic" (take your choice). Two years ago, the American public had never heard the terms "the 99 percent" or "the 1 percent" used politically. Nobody was talking about crushing student loan debt. As long as Wall Street got back on its feet, things would be said to have "gotten back to normal," no matter what that "new normal" would have meant for Main Street. Occupy Wall Street was about to change all of that. Elizabeth Warren rode this populist wave to victory in Massachusetts, arguably the biggest political victory to date for the Occupy movement. I'm surprised I haven't seen her snarkily referred to as "Sen. Elizabeth Warren (D-Occupy)," but then I'll freely admit I don't usually frequent web sites that might find such a description amusing.

Of course, to be brutally honest, Occupy Wall Street (and all of its spinoff Occupy locations) didn't directly accomplish much in the way of concrete goals, beyond the boundaries of the park it existed in. The "from the bottom up" organization learned some brutal lessons about the difference between sloganeering and actual governing. Their "General Assembly" model made everyone feel great about how people-powered the movement was, but the insanely high bar they set for Occupy's official acceptance of any proposal and (as a direct result) the absolute failure to come up with any agreed-upon agenda showed the limits of their chosen internal governing framework. What the General Assembly did, in essence, was multiply enormously the worst aspects of both the filibuster and the tyranny of the minority which the United States Senate now routinely experiences. Occupy's biggest failure, though, was in not effectively liaising with the mainstream media -- which they could have used to much greater effect if a few go-to spokespersons had emerged as the media voice of the Occupy movement. Their insistence upon having no leaders in the end meant they were seen as too chaotic to be effective on the national political stage (again, within the boundaries of their occupied park they did have much more success in organizing things).

And yet... and yet... even after pointing out how Occupy fell short and how a little agreed-upon focus might have prolonged the movement and allowed it to grow strong, Occupy did succeed spectacularly at their basic goal: changing the American conversation about the economy. Occupy Wall Street had some rather nebulous and intangible goals, which could be why their biggest marks upon history are also fuzzily intangible. After all, would Mitt Romney's "47 percent" comments have resonated with the force they did within the electorate if the "99 percent / 1 percent" framework hadn't already been in place? Many politics-watchers point to that one recording as the turning point in the whole election, in fact. Whatever its influence, it is impossible to argue that the public would have reacted in exactly the same way if Occupy Wall Street had never happened.

Another indication of how the conversation has radically shifted post-Occupy is that Barack Obama successfully got Republicans in Congress to vote to raise taxes on the wealthy. For the first time in two decades. While liberals grumbled about the details, the basic fact remains: Republicans voted to raise taxes on the rich. This stunning achievement would have been a lot harder (if not impossible) if the national conversation on economics hadn't shifted to spotlighting the "1 percent."

The conversation in America did indeed change because of Occupy Wall Street. Elizabeth Warren now sits not only in the Senate but on the banking committee. Some even suggest she may be thinking about a presidential run in 2016 or later. If she does, we might just see what a Democratic Populist campaign looks like. Bill Clinton and Barack Obama both made no secret about how much they crave Wall Street's approval, but wouldn't it be refreshing to see a Democratic candidate who didn't care and who in fact welcomed Wall Street's opposition?

That's all far in the future, though. But I do find it appropriate that two years after Occupy Wall Street exploded on the American consciousness, Larry Summers withdrew his name from consideration for the most powerful economic position in the federal government -- largely because his fellow Democrats see him as being too close to Wall Street and too unconcerned with Main Street. The frontrunner for the position now is seen as being much more concerned with getting the unemployment rate down than Summers ever would have been as Fed chair. That's a tangible victory for liberals, who indeed were overjoyed at the news of Summers withdrawing. Occupy Wall Street didn't directly make this happen, just as they didn't directly get Elizabeth Warren elected -- two years later, they are seen as nothing but a footnote in the history of political protest by some -- but they did indeed change the conversation in America over economic fairness to such a degree that these events were even possible in the first place.

-- Chris Weigant

 

Cross-posted at The Huffington Post

Follow Chris on Twitter: @ChrisWeigant

 

15 Comments on “Summers Out”

  1. [1] 
    Elizabeth Miller wrote:

    With the withdrawal of Larry Summers, President Obama's second choice for Fed Chairman, my hopes are being raised once again that another former Secretary of the Treasury will finally accept the job.

    Surely he must be near finished his memoir by now or will be January - an advance copy of which I believe I have well earned, ahem - and will happily reconsider extending his public service career despite working for an ungrateful public.

  2. [2] 
    Elizabeth Miller wrote:

    With the withdrawal of Larry Summers, President Obama's second choice for Fed Chairman, my hopes are being raised once again that another former Secretary of the Treasury will finally accept the job.

    Secretary Geithner must surely be near finished his memoir by now or will be by January - an advance copy of which I believe I have well earned, ahem - and will, with any luck, happily reconsider extending his public service career despite working for an ungrateful public.

  3. [3] 
    Chris Weigant wrote:

    LizM -

    Give it up. Geithner's repeatedly said he's not interested. You are correct, he probably was choice #1, but he's turned it down over and over again.

    Give up the dream. It ain't gonna happen...

    :-)

    -CW

  4. [4] 
    Michale wrote:

    Of course, to be brutally honest, Occupy Wall Street (and all of its spinoff Occupy locations) didn't directly accomplish much in the way of concrete goals, beyond the boundaries of the park it existed in. The "from the bottom up" organization learned some brutal lessons about the difference between sloganeering and actual governing.

    I would say that the biggest reason the OOzers didn't accomplish much is because they couldn't keep the more violent members of the group under control...

  5. [5] 
    TheStig wrote:

    CW-

    I like your title, but I submit....

    "Schools out for Summers"

    Or

    Everyone's Screamin' for Yellen

    Has a nice Rockey and Bullwinkle ring to it!

  6. [6] 
    TheStig wrote:

    If the period 1870-1900 was the Gilded Age, than I submit we are living in a Solid Gold Age. The wealthy have never been wealthier nor more securely in control.

  7. [7] 
    Michale wrote:

    The wealthy have never been wealthier nor more securely in control.

    And here I thought we elected Obama and the Democrats to STOP that from happening!!!

    What gives?!?

  8. [8] 
    Elizabeth Miller wrote:

    Chris,

    I don't really believe Geithner will end up at the Fed. Besides, I don't want anything to interfere with finishing up his book about the financial crisis.

    It is a shame, though. I don't believe there is anyone out there more qualified than Geithner, any way you slice it, or a more appropriate pick.

    Obama probably didn't try hard enough. That's my guess, anyway. :)

  9. [9] 
    nypoet22 wrote:

    Bill Clinton and Barack Obama both made no secret about how much they crave Wall Street's approval, but wouldn't it be refreshing to see a Democratic candidate who didn't care and who in fact welcomed Wall Street's opposition?

    it would be refreshing, but very unlikely to succeed. as michale pointed out, many on the left fervently hoped that obama would skew populist, based on the content of some of his speeches. but that wasn't the case, was it? money is just too entrenched in the political process for anyone to make it to the highest levels of government without clearing wall street approval first.

    JL

  10. [10] 
    Michale wrote:

    as michale pointed out, many on the left fervently hoped that obama would skew populist, based on the content of some of his speeches. but that wasn't the case, was it?

    "Could you say that again in my GOOD ear?"
    -Jim Carrey, ACE VENTURA: PET DETECTIVE

    :D

  11. [11] 
    Michale wrote:

    If the period 1870-1900 was the Gilded Age, than I submit we are living in a Solid Gold Age.

    Visions of Solid Gold Dancers keep flashing thru my brain.. :D

  12. [12] 
    Chris Weigant wrote:

    Michale [4] -

    While I agree in general that "policing your own ranks" is an important aspect of any movement or protest, I have to disagree on your larger point. Because it was just one more symptom of the larger problems of organization that OWS created for itself.

    TheStig [5] -

    I have been rolling the whole "Yellin' for Yellen" thing around, but so far it just seems a little trite...

    [6] -

    How about the Golden Oldie Age?

    Heh.

    nypoet22 -

    Sadly, you may be right. See: Dennis Kucinich, among others.

    Michale [11] -

    OK, I knew there was something about it that rang a bell. "Solid Gold Dancers" was what I was trying to think of, you are right...

    :-)

    -CW

  13. [13] 
    Michale wrote:

    OK, I knew there was something about it that rang a bell. "Solid Gold Dancers" was what I was trying to think of, you are right...

    Yea, we just dated ourselves... :D

  14. [14] 
    Michale wrote:

    Yea, we just dated ourselves... :D

    Which IS legal in the state of Alabama, don'tcha know... :D

  15. [15] 
    Chris Weigant wrote:

    Michale -

    OK, now that was funny!

    Credit where credit is due...

    :-)

    -CW

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