Friday, September 6, 2013

Why to be skeptical of a Summers Fed nomination

Wonkblog on Larry Summers:
At Harvard, Summers gave an infamous speech about women in math and science that came across as suggesting, as he later acknowledged, that the leader of one of the world’s top universities didn’t think women were quite as talented in these fields as men. His defenders argued he was just trying to stir intellectual debate and was actually making a narrower statistical point, raising the question of whether women were less likely than men to produce the very best (and very worst) mathematicians and scientists. Summers concluded he engaged in an act of “ spectacular imprudence.”  
At the White House, he drove many colleagues crazy with endless debates. When he thought someone else had a bad argument, he’d declare, “You’ll get killed!” He made people think he favored nationalizing banks, when he didn’t. He wanted to shape not only economic policy but health care and energy. Some of his former colleagues say the style led to dysfunction. Christy Romer, former chairwoman of the Council of Economic Advisers, told me she’s not sure Summers has the “the managerial skills and personality to win over a large committee” that is the Fed.
Here's the thing, though: the problem with Summers isn't the things he says.  It's the things he's done, or, to be more exact, the lack of them.  This is a man who spent most of his adult life at the absolute pinnacle of American society, teaching at and subsequently running Harvard, serving as Treasury Secretary, and advising the president during the financial crisis.  He's had endless opportunities to distinguish himself as a public servant.  He hasn't.  He's been okay, but I can't think of a brilliant policy idea that anyone ascribed to Larry Summers.  He's come across as clever but never as particularly prescient, deeply insightful, or even, despite his penchant for iconoclasm, an especially novel thinker.  He's just a really smart dude who made good, with the help of a very successful family.

Would he be okay as Fed Chairman?  Yeah, sure, maybe.  But is there anything to recommend him over the many, many thousands of other smart dudes (or dudettes!) in America?

There's another thing about Summers, too.  The traits described in the Wonkblog post are those of someone enamored of his own intelligence.  He's not wrong, but that's still dangerous.  Larry Summers might be a bona fide genius, but the world has a knack for humbling geniuses.  Policy on a large scale is frequently beyond the comprehension of the smartest economist; intelligence becomes a weakness when it convinces someone that they're seeing more clearly than the rest of us.

Policymakers ought to start with the mantra "Everyone's stupid, and most of all me." Summers' seems to go something more like "Everyone's stupid.  But not me."

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