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Home Publications Blogs Beat the Press NYT: Larry Summers Already Costing Jobs

NYT: Larry Summers Already Costing Jobs

Tuesday, 03 September 2013 04:19

Even before he has been officially designated as President Obama's pick to be Fed chair, Summers is already slowing the economy and costing jobs according to the New York Times. This remarkable possibility is due to the fact that investors do not see Summers being as committed to maintaining an easy money policy as the current Chair Ben Bernanke or his main rival Janet Yellen. The result is that interest rates are higher now in expectation of future rises. This is of course speculative, but it is nonetheless an interesting hypothesis.

It is also worth noting that all the reports that President Obama has decided to pick Summers are based on anonymous sources. This is likely part of a campaign to push Summers' candidacy, since opponents will be less motivated to act against Summers if they believe the decision has already been made. As long as no one has gone on record identifying Summers as the pick there is zero cost to Obama making a different selection. Only the reporters would look foolish.

Comments (3)Add Comment
written by Last Mover, September 03, 2013 7:01

Don't neglect the upside. Cat food sales are up. The middle class has expectations about Summers as well you know.
Once more
written by D12345, September 03, 2013 11:10
This site is invaluable. The one major shortcoming is that it is entirely
reactive. That is, DB waits for the TImes or Post to print something and then
shows what is inaccurate or wrong.

But what about the issues they don't cover? How many 1s and 0s have been devoted to the Fed chairman? In contrast, what about the dead silence of the TPP "negotiations."
TPP has the potential to devastate workers' rights, environmental safety, intellectual property rights, etc. It is a major step in establishing the mega corporations as the ultimate authority.

Do you have to wait for the Times to write about it?

Omission can be as critical as comission.

Why does Krugman write endless columns on the implementation of
ACA and the character of the Republican party...both very far from his
areas of expertise, and not a word on this vital "trade" agreement.

As we know, it is a lot more than trade

We need you, Dean!
Fed up!
written by A Populist, September 04, 2013 12:51
Apparently, Krugman, Romer, and others, seem to believe that "inflation expectations" are a powerful tool - even in our present economic situation.

However (as you have pointed out) consumers savings rates are already unsustainably low, with terribly low retirement savings, etc. And on the investment side - current consumption is already being well-supplied. Investment isn't needed, unless consumption or stimulus increases - *sustainably*.

It seems to me, that PK seems to be overplaying the power of the Fed in our present circumstance. I am concerned that this growing consensus of the "all powerful Fed" to get us out of this hole, is a terrible distraction and potential delay, to getting the fiscal and wage solutions which could really make a difference.

Even if such solutions are presently politically impossible, is it not better to admit that, emphasize how bad things really are, and motivate for real change via the next midterms?

Advocating for very weak measures, distracts, delays, and damages credibility, making things that much harder down the road.

Am I wrong?

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.