In his bid to consolidate support within the Democratic coalition, Joe Biden keeps signaling that he’ll govern as a progressive. In an interview with Politico published on Saturday, Biden declared that the $2 trillion spent so far on stimulus needs to be a “a hell of a lot bigger.” According to Politico’s Michael Grunwald, Biden sounded like Elizabeth Warren and Bernie Sanders in calling for “much stricter oversight of the Trump administration, much tougher conditions on business bailouts and long-term investments in infrastructure and climate that have so far been largely absent from congressional debates.”
“I think there’s going to be a willingness to fix some of the institutional inequities that have existed for a long time,” Biden told Grunwald. “Milton Friedman isn’t running the show anymore.”
These are welcome words to anyone who believes recession-wracked America needs a massive injection of Keynesian spending, ideally structured around a Green New Deal to help tackle climate change. But can Biden be trusted to keep his word? After all, his own long record as a Wall Street–friendly centrist makes it hard to credit his newfound economic populism.
Further, some of Biden’s top advisers are anathema to progressives. As Grunwald notes, “This week, Biden has taken flak from the left for including the corporate-friendly Democratic economist Lawrence Summers on internal calls.”
Larry Summers, a Harvard economist who held senior posts under both Bill Clinton and Barack Obama, has a record that is even more dismaying than Biden’s. Going back decades, Summers has opposed big stimulus spending, regulation of Wall Street, and pushes for economic equality.
There are two main objections to Summers: his personality and his politics. He has a well-documented history of being an overbearing boss, a know-it-all with a habit of publicly humiliating his underlings and colleagues. Christina Romer, who served as chairwoman of the Council of Economic Advisers in the Obama administration, complained that Summers treated her like “a piece of meat.”
Summers’s stormy tenure as president of Harvard University from 2001 to 2006 was cut short by a faculty revolt, motivated by his browbeating of African American professors such as Cornel West, his claim that women weren’t doing well in the sciences because of innate cognitive inferiority in their math skills, and his support of a protégé who had run roughshod over conflict-of-interest regulations while running an economic reform program in Russia. (In recent years, a fresh controversy has emerged from Summers’s tenure as Harvard president involving donations from the notorious child molester Jeffrey Epstein).
As appalling as Summers might be on a personal level, his politics are even worse. Joe Biden might be ready to bid adieu to the era of Milton Friedman, the right-wing economist who was one of the major architects of neoliberalism, but Larry Summers most definitely is not.
In a 2006 New York Times opinion piece written on the occasion of Friedman’s death, Summers wrote, “I feel that I have lost a hero—a man whose success demonstrates that great ideas convincingly advanced can change the lives of people around the world.” Making a small demurral over Friedman’s lack of concern for social justice, Summers aligned himself with the neoliberal thinker’s worldview. “Not so long ago, we were all Keynesians,” Summers wrote. “Equally, any honest Democrat will admit that we are now all Friedmanites.”
Summers was not merely being polite out of respect for a recently departed eminence. Rather, he was being candid in describing himself as a Friedmanite Democrat, someone who belongs to a left-of-center party but constantly tugs it to the right.
Summers’s Friedmanite politics can be seen in virtually everything he’s done in public life. During the Clinton administration, he opposed the efforts of Asian countries to impose capital controls during the economic crisis of 1997. He also pushed for the repeal of the Glass-Steagall Act, a deregulatory move that allowed commercial banks to run hog wild with risky investments, a major factor in the 2008 economic crash.
As Michael Hirsh noted in National Journal in 2013:
As a government official, [Summers] helped author a series of ultimately disastrous or wrongheaded policies, from his big deregulatory moves as a Clinton administration apparatchik to his too-tepid response to the Great Recession as Obama’s chief economic adviser. Summers pushed a stimulus that was too meek, and, along with his chief ally, Treasury Secretary Timothy Geithner, he helped to ensure that millions of desperate mortgage-holders would stay underwater by failing to support a ‘cramdown’ that would have allowed federal bankruptcy judges to have banks reduce mortgage balances, cut interest rates, and lengthen the terms of loans.
According to Robert Kuttner, co-editor of The American Prospect, Hirch paid a price for documenting Summers’s history. Kuttner claims that “after Summers personally complained to David Bradley, then the publisher of Atlantic Media, which owned National Journal, Hirsh was advised to seek other work—he ended up moving to Politico and then to Foreign Policy, though no errors were ever found in the Summers piece and no correction was ever issued.”
Underlying all of Summers’s actions is a firm belief in the fundamental rightness of the existing economic order and the enormous inequality it produces. During the early days of the Obama administration, Summers told a reporter, “One of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way that they’re supposed to be treated.” Summers opposes a wealth tax. In October 2019, he made the strange argument that “if the wealth tax had been in place a century ago, we would have had more anti-Semitism from Henry Ford and a smaller Ford Foundation today.” In fact, Henry Ford spent lavishly on anti-Semitism. Nor did Ford’s philanthropy make up for his bigotry. The two sometimes went hand in hand, as with the Ford Foundation’s support of eugenics in the early 20th century.
When Barack Obama floated the idea of nominating Summers to be chairman of the Federal Reserve in 2013, the move was opposed not just by progressive senators like Elizabeth Warren and Sherrod Brown but also by their moderate colleagues like Jon Tester and Heidi Heitkamp. Summers was simply too tainted.
If Joe Biden wants to prove his bona fides to progressives, he’ll have to cut his ties to Larry Summers.