Tag: Larry Summers

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Ivysemitism, continued

Trump and Roy Cohn, 1983

I was twenty-five, fresh out of graduate school at the University of Chicago and had just finished a Master’s degree. I had my doubts whether I’d be up for the grind of getting a Ph.D. and decided to take a year and test out whether teaching English could finally be my profession. At twenty-five you really don’t know what you’re doing.

I got accepted into what is now called the University of Wisconsin–Stevens Point, formerly a teachers college in the remote middle of Wisconsin, and God it was cold there. Back then in 1959 the college was evolving into a more liberal arts institution and later became part of the UW system.

Anyhow, I joined the junior faculty and taught English to what were mostly rural and unsophisticated white kids. I was nervous and unsure in my first classes and had no idea how to communicate to these unspoiled, smiling children from another planet.

The McCarthy era had just passed but was still fouling the political air, certainly in my liberal circle. I’ve written before about how the Army-McCarthy hearings brought about my political exit from a Republican family that to some degree tolerated him.

Anyhow, in one of my first classroom recitals I called out the Senator as some kind of sick despot. The kids just sat there, but one guy, we can call him Jay, got up and announced that the class was no place for politicking and that basically I should keep my political opinions to myself.

I was taken aback and, after later talk with faculty friends, realized that maybe Jay was right. Political controversy was not welcome in that environment, and the Senator of course was from Wisconsin.

I saw some reference to him in the recent blaring discussions over the Ivy presidents and the GOP’s general anger over their waffling responses. Big Donor Bill Ackman has made much noise about firing the presidents and holding all those students protesting Israel to account. Larry Summers, a former Harvard president, agreed with him but said “asking for lists of names is the stuff of Joe McCarthy.”

We haven’t yet realized the depth of the Senator’s vicious pursuit of communists, but an attempt to bring down those hated liberal universities might be in the offing. One must remember that counselor Roy Cohn was the source of Joe McCarthy’s atrocities, just as he later became consigliere to Donald Trump. There is no honor among thieves.

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Politics Visits the Dismal Science

A lot of people, myself included, avoid serious dealing with economics. You hear their gurus make pronouncements clouded with jargon, impenetrable concepts, and fixed ideas. They frequently disagree and like to argue. Many disdain the world of politics, though that is a living part of economics.

Now Larry Summers, the king of controversy, has joined with Ezra Klein on his show in a long but surprisingly enlightening discussion about the present inflation, how it developed, and what to do about it. This may be intimidating to some of you, yet very illuminating if you choose to get into it.

The problem both of them confront is the heavy downside of the strong U.S. economy. Both seem to agree that Biden’s American Rescue Plan was needed and welcome. But “it ran the economy hot.” Notwithstanding obvious benefits to the labor market, Summers believes, our virulent inflation resulted. Planners seemingly ignored the long-term consequences of runaway demand.

And the doctor who prescribes you painkillers that make you feel good to which you become addicted is generous and compassionate, but ultimately is very damaging to you. And while the example is a bit melodramatic, the pursuit of excessively expansionary policies that ultimately lead to inflation, which reduces people’s purchasing power, and the need for sharply contractionary policies, which hurt the biggest victims, the most disadvantaged in the society, that’s not doing the people we care most about any favor. It’s, in fact, hurting them.

For Summers this echoes and replays what happened in 1982, when Paul Volcker came in and instituted draconian reforms that finally tamed record inflation, though at the cost of a recession. There was outrage among many of the lefties, but the medicine worked. Now, once again, demand is out of whack, meaning too much money chasing too few goods. Ezra Klein seemingly accepts this but asserts that supply disruptions have played a role too: Ukraine and China and Covid have had their effects.

I think they both agree that the Fed must act soon and strongly. There is really no other instrument to control what seems likely—a long-term inflation of some 6% a year. The politics of all this become pretty obvious. Politico tells us:

Democrats worry about growth-killing [Fed] rate hikes in the middle of a midterm election year. But inflation is even worse for them politically. Recent polls show that price spikes are by far the top concern among voters. An NPR/Ipsos survey showed that 40 percent of Americans are worried about higher prices and 94 percent are aware of rising costs for food, energy, housing and other items.

One aspect of all this struck me. Left-leaning Democrats typically look for immediate relief to help the beleaguered victims (and counter the upcoming threat of the midterms). Bernie Sanders and others have proposed windfall excess profits taxes on Big Oil. Others want to rescind the federal gas tax.

More conservative Democrats like Larry Summers look for longer-term, painful fixes. I’m reminded of the blowback President Biden received for speaking his mind about Putin. He took a lot of undeserved flak for that, much of it from his own administration, which “overreacted and undercut him.” The State Department and the Kremlin both signaled unhappy long-term consequences from his remark.

Not everyone is on the same page regarding Putin, and unfortunately not everyone is on the same page regarding inflation. Summers and Klein did try to bridge that gap in a good, reasoned exchange.