[Artwork by KERRY WAGHORN]
NEW YORK TIMES: The chief architect of President Obama’s economic policies, Lawrence H. Summers, will leave the White House and return to his position as a professor at Harvard, the administration announced Tuesday. The departure of the outspoken Mr. Summers, who served as director of the White House National Economic Council, marks a major shakeup in Mr. Obama’s economic team, The New York Times’s Sheryl Gay Stolberg reports. In July, the budget director Peter R. Orszag stepped down and at the beginning of September, Christina D. Romer ended her stint as chairwoman of the White House Council of Economic Advisers. Only Treasury Secretary Timothy F. Geithner remains from Mr. Obama’s original top-tier economic team. MORE
RELATED: Rumor has it that Orzsag left the Obama administration at odds with White House chief economist Lawrence Summers—who one of the primary enablers of the casino economy, and also a Boomer, of course, who just won’t go away. Now that we can create and destroy on a global scale—economically, environmentally—it’s becoming ever more urgent for the Lawrences (and even the Lenos) to step aside. As Banksy, perhaps the most famous Gen X graffiti artist, put it on a piece of art where a monkey wears a sandwich board: “Laugh now, but one day we’ll be in charge.” That day is all but upon us. Let’s hope it’s not too late. MORE
RELATED: Many observers fault the President. Perhaps the most savage indictment was written by the acerbic Matt Taibbi. In the December 10th edition of ROLLING STONE he summarized the case against Obama. First, that his economic team is flawed: “the key economic positions in his White House [are filled] with the very people who caused the crisis in the first place.” Taibbi writes that Bob Rubin – Wall Street heavy hitter and former Clinton Treasury secretary – is calling the shots; he’s assembled a team of his cronies including current Treasury chief Tim Geithner and director of the National Economic Council Larry Summers. Taibbi isn’t alone in criticizing this team, on November 20th Oregon Congressman Peter Fazio observed, “Treasury Secretary Tim Geithner and White House economic adviser Larry Summers should lose their jobs for protecting Wall Street at the expense of broader job creation.”
Taibbi’s second accusation is that the Rubin gang has directed Federal funds to Wall Street instead of Main Street, including an ill-advised November 23rd, 2008, bailout of Citigroup – Rubin’s firm. So far, $454 Billion has been spent bailing out financial institutions. Recently Neil Barofsky head of the Troubled Asset Relief Program (TARP) observed, “the effort to save the nation’s financial sector came at great cost to taxpayers, to the integrity of the financial system and to the public’s perception of the federal government.” On December 9th, a Congressional Oversight Panel reported on TARP, noting: “Markets remain dependent on government support… Government intervention signaled an implicit government guarantee of major financial institutions, and unwinding this guarantee poses a difficult long-term challenge.”
Taibbi’s third accusation is that Wall Street hasn’t changed: “Obama and his team of Rubinites have done almost nothing to reform the warped financial system responsible for imploding the global economy in the first place.” In an interview in the December issue of THE PROGRESSIVE, Elizabeth Warren, chair of the TARP Congressional Oversight Panel bemoaned the failure to reform Wall Street: “The banks lobbied Washington so they could write the rules that got us into this mess. They then lobbied Washington to get the money to bail them out. And now they are lobbying Washington to write the rules so they can get us into the next crisis.” MORE