President Barack Obama’s former National Economic Council director, Larry Summers, says the economic advice being given to President-elect Donald Trump is “beyond voodoo economics” and is equal to “creationism.”
Summers’ criticism is aimed at the policy paper written by UC Irvine professor Peter Navarro and international investor Wilbur Ross, in which they favor “tax cuts, reduced regulation, lower energy costs, and eliminating America’s chronic trade deficit.”
Summers, who is also the former Secretary of the Treasury under President Bill Clinton, and the immediate past president of Harvard University, is the son of Wharton Business School (Trump’s alma mater) economists Robert Summers and Anita Arrow Summers. His uncles, Paul Samuelson and Kenneth Arrow, each won the Nobel Prize in Economics. Samuelson’s 1961 book Foundations of Economic Analysis became the dominant textbook for first -ear college study of economics for three decades. But Samuelson erroneously wrote that although the GDP of the Soviet Union was about half that of the United States, the Soviets would pass the U.S. in GDP as early as 1984 and no later than 1997, because in Samuelson’s two-dimensional “production possibility set” graphs, centrally planned economies maximize efficient resource use to grow faster.
Summers followed in the family business by earning a Ph.D. from Harvard and teaching economics for a decade. He became the Chief Economist at the World Bank from 1991 to 1993, just in time to experience the economic implosion of the centrally-planned, poverty-stricken Soviet Union, and then to help facilitate the economic centralization of the European Union.
Summers joined the Clinton administration in 1993, where he backed the North American Free Trade Agreement (NAFTA) and granting China “Most Favored Nation” status. At Treasury, he was influential in promoting international financialization through the repeal of the Glass-Steagall Act prohibitions on taxpayer guaranteed commercial banks being directly involved in the lucrative securities industry.
Serving as president of Harvard from 2001 to 2005, Summers found himself in hot water for having the temerity to question the research of “democratic socialist” professor Cornel West; and then he was fired for considering that one reason there were so many more men than women in top science and engineering positions might have been a “different availability of aptitude at the high end” between the sexes.
Summers reinvented himself three years later in the Obama administration, where he oversaw the “weakest economic recovery since WW II.” Summers was a key decision-maker in designing the administration’s response to the Great Recession, which included “supporting every bailout of financial firms”; a “shovel-ready jobs” stimulus program; the Dodd-Frank regulations; and extending the U.S. balance sheet to stabilize the European monetary system.
It is “voodoo” to Summers that President Trump will have more power than when President Reagan sought to shrink government economic power by “starving the beast.” And thanks to former Democratic Sen. Harry Reid’s nuclear option blowing away the Senate filibuster rule, Trump likely will confirm all his appointees.
It should not be surprising that Summers feels like he and his allies are being sidelined as he watches Navarro and Ross sweep into the “dustbin of history” the economic centralization policies that Summers and his family championed over the last 75 years.