My Bet: Larry Summers Will Be Chosen as Treasury Secretary

Everyone speculating on President-Elect Obama’s most likely choice for Secretary of the Treasury has the same two names: Larry Summers and Tim Geithner. I have known them for a long time, and worked with both in the Clinton Administration. Either one would be excellent. Geithner is now way ahead in the Intrade odds: 45% to 27% as of November 14. But my bet is that Obama will go with Summers. For one thing, Geithner is needed at the New York Fed, where he has been one of the key players managing the financial crisis.

They are both said to have baggage that might disqualify them. I disagree. Some say Geithner is tarred by association with the Bush Administration, because he has been working with it on the crisis. But his position is non partisan, and some continuity in managing this crisis is desirable. More to the point, it was in the Clinton Administration (under Larry Summers) that Geithner rose from obscurity to prominence.

Some say that Obama should not choose either of them, precisely because they are associated with the Clinton Administration and he campaigned for change. But that is the most absurd argument of all. We need somebody experienced in this job. The sort of competence these two showed at the 1993-2001 Treasury, especially at crisis management, and the track record of that Administration, is what we want to change to, not what we want to change from. All the economic indicators improved during the Clinton Administration, as surely as they have worsened since then: employment, growth, inflation, budget balance, poverty, and so on.

Most sensationally, Summers is said to be tainted by his time as President of Harvard. Too much has already been said about this. But I will make just a couple of observations. First, although Summers may not be Mr. Personality, and he will never be elected to high office nor chosen to head offices for women’s rights or the environment, he has all the most important qualities for the Treasury job. Despite a tendency to say what he thinks, I don’t think he committed any true faux pas or became involved in any mini-scandals during 8 years in the government — no easy feat. (The closest he came to a faux pas, or what counts for one in the media, was a statement that the argument for abolishing the estate tax was based on greed rather than efficiency — a statement that he quickly retracted without bothering to try to explain what he had meant, having already by then become familiar with the rules of political brouhahas.)

In his time in Washington, he learned how to get along with politicians across the spectrum, from socialists to the far right. It’s true that he wasn’t able subsequently to get along with the full range of faculty in the Harvard English Department, but that is a tougher task.

Finally, I continue to be surprised at how the press describes Summers’ ill-fated and ill-considered (but “off the record”) remarks regarding explanations for the lack of women in academic science departments. He is most often reported as having suggested that women generally have less aptitude for science than men. I link to the text of his remarks here, and urge readers to make up their minds for themselves. But I don’t read his speculation about the various hypotheses quite the way most people have assumed. To me the outrageous line in the remarks was, rather, the suggestion “that no economist who had gone to work at the President’s Council of Economic Advisers for two years had done highly important academic work after they returned”!

Comments

[speculari:]

Jeff,
You are way out of touch on this subject and, I do apologize for not keeping you in the "loop" so to speak. While I would concur that either Tim or, Larry would, indeed, be marvelous choices, there are other more compelling forces at work here.
I have it on very good authority that as a result, in part, of the G20 meetings as well as other preceding events - that Alistair Darling will be named to the post of Secretary of the Treasury and that Barney Frank will be filling the post of Chancellor of the Exchequer. This is an event of truly historic proportions as, I am sure, you & many others would recognize!
This will likely be known as either the Darling/Frank Swap or, perhaps, the Frank/Darling Swap (my understanding is that P.M. Brown favors the former) and, as far as whose idea this might be - I would be loathe to attribute it to either Minister Brown or to our President elect. Both gentlemen are very magnanimous and, as a matter of course, are both inclined toward focusing on the international benefits that would accrue as a result of this exchange.

2008 Nov 16 02:53 PM

[CaptainJJack:]

I cannot think of anyone who would be a better choice for Treasury Secretary than Summers. If you follow his columns in the Financial Times, you find that he has been very, very accurate on what was coming and what needs to be done.

I met Summers a long time ago, and he was as abrasive then as he is now. If personality was required for the job, Simmers would be a non-starter.

But, what we need is some adult supervision, and for that, I can think of nobody better than Summers.

2008 Nov 16 07:01 PM

[MarkW:]

Dr./Mr. Frankel, nice try. But your attempt at running interference for your friend and former colleague falls short.

First of all, I don't quite understand why you are calling his prepared and premeditated keynote address before a major academic conference "off the record remarks". At every conference I've ever attended, an academician is assumed to be responsible for the content of his talk.

Dr. Summers' remarks that day were certainly "provocative", so if that was the sole expectation people had of his talk, he certainly delivered. Unfortunately, the president of an academic institution (especially one of the most prestigious in the world) has a slightly higher standard to meet than that. Namely, some academic rigor is required. To be fair, asking an economist to deliver a comprehensive treatise on an interdisciplinary area as far afield from his as developmental psychology/biology and organizational sociology is a tall task. If he lacked the humility (which I now understand that he does, systematically) to at least run his speech by some of the accomplished developmental psychologists at his own institution, then he should have simply declined to speak and saved everyone some grief.

I would run down the gaping holes in his arguments here, but this has been done to death elsewhere. Let it suffice to say that his "intuition" regarding "mommy trucks" and "daddy trucks" are not adequate replacements for a vast literature, of which he cited merely a small sliver of the relevant work (yes, I have re-read the transcript). And sadly, he demonstrated an utter, gaping blind spot to the one factor cited (anecdotally, granted) by the women scientists I have worked with as the prime reason for attrition in the field: the subtle but pervasive sexism in the day-to-day business of a woman's transactions in the academic science world. It is this sort of thing that most often has women throwing up their hands and saying, "it's just not worth it". Summers' ignorance on this issue is ironically another example. It may be more benign than malicious in his case, but it is there nonetheless.

Please try to take the time to speak with some women scientists about summers' take on the issue before you write off the significance of their objections to his talk.

He may be the best choice for Secretary of Treasury on a purely technical basis. But heading such an executive department is also about managing a large number of accomplished women as well as men. These people all have to be reasonably comfortable with him. I can understand why some very bright women would have doubts about whether they are in a place where their work and thoughts are valued appropriately in an organization headed by him.

2008 Nov 16 09:47 PM

[Robert Nabloid:]

@speculari: I would not be in favour of that!

2008 Nov 21 05:29 PM

[Ray Lopez:]

Summers made an interesting point: to get to the very top in science, you really need to be good, and right now (for whatever reason, possibly societal, possibly genetic) the really good are men:

RL

from Summers speech:

And perhaps it's not even talking about somebody who is three standard deviations above the mean. But it's talking about people who are three and a half, four standard deviations above the mean in the one in 5,000, one in 10,000 class. Even small differences in the standard deviation will translate into very large differences in the available pool substantially out. I did a very crude calculation, which I'm sure was wrong and certainly was unsubtle, twenty different ways. I looked at the Xie and Shauman paper-looked at the book, rather-looked at the evidence on the sex ratios in the top 5% of twelfth graders. If you look at those-they're all over the map, depends on which test, whether it's math, or science, and so forth-but 50% women, one woman for every two men, would be a high-end estimate from their estimates. From that, you can back out a difference in the implied standard deviations that works out to be about 20%. And from that, you can work out the difference out several standard deviations. If you do that calculation-and I have no reason to think that it couldn't be refined in a hundred ways-you get five to one, at the high end

2008 Nov 21 06:13 PM

[speculari:]

Gotcha!


On Nov 21 05:29 PM Robert Nabloid wrote:

> @speculari: I would not be in favour of that!

2008 Nov 22 12:36 AM