President Elect Obama has begun the process of selecting his staff and cabinet members. Rahm Emmanuel, the basis for the character of Josh Lyman on the West Wing, has accepted a position as chief of staff. Robert Gibbs, who recently (and deliciously) ripped Sean Hannity apart over Obama’s supposed “Ayers problem,” is going to be the press secretary. These seem to me like awesome selections — from the little I have learned about each of these men — but other names being floated around are less terrific. Lawrence Summers, supposedly at the top of the short list for SecTreas, is a fairly problematic figure, in my view.
As Max Blumenthal at the The Huffington Post reports, Summers is famous around the world for writing a memo — while president of the World Bank — suggesting that the bank should encourage polluting industries to migrate to “LDCs” [Least Developed Countries], claiming that “the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that,” as he put it, though he later claimed to be joking. Jose Lutzenberger, while Brazil’s secretary of the environment, replied to Summers in a letter by suggesting that “[y]our reasoning is perfectly logical but totally insane… Your thoughts [provide] a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional ‘economists’ concerning the nature of the world we live in.” For his candor, Lutzenberger was canned, and for his brilliant logical reasoning, Summers was awarded the position of secretary of the treasury under Clinton and given the presidency of Harvard.
The issue with the Summers memo is not merely his assumption that LDCs ought to have been (and ought to be) lining up to absorb our toxic waste — the waste that we want to produce — but more crucially the system of international relations within which our friendly “encouragement” happens. I mean, societies often have to choose between polluting more and growing an economy and polluting less and growing less quickly, and if you want to develop fast economically, there is a price in air pollution. Because pollution often affects the whole community — i.e., I breath in the toxic pollution you produce, my cancer is cause partly by the chemical plant down the river — I believe that pollution and growth need to be balanced through democratic deliberation. But in the context of World Bank activities, “encouragement” usually meant — and means — conditional assistance, in concert with the IMF — e.g., “reduce your anti-toxic waste regulations or else we don’t help you with your debt and/or inflation problems.” Of course, now that the US financial system is suffering the consequences of excessive liberalism and deregulation, Summers has reverted to the reflexive interventionism of mainstream economists — when it comes to our economic crises — and (rightly) supported the $700 billion bailout package.
Since there are so many other more palatable names on the docket for SecTreas, and Summers is such a controversial figure (and not only because of this memo), I think we should level pressure against his selection.
Update
Dylan Matthews, at pushback, contests Blumenthal’s account of the Summers memo controversy. It seems that Summers took responsibility for a memo that someone else wrote, but which he signed, in the context of internal debate about the effects of free-market policies and pollution. The memo was then leaked with official-looking letterhead to The Economist. I don’t know how convincing of a defense this is, given that the memo only gave offense in the context of the Bank’s actual, arguably coercive policies, policies quite consistent with the anti-regulatory character of the memo. But anyway, I thought I’d link to the defense, get some debate going, if only with myself. And as I said, there’s lots to criticize Summers on beyond the memo, whatever the final version of the story turns out to be.
Funny, Josh Lyman was based on Rahm Emmanuel, Matt Santos on Barack Obama and Santos made Lyman his chief of staff.
And for good measure Arnold Vinick remines me a lot of John McCain.
Comment by John — November 7, 2008 @ 9:28 am
Regarding the ridiculous quote upon which your anti-Summers argument seems to hinge, Summers later claimed to be joking. Is there any reason to believe that Summers wasn’t kidding?
Because I have a hard time believing a man who worked closely with Bill Clinton could say something so preposterous — a person who really wanted to saddle LDC’s with our toxic waste would speak about it so frankly unless he was a complete moron. I’ve been listening to a lot of traditional media lately, and what I hear over and over again is that Summers is brilliant, perhaps the person best-suited to confront the economic challenges this country is facing. I’d hate to think we’re letting some sort of political correctness interfere with addressing this economic crisis, which will have far, far-reaching consequences.
At this point, I’m pretty sure Summers WAS kidding, and I think Jose Lutzenberg’s response was perhaps a mistake worthy of a canning.
Comment by Ian — November 10, 2008 @ 7:23 pm
It may be that Summers didn’t write the quote that’s been attributed to him. But my question still stands: Wasn’t the quote itself obviously a joke, whoever wrote it? Do we have access to the actual document? I hope we aren’t being duped by anti-Summers people who are throwing mud against the wall and waiting to see what sticks.
Comment by Ian — November 10, 2008 @ 7:25 pm
I just checked out the memo and I can’t believe the author intended for it to be taken seriously. Consider this excerpt:
“I’ve always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.”
People don’t seriously talk about Africa being “under-polluted,” do they? In all capital letters? Is the reference to “welfare enhancing trade in air pollution and waste” meant to be taken seriously? I don’t buy it, but I could be wrong.
Comment by Ian — November 10, 2008 @ 7:31 pm
Reagrding Blumenthal’s blog, he also writes this:
“If Obama nominates Summers, he will send a dispiriting message to governments of developing countries — especially in Africa — just as they have begun to look at the United States as a beacon of hope.”
I simply do not believe this assertion of Blumenthal’s. Is there any evidence anywhere to support this argument other than this controversy over Summer’s “UNDER-polluted” quote?
Comment by Ian — November 10, 2008 @ 7:34 pm
At risk of using an argument from authority, this man’s brother used to be my boss. And what I heard from my former boss confirmed my suspiscions about Lawrence Summers – he can be socially impolitic, even inept, and certainly prone to putting his foot in his mouth, a la Joe Biden. I think his comment about women in science and the way that he dealt with the aftermath bear that out.
As far as the women in science comment goes, I know that Lawrence Summers’s comments were taken out of context. While I must admit that I really don’t know that much about his political disposition apropos of economics, what I have read suggests that he’s relatively moderate, at least as far as domestic economics goes. I’m less familiar with his perspective on international trade.
From my point of view, the thing that concerns me most, is that he considers (or perhaps considered) Alan Greenspan one of his mentors. Of course, he made that comment back before Greenspan decided to politicize the Fed and destroy the Global economy.
Perhaps I’m giving him too much the benefit of the doubt but, I’m inclined to believe that Summers’s ‘reverting to the reflexive interventionism of mainstream economists’ is his genuine appraisal that it is the appropriate course of action for this moment in time.
Comment by aaron — November 11, 2008 @ 3:14 pm
I find it especially aggravating to think that Summers wouldn’t be chosen because of his comments about women at Harvard. There is so much at stake in the selection of the next Treasury Secretary, and Obama and the Dems would do a brutal disservice to the country if they made their selection based on some criterion other than who will do the best job. It would be one thing if Summers was taking the position that women are inherently bad at math and science — but Summers has apologized profusely. So let’s get on with the people’s business.
Comment by Ian — November 12, 2008 @ 12:48 am
At the time that it was leaked, The Economist thought we should take the memo and its argument seriously, writing:
Now, I completely agree with Ian that Summers shouldn’t be removed from consideration because of a single poorly worded memo. The memo needs to be put in the context of his whole career and his tenure as the chief of the bank.
The reason the memo was controversial–beyond the fact that people, including those at The Economist, did not believe that it was satirical–was that its reasoning reflected the economic policies and logic characteristic of the Bank. It seemed plausible for good reasons: Summers had been personally involved in the economic destruction of Lithuania and Russia after the fall of communism, and he used his tenure at the Bank to push for neoliberal economic policies around the world, and from what I’ve seen of him (albeit a partial picture) he seems highly ideological.
As I said in my original post, he has to some degree changed his tune now, now that it’s the U.S. suffering the effects of excessive economic liberalization, but his poor track record as a practical economist — in crafting policies to improve the lives of real people — speaks against him, as does his polarizing ideological demeanor and personal history. We can do better.
Comment by Lee — November 12, 2008 @ 3:38 pm
Some more notes: Summers was a proponent of the 1999 Gramm-Leach-Bliley Act — a bank deregulation bill, arguably a contributor to the current financial crisis — within the Clinton White House.
He also had this to say about the so-called antiglobalization protests in Seattle in 1999:
This is sort of a “If you don’t support the Iraq war you’re objectively pro-Saddam” type of argument.
Those poor misinformed protesters in Seattle–which, incidentally, had nothing to do with NAFTA, but the WTO–apparently were expending their energy in a way to help promote prostitution. The argument is ridiculous on a number of levels that I don’t have time to get into. It misunderstands what the protesters were protesting and constructs a straw man for the purpose of making seem as if there are only two choices: accept globalization as people like Summers want it to look, or return to some rabid nationalist economic stone age. These were never the only choices…
Anyway, the point is, Summers’ flaws are not one-off accidents or inadvertant misstatements on his part. His whole worldview, which he has admittedly to some degree been revising, is highly warped, and part of problem, in my view.
Comment by Lee — November 12, 2008 @ 4:28 pm
Thanks to Lee for some more substance to chew on regarding Summers. Clearly (to Lee) your resistance to Summers is not based on political correctness, but about real concerns about his thinking on policy issues. This is where my lack of understanding about global economic policy leaves me flailing. If Summers pursued policies that destroyed economies (in Lithuania and Russia, for example) and thinks it makes sense to pollute third-world countries, then it must say something important about our politics that Barack Obama would seriously consider him for this job. I’m not sure what that important thing is, but I can’t believe Obama is interested in destroying economies or polluting third-world countries. It raises all sorts of questions about our rhetoric when it comes to international development: How much of the rhetoric of development is a rationalization for the U.S. to pursue policies that serve its own interests at the expense of third-world countries, and how much of the rhetoric reflects an honest effort to manage the highly complex challenges people like Summers are apt to face? Does Summers’ ideology even make sense? And if Summers has a poor record on these sorts of issues, why doesn’t that hurt his reputation. I feel like I might sound quite naive to someone who understands these issues better, but the truth is I’m just ignorant of them. I’ve defended Summers, however, because I don’t want to see us shoot ourselves in the foot by putting cosmetics ahead of substance when it comes to these sorts of important appointments.
Comment by Ian — November 12, 2008 @ 11:53 pm
I guess one thing to say is that Summers is a very smart guy — probably a bright theoretical economist, by all accounts — but a bad administrator and real-world economists. I think his position among economists was not unique, though by no means was it the only position on questions of development, and so there was (and is) lots of positive reinforcement for positions that, in my view, survive and do not besmirch the reputations of people because those positions are ideologically compatible with the needs of powerful people. This is not a conspiracy theory — I think Summers believes sincerely in his own economic philosophy, but I think he was so fixed in his views that it has taken a crisis as big as the recent economic financial meltdown to shift him a little to the left. Summers is also famous for saying that economists at development organizations, like the World Bank, should “Spread the truth — the laws of economics are like the laws of engineering. One set of laws works everywhere.” If this is his true belief, then it’s easy to se how his total confidence in the system of economics he has been taught might trump things like contrary evidence. If the evidence contradicts the theory, the evidence must be wrong.
Comment by Lee — November 13, 2008 @ 1:06 pm
[...] the progressive critique of Obama’s cabinet has been build precisely on pragmatic grounds, here and elsewhere. When Obama appoints highly ideological key architects of our financial crisis [...]
Pingback by Not a Time to Draw Conclusions? — December 8, 2008 @ 4:36 am