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Summers Out As Economic Adviser

Summers Out As Economic Adviser

Lawrence Summers, National Economic Council director to the President will leave the post after the November congressional elections.  His departure leaves Treasury Secretary Timothy Geithner as the only member of President Obama’s original economic team.

Summers was Treasury Secretary under former President Bill Clinton and served from 1999-2001.   He left the Clinton administration to become president of Harvard University where he came under fire for his comments that women displayed inherently less aptitude in the sciences and math then their male peers, and that lack of aptitude could explain some employment disparities.

Summers has received a lot of criticism, both prior to joining the administration, and then after he took the reigns in crafting the administration’s economic policy.  He’s got deep ties to the business community and has advocated for leniency towards Wall Street in its response to the financial crisis.  He pushed back against efforts to limit banks from engaging in proprietary trading and was reluctant to spend money in economic stimulus unless it flowed directly to the private sector.

Given the results of the Summers approach, this announcement is nothing short of great news for those hoping for a change in direction from the Obama administration in responding to the financial crisis.  Much of the restraint exercised by the administration in dealing with jobs creation and government spending came at the behest of Summers’ advice and to the contrary of the majority of economists that said direct stimulus spending, not Wall Street incentivising, was needed to kick start the economy.  There’s no doubt that Summers cozy ties with the business community directly shaped the administration’s initial response to the crisis, and that response needs changing.  With the Summers announcement coming on the heels of the Elizabeth Warren nomination, it looks like such a change in direction is on its way.

It is not entirely clear that Summers is leaving voluntarily, though neither the administration nor Summers would actually admit to it if he was asked to leave.

And not to waste any time, speculation is already mounting as to just who will replace Summers.  Reports are that the administration is eager to find a woman to fill the role.  That too would be a welcome addition.

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photo courtesy of World Economic Forum via Flickr

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36 comments

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8:54PM PDT on Sep 23, 2010

You are right jim that's why he writes for the NYT, a failing paper which once was the best. Says alot....

5:59PM PDT on Sep 23, 2010

Thank you very much for sharing x

12:47PM PDT on Sep 23, 2010

Krugman? Are you people crazy? Krugman and the wacko Keynesian economic theories were just proven wrong....AGAIN. We can't solve the debt and leverage problems that caused this countries economic meltdown with more debt and leverage.

We are digging this country and the World in deeper and deeper. Debt is not the answer. It is the problem.

9:12AM PDT on Sep 23, 2010

Maybe Obama will finally start giving the change he promised but did not follow through on by appointing cabinet members that would be comfortable & welcome in any Republican administration. Now if he is serious to do something for the country & the people he can get rid of Geitner, another Wall St agent, & Eric Holder, the advocate for keeping most of the outrageous attacks on civil liberties from the GW cabal.

So far, just another Clinton - New Democrats! Just old Republicans - the People be damned. A least Clinton has admitted his Conservative economic policies (a la Reagan/Bush) were wrong & have helped cause the economic meltdown we are all suffering under now - & paying for.

5:57AM PDT on Sep 23, 2010

Hope that good things come from this for the American people.

5:43AM PDT on Sep 23, 2010

Good riddance! More positive changes coming I hope!
Time will tell!!!!!!!!!!!!!!

11:02PM PDT on Sep 22, 2010

Great news! Now just get rid of worthless Goldman/Sachs boy Geither and put Paul Krugman (whose EVERY prediction has proven true) on board!!!!! No more stuges!

9:23PM PDT on Sep 22, 2010

Obama need to get either Krugman or Stiglitz...or maybe both...now that would be an economic team that would work!

8:37PM PDT on Sep 22, 2010

Money for everyone except for the 99ers.
What a shame .

8:36PM PDT on Sep 22, 2010

I pray Geithner leaves too. That gang did not help the citizens, in fact they destroyed our futures.
Government should t NOT Wall st .bail out Main S

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