Sunday, 26 September 2010

One or Two Things You Should Know About Larry Summers

That The Brilliant Larry Summers Will Leave the Obama Administration to Return to His Tenured Teaching Job at Harvard was the main economic/political news of the week.

The first thing you should know about Larry Summers is that he is brilliant. The New York Times uses the adjective brilliant before his name the way it uses president before Obama’s name: as a factual designation. Larry Summers is brilliant as Barack Obama is president. Through constant repetition, the brilliance of Larry Summers then becomes a matter of record; there is a double entendre in the New York Times being the “newspaper of the record”. The record thus having been established, it is passed to others to spread, reinforce and better it. Hence, Edward Luce of the Financial Times:
There is barely an economist in the world who would deny that Mr Summers has a bigger brain than they do.
Even Larry Summers’ critics must start by allowing for his brilliance: Although he is a brilliant economist ...

The second thing you should know about Larry Summers is that he is a tad abrupt, a bit difficult, and may, on occasion, even come across rude. To the New York Times, these are understandable reactions of a brilliant man who surely finds working with dummies frustrating, a genius with little patience with anyone bearing an IQ under 250.

Yet, what and where is the evidence of his brilliance? If you research Larry Summers’ contribution to economics, you'd come up empty handed. There is nothing the man has said, done or written that a dull mind could not produce. He looks more like a fool.

When he was the chief economist of the World Bank in 1991, he wrote an internal memo in which he argued for transferring the air-polluting industries to poor countries because life there was cheap and the pollution related death, therefore, would be more “economical”. He wrote:
The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.
At the end, he summarized his thoughts as only the writer of the memo could:
I’ve always thought that under-populated countries in Africa are vastly UNDER-polluted [CAPS in original], their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City.
In 1998, as the assistant secretary of Treasury to Bob Rubin, he testified – triumphantly and with satisfaction – on the destruction of the industrial policy programs in Japan and other Asian countries as a result of the financial crisis.
“There has been more progress in scaling back the industrial policy programs in these countries in the last several months than there has been in a decade or more of negotiations.”
The quote is from the Wall Street Journal of February 13, 1998, p. A2, under the heading “U.S. Presses Japan to Stimulate Economy”.

These two episodes tell you everything you need to know about Larry Summers. He is an intellectual thug, “intellectual” in the sense that he pulls words instead of knife. In his line of work, a reputation for brilliance helps; it is the intellectual equivalent of being known for carrying a sharper and longer knife. But all is a sham, and there is no there there.

Perhaps the aggressive, in-your-face way of belittling others and pushing his opinions – however wrong-headed and idiotic – runs in the family. Perhaps it is psychosis, this willingness to say and do anything to advance the narrow interest one is serving without any consideration for the “collateral damage” or the larger interest of the society. Whatever it is, Larry Summers is off to Harvard, where he will be educating the nation’s best and brightest for years to come.