Full employment is being pursued by Biden, despite repeated consultation will famously neoliberal Larry Summers. James Galbraith and Ryan Grim sit down to discuss what this means for US economic thinking.
Summers, for those of you who don’t remember, was Obama’s top economist at the height of the financial crisis. Before that, he was a treasury secretary for Bill Clinton, whom he helped push through the very Wall Street deregulation that ended up fueling the 2008 crash.
The idea that Larry Summers thinks anybody should be listening to him at this point doesn’t speak well of his judgment. The good news is that, no, it doesn’t seem like either Biden or his economic team are actually listening to Summers. More on that in a moment.
But first, let’s talk about Larry Summers’ economic policy beef with the Biden White House. Basically, it boils down to inflation. Summers thinks that Biden is doing TOO MUCH to juice the economy and that all this government spending is gonna drive up inflation. He’s called inflation “the primary risk” that we face. It’s true that real inflation that gets too high can be a big problem for regular people — that is, if wages don’t keep up with it or you’re on a fixed income. But when people like Summers talk about inflation and an overheating economy, it’s not just rising grocery prices they’re talking about.
What does this mean for the rest of us?
The fight over wages and inflation is at the very heart of the class war. And what’s interesting is that even to those who say race- and gender-equity dynamics should be prioritized ahead of a class analysis, wage pressure is still the most important game in town.
Now, back to Biden and Summers. Let’s pretend for a moment that Summers’ grievance is sincere and grounded in real economic data, instead of just his bitterness that he’s no longer an insider. The fact that Biden made that call to Summers at all is worrying. The official line on the call, however, is more encouraging.
The Post quoted a White House official who said that Biden is seeking “a wide spectrum of views” and that the Summers call was “brief and informal.” The same official said that the call took place before the president’s speech on the economy in Cleveland on Friday. They explained that Biden “has spoken to a number of voices outside of the administration, including many with whom he has disagreements,” and added that he has also been speaking with Bernie Sanders.
For more from The Mint on work and income, check out Stewart Lansley’s piece on a guaranteed income floor.