November 17, 2008

Is Larry Summers Better Than Greenspan And Paulson?

The infotainment obsession that dominates mainstream media has utterly trivialized the issue of the possible appointment of Larry Summers as Treasury Secretary in the Obama administration. It seems that the main problem would be the "veto" of feminist groups because of his infamous remarks about women and science, when he was President at Harvard. While he amply demonstrated his lack of political sensitivity, and tact (not to mention a deep ignorance of human biology) the fact of the matter is that he wants to become again the Treasury secretary. And in this capacity he should deal with the problems of a financial crisis whose origins go back to the three men shown on this cover of Time magazine in February  1999. Rubin, Greenspan and Summers opposed all attempts to regulate the derivatives market in the 1990s. As a New York Times reader pointed out today,
Brooksley Born, head of the Commodity Futures Trading Commission, proposed greater transparency in derivatives trading in the late 1990s, involving disclosure of trades and reserves available in case of losses. Summers called Born into his office to chastise her for such a proposal. Eventually her reforms were killed through the efforts of Summers, Robert Rubin, and Alan Greenspan — the great wise men. Now we live with the consequences.
At least, Greenspan feigned to be repentant: not so Larry Summers. They have indeed NOT saved the world, but only postponed the financial meltdown. Would Summer's appointment be a change in Washington?