Larry Summers Goes To The Mountain

August 23, 2019



For those of you who aren't that into social media, you should know that Twitter is a remarkable outlet for the economics profession. I have great respect for the practitioners in the field. Social media has allowed me direct interaction with Fed officials, senior economists, and former administration officials who served in various capacities at Treasury and the West Wing. At the same time, I'm not a trained economist, I am completely self taught (which is actually easy given the resources the internet provides) nor will I serve on any panel or get invited to offer my opinions.


On Thursday, August 22nd, we were treated to a thread, a Midrash, actually, by Larry Summers, former World Bank Chief Economist, U.S. Treasury Secretary, former President of, and professor at, Harvard. He seems to have come to the conclusion, at long last, that monetary policy just might not be the all conquering cure for every economic ailment.





The chatter unleashed on what is known as #FinTwit has gone through the roof. For me, I am positively dumbstruck by this.


How in God's name did someone with Mr. Summers' CV belatedly come to the conclusion in late 2019, that after nearly a decade of zero bound interest rates, monetary policy alone could not get the economy into escape velocity and finally bury the contagion the Great Financial Crisis had spread? Did Professor Summers actually believe that cheap credit, by itself, would compensate for three disastrous tax cuts that throttled inequality and incentivized rent seeking, or neuter the effects of a predatory health care system that has strip mined the buying power of millions of Americans, or the complete lack of anti-trust enforcement, all of which have ravaged the country for almost 20 years? I can't believe he expressed this publicly. Especially since I've been hammering at this point for years. After all this time, Mr. Summers now announces that the effectiveness of Central Bank policy in the face of all these obstacles would appear to be "in doubt." Well, thanks for that.


Now there IS a lot of talk about "out of touch elites" out there, and some of those "elites" (sic) certainly are. But not all of them, and there have been many voices from the field who came to this conclusion years ago. I ought to know. I've been interacting with them for years. But after posting this thread, you would think Mr. Summers just uttered The Sermon on the Mount. The economic community has gone apoplectic over this screed, simply for stating was has been plainly obvious since 2010. And now, he's the talk of Jackson Hole. Mr. Summers appears to have found God, and we'll be hanging on every word.


Me? I'm going to have lunch.




Please reload

Featured Posts

The Fed is Just KILLING Us With These Low Interest Rates!

April 6, 2015

Please reload

Recent Posts

January 6, 2020

August 1, 2019

December 25, 2018

Please reload

Search By Tags

I'm busy working on my blog posts. Watch this space!

Please reload

Follow Us
  • Facebook Classic
  • Twitter Classic
  • Google Classic

FloMartin Securities, Inc.

Donald R. Davret, Investment Advisor Representative


Investment advisory services are offered through FloMartin Securities, Inc, an Investment Advisory firm. The firm only transacts business in states where it is properly registered, or is excluded or exempted from registration requirements.
All investment strategies have the potential for profit or loss. Changes in investment strategies, economic conditions, contributions or withdrawals may significantly alter a portfolio’s performance. There is no guarantee that any specific investment or strategy will be suitable or profitable for a particular client. Past performance is no guarantee of future success. We cannot guarantee that a portfolio will match or outperform any particular benchmark. None of the content should be viewed as an offer to buy or sell, or as a solicitation of an offer to buy or sell the securities discussed.

This website is a publication of FloMartin Securities, Inc. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change.​

Information on this website does not involve the rendering of personalized investment advice, but is limited to the dissemination of general information on products and services. A professional adviser should be consulted before implementing any of the options presented

  • Wix Facebook page
  • Twitter Classic
  • Google Classic