Summers is over. Unfortunately, the unemployment crisis is showing no signs of going anywhere.
Larry Summers (right), President Obama’s top economic adviser, said Tuesday he’ll return to his teaching job at Harvard at year-end. He is the third top economic aide, after budget czar Peter Orszag and policy wonk Christina Romer, to leave the White House in short order.
Summers won’t be missed by many in the Beltway, judging by the amount of time people spent complaining about his alpha economist behavior. And it’s no surprise that the president wants to make changes.
After all, the near collapse of the economy – averted by vigorous government action — is ancient history. The unexpectedly quick turnaround of the financial sector – the signature accomplishment of the Summers-Geithner team – is now seen as having been inevitable and not necessarily even laudable. The handouts to millionaire bankers and deep-pocketed investors still rankle, whatever Charlie Munger might think of the choices facing policymakers.
Add to that a double-barrelled unemployment problem. Joblessness is near a three-decade high and underemployment affects 1 in 6 Americans. Big companies are hoarding cash rather than investing, and CEOs are carping that the president and his minions don’t understand them.
The administration doesn’t have a lot of maneuvering room at a time when growth is slow and the U.S. budget position is already seriously out of whack. What’s more, there is little sign the White House is ready to move beyond half-measures.
Which is what makes the task at hand so sobering: No matter who fills Summers’ job, whether it’s another economist or a hard-hitting business leader, turning the jobs problem around is going to take a lot more than improved interpersonal skills. It will mean trying to sell the country on new policies to boost jobs.
That will be the reality Summers’ successor, whoever he or she may be, will face come January. Economic debates may run a little smoother, but it is going to take a lot more than smoother meetings to turn the ship around.