Summers’s Lament

And I agree with many of Lawrence Summers’s complaints about Trump’s tax proposal, expressed rather harshly in a Washington Post op-ed:

I have strong disagreements on tax policy with Republican economists such as Greg Mankiw, Glenn Hubbard and Martin Feldstein and with Treasury alumni such as Nick Brady, John Snow and Hank Paulson. Nothing I have ever heard or read from them seems absurd or dishonest in the way that almost everything coming out of this administration does.

We know enough to say that a tax-reform plan along the lines of the administration’s sketch would not substantially increase economic growth, would blow out the budget deficit and would make the United States an even more unequal place.

I think he exaggerates the role of the tax code in producing income inequality. I could list a dozen different policies that have probably been more significant including immigration policy, trade policy, and propping up the big banks during the financial crisis all of which were supported by Dr. Summers. He was also the Obama Administration’s Director of the National Economic Council when President Obama signed into law the single largest increase in the taxes of lower and middle income people in the history of the United States. I don’t recall his complaining about income inequality then. Should I mention his role in the Clinton Administration during which reforms which led to the enormous increase in executive compensation were enacted, China was granted Most Favored Nation trading status, and China was admitted to the WTO? He has also spoken in favor of the deindustrialization of the United States, one of the greatest factors in exacerbating income inequality. Under the circumstances I think he owes it to us to tell us what he supports rather than merely complaining about what he doesn’t like.

It’s too bad that Dr. Summers did not advocate for needed reforms to the tax code eight years ago when he had considerably more influence than he does now. Like the rest of the Obama Administration he took his eye off the economic ball and now he’s confronted with an administration whose priorities are very different from his.

1 comment… add one
  • Guarneri

    Larry Summers? Seriously?

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