Summer’s Remarks

I want to thank Scott Sumner for bringing economist Lawrence Summer’s remarks from a lecture at Harvard to our attention. He takes note of “misconceptions” including

• the objective of economic policy is to maximize the number of jobs
• these have not been good decades
• the world hasn’t done well
• trade liberalization has caused problems for us
• the reindustrialization of the United States is the most important issue for the U. S. going forward

There is some confusion in the cited passages due to Dr. Summers’s switching back and forth unexpectedly from misconceptions to assertions but the piece is certainly interesting.

I would love to debate Dr. Summers. For example, riffing on the quoted passages

RESOLVED: the objective of economic policy at the federal level is to maximize the availability of goods at low
cost to consumers and firms

or

RESOLVED: for the last two decades economic policy has resulted in net benefits for the lowest third of income earners

I would say that welfare policy has been good for the lowest third of income earners but not economic policy which has been bad for them.

I agree completely with this claim:

And in some ways most fundamental and important, this month, we celebrate the 78th anniversary of a situation where there has been no direct war between major powers. You cannot find a period of 78 years since Christ was born when that was the case. So, the idea that we’ve been doing it all wrong is, I would suggest, a substantial misconception.

but I would attribute it to the preeminence of U. S. economic might over that period. Will that continue without the U. S. reindustrialization he dismisses as unrealistic?

I would promise not to take advantage of Dr. Summers’s youth and inexperience.

One thing I should mention. I think there is a difference between “net benefits”, “average benefits”, “median benefits” and so on unappreciated by Dr. Summers.