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Summers almost gone: What will Autumn bring?

Mark Mardell | 02:18 UK time, Wednesday, 22 September 2010

Larry Summers

One of President Obama's most important advisors, is leaving the White House, and leaving a big hole. The director of the National Economic Council, Larry Summers, is going back to academia. He's the third member of the economic team to depart and by far the most important and difficult to replace.

Inside the White House he has apparently shown all the arrogance and self confidence you would expect from a man who went to one of America's top universities, MIT, aged 16 and became one of the youngest ever professors at another, Harvard. By all accounts when Obama calls a meeting, Summers dominates the room; brilliant and aggressive to the point of rudeness, impatient if he believes some one is waffling, delighted not just to pick, but smash holes, in other people's arguments, without necessarily coming up with a better plan himself. The President says he will miss him.

"I will always be grateful that at a time of great peril for our country, a man of Larry's brilliance, experience and judgment was willing to answer the call and lead our economic team. Over the past two years, he has helped guide us from the depths of the worst recession since the 1930s to renewed growth. And while we have much work ahead to repair the damage done by the recession, we are on a better path thanks in no small measure to Larry's wise counsel."

Summers is the prism through which the president sees economic policy. It is he who presents the regular morning economic briefings, synthesising and summing up the reports, statistics and views of other economic experts. He even blocked the revered former chairman of the Federal Reserve, Paul Volcker from having direct access to the president. Everything has to be filtered, and he is the filter. Although there have been clashes with his old special assistant, Treasury Secretary Tim Geithner, the two men seem to enjoy the intellectual rough house and were the driving force behind pouring money into the economy, in an effort to stop it going under. For conservatives who believe there is a big government takeover, they are main culprits.
Nothing sinister should be read into his departure. It doesn't signal a change of policy, it is certainly not a sacking, although their might be a mild bit of election tactics about the timing.

Mid-term burn out is predictable, and he was always expected to return to Harvard at some point. He's been at the centre of the maelstrom for three years, and he would claim, helped design a way out of it. Some sleep might be nice. Some on the left see him as far too close to Wall Street and will be glad to see him go. Those on the right who disapprove of the stimulus package and bailouts he helped design will also be cheering.

But with many economists worried about the direction in which the country is heading his replacement will be important, and scrutinised in minute detail to discover what their appointment says about future policy. I suspect for Obama it might be just as important to find a big enough personality to fill the gap he leaves. Summers almost gone, what the Autumn brings may tell us whether it is going to be a hard winter.


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