The Committee to Save the Rich
By recruiting notorious neoliberal economist Larry Summers to advise him on coronavirus policy, Joe Biden has shown that since 2008, liberal elites have learned nothing and forgotten everything.
Vice President Joseph Biden speaks to the media as Larry Summers and others listen during a meeting on the economy, on October 2, 2009 in Washington, DC. (Alex Wong / Getty Images)
Earlier this month, a coalition of progressive groups published an open letter to Joe Biden concerned with how he might earn young people’s support.
The letter’s authors were probably under no illusions that a politician like Biden would actually embrace many of their demands — which included adopting the broad framework of the Green New Deal, backing Medicare for All, and enacting sweeping reforms to America’s immigration and criminal justice systems. Nevertheless, in the context of a moment when Biden would be actively seeking to win over the younger and more progressive-minded voters he’d struggled so badly with during this year’s primary election, it was reasonable to think he might at least throw them a bone or two.
Among the most concrete (and easily realizable) demands the groups offered had to do with staffing — specifically a pledge they hoped Biden would make to “appoint zero current or former Wall Street executives or corporate lobbyists, or people affiliated with the fossil fuel, health insurance, or private prison corporations” to his transition team, advisory roles, or to cabinet.
Barely two weeks later, Biden as good as replied when it emerged he’d appointed none other than Larry Summers to advise him on economic policy — specifically on plans to revive the American economy after the coronavirus. Though Summers has a fairly well-established reputation as a right-leaning liberal, many probably won’t grasp the significance of the former Obama/Clinton staffer and Harvard president’s appointment. Coming when it does, the Biden campaign’s embrace of Summers stands in direct contravention to much of its official messaging around policy and party unity, the candidate himself recently promising to be “the most progressive president” since Franklin Delano Roosevelt. No less than Bloomberg seemed to recognize this obvious contradiction when it noted in its reporting on the appointment:
Summers’s involvement in Biden’s campaign . . . offered some reassurance [to] Wall Street that Biden is not moving too far to the left from the centrist positions that earned him his establishment support.
In the short term at least, this is an accurate assessment of Team Biden’s affiliation with Summers: an on-the-record fan of Milton Friedman whose image is practically synonymous with deregulatory policies and deference to Wall Street. Having worked to reduce the scale of infrastructure investment during the early days of the Obama presidency, Summers originally cut his teeth in government under Clinton, where he pushed to repeal Glass–Steagall — a move some have argued was a significant catalyst for the global economic collapse of 2008 — and advocated for a zealous privatization policy in the former USSR that ultimately had horrendous consequences. During the earliest days of the Obama administration, when activist governance was supposedly back in vogue and popular hostility to organized wealth was cresting, Summers would remark: “One of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way that they’re supposed to be treated.” Last year, he came out strongly against a wealth tax on the grounds that it might discourage the billionaire class from “investing [their] money in the ways they think are most productive” since, after all, they’d been “smart enough to accumulate it in the first place.”
There are certainly other, less ideological reasons to be angry about Summers’s appointment. Just as the Biden campaign evidently has no regrets about hiring Harvey Weinstein’s PR flunky Anita Dunn, it apparently doesn’t think Summers’s track record of misogyny or dubious connections are any kind of liability (or, perhaps, just plain doesn’t care). As president of Harvard, Summers cultivated a close personal and professional relationship with now-deceased sex criminal Jeffrey Epstein — a relationship that continued after Epstein’s initial conviction for soliciting sex from a minor. He was eventually forced to resign the presidency at Harvard amid a controversy prompted by remarks about female aptitude in math and science.
Clintonism Redux
The real significance of Summers’s appointment, however, is more long-term in nature and extends beyond the present election cycle. For two decades or more, institutional liberalism has functioned on the basis of a brain trust model that sees Democratic leaders delegate significant intellectual and decision-making power to an insular group of elites drawn from inside the gilded stockades of Wall Street and the Ivy League. During the Obama era, especially its all-important early days concerned with the financial crisis and ensuing recession, this reflex had observably dire consequences. Personnel is policy, particularly when staff are sourced from within a single, privileged socioeconomic milieu — in this case, one steeped in the core assumptions of Third Wayism and neoliberal economics.
As a result, even the relatively modest aims of the Obama presidency were aggressively scaled back during a key moment, significantly impairing Democratic electoral prospects alongside America’s economic recovery and the speed with which it was experienced by ordinary people. “The Obama presidency,” as Jacobin’s Branko Marcetic put it last year, “essentially became the second Clinton administration,” thanks to early staffing appointments like Summers and Treasury Secretary Timothy Geithner:
It was they and others like them who systematically scaled down Obama’s ambitions, narrowing the range of possibilities available to the president, and ensuring the road to recovery would be longer, slower, and ultimately incomplete. Expanding unemployment compensation was ruled out. Long-term infrastructure projects were rejected, unless they were smaller, “shovel-ready” ones that could “get into the economic bloodstream as quickly as possible.” . . . Sometimes the opposition to robust measures was nakedly ideological. Geithner and Summers opposed cramdown, or allowing bankruptcy judges to reduce the size of a mortgage, on the basis of property rights, worrying that ignoring the sanctity of contracts would undermine confidence in the lending system.
As an anonymous labor official told writer Thomas Frank in his book Listen, Liberal:
From the days of the 2008 Obama transition team offices, it was clear the Administration was going to be populated with Ivy Leaguers who had cut their teeth, and filled their bank accounts, at McKinsey, Goldman Sachs and Citigroup . . . The President, who was so impressed by his classmates’ intelligence at Harvard and Columbia, gave them the real reins of power, and they used those reins to strangle him and his ambition of being a transformative president.
Summers’s appointment therefore implies something more than just an obvious slap in the face to the progressive constituencies that supposedly have a place within the larger Democratic tent. Despite six straight years of electoral defeat after 2010 which culminated in the election of Donald Trump; despite a populist insurgency making two surprisingly close bids to capture the Democratic presidential nomination; despite spiraling inequality and rising oligarchy; despite a momentous global resurgence of the activist state in the wake of the current pandemic; little, if anything, about the core thinking embraced by the Democratic leadership appears to have changed since the 1990s.
As Democrat-aligned writers rush to assure us of their standard-bearer’s transformative ambitions, Joe Biden’s most significant appointment since his de facto nomination earlier this month suggests he intends to continue the by-now hallowed liberal tradition of deferring to conservative-minded technocrats drawn from a narrow range of backgrounds. If the scandal-plagued and increasingly elusive Biden is somehow elected president in November, we can therefore expect his administration to reflect the tired doctrines of a liberalism determined to stay frozen in amber, intransigent and unchanging even as it still tragicomically claims the label “progressive.”