Friday, September 13, 2013

Hoping Elizabeth Warren Can Stop Obama from Nominating Larry Summers

Jeremy Grantham “When asked by Barron’s if we would learn anything from this ongoing crisis, I answered, ‘We will learn an enormous amount in a very short time, quite a bit in the medium term, and absolutely nothing in the long term. That would be the historical precedent.’"

Its quite amazing then (or not if you consider the above) that five years after the financial crisis, Larry Summers is apparently a leading contender for the Fed chair. Here is Larry Summers on one of his brainchildren, the repeal of Glass-Steagall:

''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century.''

This was not the only factor in the 2008 meltdown, but it was a key ingredient in its spreading. Not only have we not learned the lesson and reinstalled Glass-Steagall, grown adults are talking about bringing the architect of its demise back in a bigger role. If the Fed chair's job is to take the punch bowl away just when the party is getting started, then why bring someone in, who not only did not take it away, but poured gallons of Everclear in the punchbowl?

Luckily, not everyone has forgotten. Elizabeth Warren has serious concerns about Larry Summers at the Fed. Hopefully, she can stop Obama from making a serious blunder here, that alone would be a huge success.

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