Larry Summers and A Tale of Two Harvard Professors
Why can’t a smart man like Larry Summers bring even a bit of compassion and common humanity to his economic analyses?
August 13, 2013
As the U.S. political debate about selecting the next Fed Chairman meanders on, there is an important tale to be told about the lack of compassion that so characterized Larry Summers, one of the two leading candidates for the job. The contrast to fellow contender Janet Yellen could not be greater.
Case in point: the 2012 Aspen Ideas Festival, which prominently featured two Harvard professors as speakers during its always impressive range of panels.
To see the contrast, let us start with a discussion at the festival with a different Harvard professor, Robert Putnam, a famous author and sociologist, who is not a former Harvard president.
At some point in that conversation, Putnam, who wrote the book “Bowling Alone,” couldn’t contain himself anymore: “The only way we are going to solve this problem is by considering all children in America as our children.”
By that, he effectively meant that all children growing up in the United States, whether white, black, Hispanic or other, should be seen as members of our own families.
What was the reason for his emphatic and heartfelt call? Definitely not a bout of naive do-goodism.
In fact, the preceding discussion at the 2012 Aspen Ideas Festival had been about how the economic misery that was long thought to be largely restricted to black Americans has spread, to the point where it has fully gripped the white working class just as much as the African-American one.
The numbers are truly depressing. Even in the mid-2000s, before the recession, 47% of children living in America’s 50 biggest cities did not finish high-school. And 22% of all children growing up in America today live in poverty.
The poverty numbers for children of single mothers, often left without financial support by the men who fathered their children, are significantly higher.
As a result of broken homes, broken or rather non-existent families, parental drug use, alcoholism and boredom, fully one-third of the future U.S. workforce is expected to be dysfunctional in terms of having skills usable in the workplace.
They are basically unemployable because circumstance has rendered them incapable of holding down a job. After all, even jobs requiring only low levels of qualification do require a functional attitude toward work and a basic work ethic.
Such social and economic destitution was once thought to be the preserve of African-American urban ghettos.
Such despair, in Americans’ eyes, was otherwise just to be found in some Soviet cities, in the provinces far away from Moscow.
However, this syndrome has now penetrated America’s core. Suburban poverty grew twice as fast as urban poverty from 2000 to 2010, and a majority of metropolitan area poor now live in suburbia.
In many small towns in the Midwest, virtually all the manufacturing jobs, and the local jobs supported by them, are gone, gone and gone.
In political terms this means that the convenient, decades-old (if not centuries-old) problem-shifting mechanisms no longer apply.
In the past, leaders could assert or vaguely imply that we do not really need to care about poor African-Americans because they are the members of a different race and thus can’t be helped (“tough luck” for them).
Now, white Americans increasingly face the same social and economic afflictions.
While institutionalized racism still certainly affects minorities’ prospects, purported racial differences are no longer a plausible way to explain away all social and economic ills of non-white Americans.
In fact, that argument detracts from tackling broader economic issues.
The problems unraveling the social fabric of U.S. society can no longer be relegated to being solely a stubborn consequence of slavery, as they now cut across more than one demographic.
Later on during the same festival, another Harvard professor took the stage. This time, it is Harvard’s former president, Larry Summers.
The interviewer does his best to sensitize Mr. Summers to the rather desperate state of affairs encountered by ever-larger shares of Americans.
In his classic style, between sparks of intellectual brilliance and displays of utter disdain and bottomless arrogance (never mind a lack of social consciousness), Professor Summers explains why higher taxes can’t be part of the solution in the United States.
“You see, in Sweden, people are ready to pay higher taxes. There is a simple reason for this. All the people living in Sweden are … so Swedish,” he says, with a well-calculated effect to generate laughter from the large audience.
Then he goes on to explain that we here in the United States are different. Our population is ethnically very diverse.
The logical conclusion? Any time Americans are called upon to spend more in taxes, they have a sense that those monies are expended not on ” us,” but on “them.” They feel they get a raw deal.
That, the professor concludes, rather nonchalantly, makes it harder to deal with the problem.
And indeed, there is considerable truth to that.
There is a sense in the American electorate, well-engineered by Fox News and others, that has too many of people thinking that “our” taxes are just used to fund food stamps for African-Americans (and a few whites who “must” not be working hard enough), Medicaid and foreign aid.
The reality, of course, is very different. The true figures are far removed from the public perception.
In fact, the U.S. tax code stands out as one of the least effective among developed countries when it comes to transferring needed financial resources to poor people to lift them out of poverty and help them become productive members of society.
One would have thought that the speaker — who was, after all, a former U.S. Treasury Secretary during the Clinton Administration and top White House advisor under President Obama — would have pointed out those facts.
They are well-known even to people lacking Mr. Summers’ eminent pedigree as an academic economist.
Not so. Instead, he throws the audience some lumps. There is some evidence in the economics literature, he says, that people are more willing to pay state taxes, because they have a more direct sense of those monies being spent on them, and not “others.”
Why that should be so is left unexplained — and is hard to believe. The same convenient mechanism to demonize others as lazy and only oneself as deserving of tax benefits works at the state level the same way it does on the federal level.
All in all, the audience is regaled to a classic Summers performance. He tends to speak with no compassion for others at all and instead exhibits the callousness of the head of a major private banking operation.
He is eager to ingratiate himself with his audience in order to preserve the aura of collective superiority between himself and the audience.
There is just one problem: It is hard to imagine any private bankers being so callous and socially unconscionable as the former Harvard prez.
Impossible to imagine that this man was a top-level policymaker who served in two Democratic(!) administrations.
Nobody knows whether Mr. Summers’ curious mixture of diffidence and disdain is due to the fact that he has managed to use his intellectual brilliance to make himself part of the 1% class.
Thankfully, his attitude is not representative of the Harvard faculty body at large.
As his colleague Bob Putnam made clear, it is entirely possible to pair a high IQ with a social conscience and articulating the courage of one’s real convictions for society to do better, much better lest calamity hit.
Larry Summers, possibly the next Fed Chair, may be a brilliant economist, but he is not a compassionate one.
Larry Summers combines brilliance with utter disdain, bottomless arrogance and a lack of social consciousness.
Bob Putnam shows one can pair high IQ with social conscience to offer a vision of a society that does better.
Old excuses to ignore African-Americans' economic misery no longer hold when their plight afflicts all demos.
It is hard to imagine any private bankers being so callous and socially unconscionable as the former Harvard prez.