There are many reasons the average news reader might not like Larry Summers. A longtime friend of convicted predator Jeffrey Epstein, Summers deregulated the banking sector as Bill Clinton’s Treasury Secretary, helping to set the stage for the 2008 financial crisis. While serving as chief economist of the World Bank, he put his name to a memo suggesting industries dump toxic waste in Africa because it was “underpolluted,” later claiming the memo was intended as “sardonic counterpoint.” In 2005, while president of Harvard University, he posited that women’s brains weren’t well suited for math and science.
Less discussed, however, is how Summers worked during the Obama years to torpedo America’s last best shot to make itself a low-carbon society. The issue has become newly relevant in the past few weeks: As reported last week by Bloomberg News, Summers is now serving as an adviser to Joe Biden’s campaign. With Biden the presumptive Democratic nominee for the November presidential election, Summers could soon find himself in a position to repeat his mistakes.
Summers’s tenure in the Obama administration featured a number of questionable choices. As the incoming head of Obama’s National Economic Council in 2008, Summers famously misled the president-elect about the size of the stimulus package that leading experts—including fellow transition team member Christina Romer—urged was necessary, and kept him from even seeing the trillion-plus-dollar figures they recommended to avert skyrocketing unemployment. The recession was more painful and prolonged as a result. As reported by another transition team member, Reed Hundt, in A Crisis Wasted, he also specifically shot down several proposals from elsewhere in the inner circle about how the recovery should look.
As during the Clinton administration, Summers was leery of moving too quickly to curb carbon emissions, urging a lenient timetable for polluters; any real reforms, he reasoned, would have to wait for legislation. Hundt also writes that Summers rejected his proposal to have Obama’s stimulus create a green investment bank and build energy efficiency infrastructure and high-voltage transmission lines. This Green Recovery and Investment Program, or GRIP, as it was known, would have been more extensive than the roughly 10 percent of the stimulus eventually spent on clean energy. Summers thought it would create too much debt. He rejected the concept of creating new institutions, preferring a strategy of spending as quickly as possible, and saw the sole goal of the recovery as boosting demand and gross domestic product with a quick injection of federal cash. Staring down the barrel of double-digit unemployment in December 2008, Summers said, “Our economic problem is that the country has too much debt.”
Summers’s early, regimented focus on boosting consumer demand, Hundt wrote, meant he “effectively rejected a grand strategy of investing enough in clean power to replace carbon power,” fearing it would lower demand for fossil fuels. Instead, any direct stimulus spending would be “timely, targeted, and temporary,” neither making long-term investments in job creation nor biting into turf controlled by the private sector—for example, broadband or electricity. The government’s only job when it came to the high-voltage transmission lines Obama had been interested in building, he said, “is to remove regulatory obstacles.” Mostly that approach meant any public works spending got used on so-called “shovel-ready” projects like road repairs. In 2014, Summers called for an infrastructure bank that would privatize more of the country’s essential infrastructure. “He has a deist’s conviction in a clockwork economy that runs efficiently without government intervention,” Hundt wrote—a troubling quality in an era demanding large policy shifts to fight global warming.
Hundt’s assessment is supported by evidence from the Clinton years. Summers has had a special fondness over the years for profit-making when in the power sector. When California’s electricity prices began skyrocketing in late 2000, then–California Governor Gray Davis called on the Clinton administration, correctly suspecting Enron was manipulating prices. Summers reportedly told him to accept the prices the free market had wisely decided and warned about the dangers of overregulating Enron chairman Kenneth Lay.
Hundt wasn’t the only one to criticize Summers’s time in the Obama administration. In an account largely sympathetic to the administration and its green stimulus efforts, and to Biden in particular, Mike Grunwald’s The New New Deal—focusing on the green aspects of the American Recovery and Reinvestment Act—described Summers as a “born alienator” and “jealous turf warrior,” who resented not having been appointed to the Fed in 2010. At times, Grunwald added, he “seemed almost pathologically argumentative, and his meetings often devolved into academic cage fights that made consensus even less likely” than it already was, shutting out various members of the president’s inner circle. “The Summers style,” he writes, “was to debate new ideas to death—one of his mantras was the Hippocratic oath to do no harm—which created a bias toward inaction.”
Summers hasn’t been totally averse to new ideas, though. According to Bethany McLean’s book on the fracking revolution, Saudi America, Summers was specifically targeted by a group of domestic fossil fuel companies known as Producers for American Crude Oil Exports, who pushed to lift the crude oil export ban in 2015. As the group’s lead lobbyist, George Baker, told McLean, Summers was one of several then–former Obama-era officials he turned to to make the case to the White House. “We had a whole Congressional hearing that was all supportive testimony from former Obama Administration officials,” he said. Summers personally pitched the idea to the Brookings Institution, saying in 2014 that the “merits are as clear” for lifting the ban “as the merits with respect to any significant public policy issue that I have ever encountered,” calling it “an important test of the efficacy of the functioning of our democracy whether within the next nine months we will get to that correct solution.” As the Revolving Door Project has pointed out, the idea that emissions would be exported abroad had been Summers’s rationale nearly a decade earlier for calling the Kyoto Protocol and its binding emissions targets a failure.
When Summers has spoken up in support of climate policy, it’s been to back policies sponsored by ExxonMobil. In 2017, after years urging against rapid decarbonization, Summers and former Fed Chairwoman Janet Yellen began making media rounds in support of a modest carbon tax proposal put forward by the Climate Leadership Council, whose founding members include BP, ExxonMobil, ConocoPhillips, and Shell. Conveniently, the modest fee—far too modest, by many estimates —would also exempt the world’s biggest polluters from environmental regulations. “Some of my friends may not completely agree,” Summers wrote in a Washington Post op-ed endorsing the plan, “but I think the replacement of command-and-control regulation with a carbon tax is a positive step. It will reduce uncertainty and thereby encourage investment.”
It’s hard to know what the world would look like if Larry Summers hadn’t been invited back to play such a central role in the White House in 2008. The fallout from the last recession might have been shorter, and a different sort of policy response might have created a healthier economy on the other side, instead of a more unequal one. A substantial and wide-ranging recovery package might have saved countless families from falling through the cracks and bolstered Democrats’ popularity, maybe even forestalling the loss of the Senate, then the House, and eventually the White House. A massive green investment program and infrastructure buildout could have put the United States on the track to being a world leader on clean energy, saving precious time we have now lost. Counterfactuals are only so useful. But Summers’s track record from the last crash offers ample evidence that he should be kept a thousand miles away from how Democrats respond to this one.
Progressive campaigners, including Justice Democrats and the Sunrise Movement, have joined several other groups in urging Biden to excise Summers from his circle of advisers. If the presumptive Democratic nominee is interested either in a successful recovery from the looming recession or meaningfully reducing greenhouse gas emissions, he’ll take their advice and keep Summers far away from Treasury, the Fed, the National Economic Council, or anywhere else Summers might want another chance to screw things up.