Tuesday, June 16, 2009

Larry Summers as Financial Dictator

WSJ appears to be backing up my suspicions that Larry Summers heavy hand played a major role in the financial regulatory restructuring that President Obama is about to announce:

Roughly once a week, sometimes more, the team met with Treasury Secretary Timothy Geithner or National Economic Council Director Lawrence Summers to run through ideas. Mr. Summers became known for his ability to shred and discredit any idea presented, forcing aides to scramble to defend their proposals.

"The challenge for many people...is that he can argue both sides of an argument better than anyone," said Diana Farrell, deputy director of the NEC.

Officials now feel that this exercise with Mr. Summers, which left some red-faced at the time, will make it much easier to defend their ideas on Capitol Hill.

As I wrote yesterday:

As Obama's top economic advisor, Larry Summers likely had major input on the restructuring plan. With the plan giving so much power to the Fed, one has to ask, Is Summers giving this power to Bernanke or is he designing a command and control observation deck from which he will eventually shout orders?
As things stand now, it appears to me that Bernanke is a one term Fed chairman. A Summers Fed chairmanship will, of course, mean even better access to the printing presses for Summers' tennis partner, David Rubenstein and the like.

This could take crony fascialism to an entire new level.

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