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Yoshikami: Farewell Larry, Hello...Who???

Larry Summers is off to Harvard and back to academic life far away from the cauldron known as the White House. During his time with the administration, he has been involved in helping resurrect the US economy from it’s deepest downturn since the Great Depression. He’s been in the center of controversy as many programs have been put in place and is no doubt ready for some time away from the spotlight; maybe.

We shall see.

Summers has been a major proponent of the policy to stimulate the economy through governmental intervention. This has been a controversial path that many Republicans have found unacceptable. In fact, some have suggested it borders on the edge of Socialism. For that reason, many in the GOP will no doubt celebrate Summers’ transition to private life.

What can be said in his defense is that he took a stand and was willing to confront difficult challenges. His views were often controversial but you knew where he stood. There’s something to be said for transparency. Even if you disagree at least you know the positions held (admittedly small solace for his many critics).

Lawrence Summers, Director of President Barack Obama's National Economic Council
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Lawrence Summers, Director of President Barack Obama's National Economic Council

So now what in terms of economic guidance in the White House?

Does this mean Paul Volcker’s voice will carry a greater weight with President Obama?

Will his replacement seek a less partisan stance when confronting the many economic challenges that remain?

And will the new appointee focus just as much on deficit cutting measures as deficit increasing stimulus programs?

What action is taken in terms of future appointments are important as it will likely influence the course of administration policy.

Let’s hope that whatever direction the President chooses, that clarity will be a primary goal as the important question is asked; How will we climb out of the Great Recession and what is the brighter path for the American economy?

We need a plan and it needs to be clear.

What’s lacking in the discourse today is a true plan that is understood by all Americans. And that lack of clarity creates uncertainty. The LAST thing we need in the economy right now is uncertainty.

As investment managers, we work constantly to reassure our clients about their personal financial future. As you might imagine, it’s a full time job given the drama we have experienced for the last several years. Here’s hoping that at last the governmental message will be focused and understandable, bipartisan, and address the need to stabilize the economy while at the same time, getting our fiscal house in order (LESS DEBT!!!!!!).

We need this perspective now more than ever.


Michael A. Yoshikami, Ph.D., CFP®, is Founder, President, and Chief Investment Strategist of YCMNET Advisors, Inc., a registered investment advisory firm (www.ycmnet.com). He oversees all investment and research activities of YCMNET. He is a respected lecturer speaking frequently on market issues, tactical asset allocation, and investment strategy. Michael and YCMNET were ranked as one of the top 100 investment advisors in the United States for 2009 and 2010 by Barrons. He appears regularly on CNBC and CNBC Asia and can be reached directly at m@ycmnet.com.