Steve Schwarzman Laughs at Larry Summers

Politico's Ben White reports Steve Schwarzman's reaction to Larry Summers' job growth editorial:

"M.M. hears that at yesterday’s executive meeting, Blackstone chief Steve Schwarzman took a shot at former NEC Chair Larry Summers’ FT column calling for a number of actions to spur job growth, including expanding the payroll tax cut to employers. “I thought I was looking at a Saturday Night Live script,” Schwarzman said, according to our source. “Who was in charge the past two years?” "

Now I know that Schwarzman was half-joking here. But his half-serious point is that there's just something off about a former Obama administration official prescribing economic policies while the Obama administration is running things. If Summers has the solution to our economic doldrums, wouldn't the time to have advocated it been while he was in the administration?

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Actually, we know that Summers was advocating the Obama administration focus on job growth while he was in the administration.

The problem was just that Obama was persuaded to focus on the deficit by Tim Geithner and Peter Orszag.

From the Washington Post:

By early last year, Geithner was beginning to gain the upper hand in a rancorous debate over whether to propose a second economic stimulus program to Congress, beyond the $787 billion package lawmakers had approved in 2009.

Lawrence Summers, then the director of the National Economic Council, and Christina Romer, then the chairwoman of the Council of Economic Advisers, argued that Obama should focus on bringing down the stubbornly high unemployment rate. This was not the time to concentrate on deficits, they said.

Peter Orszag, Obama’s budget director, wanted the president to start proposing ways to bring spending in line with tax revenue.

The economic team went round and round. Geithner would hold his views close, but occasionally he would get frustrated. Once, as Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was “sugar,” and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt....

In the end, Obama signed into law only a relatively modest $13 billion jobs program, much less than what was favored by Romer and many other economists in the administration.

So, you see, it's not a Saturday Night Live skit. It's more something out of Lord of the Rings, where Grimma Wormtongue's counsel works to weaken the regime King Theoden of Rohan.


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