Larry Summers: The Past Month May Go Down as a Turning Point for U.S. Economic Power

[newthinking]

(Note: LS is not popular with me either, but I did not see this news covered elsewhere on the site)

Larry Summers: The Past Month May Go Down as a Turning Point for U.S. Economic Power

" This past month may be remembered as the moment the United States lost its role as the underwriter of the global economic system . True, there have been any number of periods of frustration for the US before, and times when American behaviour was hardly multilateralist, such as the 1971 Nixon shock, ending the convertibility of the dollar into gold. But I can think of no event since Bretton Woods comparable to the combination of China’s effort to establish a major new institution and the failure of the US to persuade dozens of its traditional allies, starting with Britain, to stay out of it."

Summers is referencing the new Asian Infrastructure Investment Bank, China’s 18-month-old plan to start the first new multilateral development lender in decades. More than 40 countries applied to be founding members including China, Australia, Egypt, Ukraine, the U.K., France, Switzerland, India, and South Korea.

First, American leadership must have a bipartisan foundation at home, be free from gross hypocrisy and be restrained in the pursuit of self-interest. As long as one of our major parties is opposed to essentially all trade agreements, and the other is resistant to funding international organisations, the US will not be in a position to shape the global economic system.

Other countries are legitimately frustrated when US officials ask them to adjust their policies — then insist that American state regulators, independent agencies and far-reaching judicial actions are beyond their control. This is especially true when many foreign businesses assert that US actions raise real rule of law problems.

The legitimacy of US leadership depends on our resisting the temptation to abuse it in pursuit of parochial interest, even when that interest appears compelling. We cannot expect to maintain the dollar’s primary role in the international system if we are too aggressive about limiting its use in pursuit of particular security objectives.

Story here:
http://finance.yahoo.com/news/larry-summers-past-month-may-121922702.html

[JDPriestly]

1. We buy more than half our smaller consumer goods from China and exported a lot of our

factories to that country. We have promoted Chinese economic interests to the detriment of our own over and over and now we are surprised that China is surpassing us as an economic center in the world.

Summers is wrong. We need to stop the bank fraud, punish those who perpetrated it and earn anew our reputation as a country that is strong and relatively self-sufficient economically. We have to produce useful things like socks and shoes and fabric and tableware, etc.. the things we use day to day. Our own pharmaceuticals would be a good place to start. We need to stop importing so much stuff. If anything would make countries turn to China rather than us, it would probably be our huge balance of payments deficit which suggests that there is some problem with the valuation of our currency.

Summers -- just plain wrong. And it isn't the first time.

We would be stupid to sacrifice our Constitution and our sovereignty for the sake of some shaky, unreliable "position" in the world. We need to get our financial and economic house in order and our "position" in the world will take care of itself.

[merrily]

10. +1. Has he ever been right?

[Enthusiast]

12. Summers is always wrong. This group of malefactors is in the business of being wrong. Apparently.

JD, this is great and right on.

We need to stop the bank fraud, punish those who perpetrated it and earn anew our reputation as a country that is strong and relatively self-sufficient economically. We have to produce useful things like socks and shoes and fabric and tableware, etc.. the things we use day to day. Our own pharmaceuticals would be a good place to start. We need to stop importing so much stuff.

[bemildred]

2. It's too late Larry.

I mean it is nice that you guys finally noticed the need for some degree of integrity and honesty in our "leadership", but nobody is going to buy that stuff now.

[merrily]

9. If Summers gave two shits about integrity in our leaders he would, at long last, STFU.

[rpannier]

3. Opposed to all trade agreements

Which party is that?
Because they've been able to get an awful lot of Democrats to vote for Kor-US trade Pact, CAFTA, NAFTA...

[obxhead]

4. Get behind Obama and the TPP or else!!! oh noes!!1!1!1!!

[rpannier]

5. Pretty much

Like opposing fast tracking the TPP or being opposed in general is somehow opposed to all free trade agreements
It's why I despise Summers

[merrily]

8. Seriously. But, of course, he's bashing only the leftist voters of the Dem party, not Third Way

office holders.

[Warren Stupidity]

15. He is referring to the shadow alliance of the few remaining progressive democrats

and equally few actual libertarian republicans. It doesn't amount to much, but they represent the members of the national legislature that aren't simply at the beck and call of the kleptocracy.

[Helen Borg]

6. You have so much credibility left, Larry..

Last edited Wed Apr 8, 2015, 06:16 AM - Edit history (1)

Everybody will listen to you...

[newthinking]

19. Yep. A lot of "duh" factor involved. Just surprising to see him admit that the "free trade" mantra

is not working out quite as he expected.

[merrily]

7. Good ole Larry, still touting things like NAFTA and TPP.

Summers, an advocate to President Clinton of repeal of Glass Steagall, which lead to near economic collapse in the US and several other nations. Among other things.

And, he's most likely sexist to boot.

Ignore his ass.

[kelliekat44]

11. Yeah, our lawmakers are too invested in and involved in doing everything possible to obstruct Obama.

It's a wonder we are still a nation.

[PADemD]

13. If Hillary is elected President,

will Larry again have the President's ear?

Oh God, I hope not.

[Warren Stupidity]

16. if not Summers then surely another equivalent wall street unit.

[Turbineguy]

14. Vote for republicans

you get this.

[newfie11]

17. The BRICS are coming or so it seems

#7: Saudi Arabia Likely to Abandon Use of Petrodollar in Dealings With China
Who imports the most oil from Saudi Arabia? It is not the United States, it is China…Saudi Arabia and China have teamed up to construct a massive new oil refinery in Saudi Arabia…so how long is Saudi Arabia going to stick with the petrodollar if China is their most important customer?
2012: The Beginning of the END for the U.S. “Petrodollar”!


http://www.munknee.com/shift-from-u-s-dollar-as-world-reserve-currency-underway-what-will-this-mean-for-america/

http://www.financialarticlesummariestoday.com/

[CTyankee]

18. Paul Krugman isn't too worked up about it...

so unless that changes...I'm going with Dr. K...