Larry Summers ,Professor Pants-on-Fire: Comment By William Greider (Nation)

[Mari333]

April 23


Summers's claims about what caused the banking crisis were, likewise, aggressively misleading to plain deceitful. "Regulators didn't have the specific mandate for the consumer." Wrong. The Federal Reserve and other agencies had plenty of legal authority to protect consumers. They chose not to use it. Their dereliction actually occurred on Summers's watch, when he himself was Treasury secretary under Bill Clinton.

"Regulators didn't have authority in a comprehensive way to monitor the derivatives market." This is a flaming lie. The principal regulatory agency--the Commodity Futures Regulatory Commission--was actually preparing to impose stricter oversight on derivatives in the late 1990s when Larry Summers stopped it. Summers and Republican allies intervened in 2000 with legislation that castrated that agency and prohibited it from acting further. Derivatives exploded thereafter.

When Summers was finally asked about his own responsibility for encouraging the dangerous financial instruments, he responded with a mouthful of double talk. "You know, the situation's changed hugely.... So people were actually focused on a very different set of issues." Summers even tried to make it sound like he personally had wanted to tighten the oversight, but was blocked by "Congressional opposition."

Liar, liar, pants on fire. If Obama wants to have an economic adviser so loose with the truth, that's his choice. But if the president wants his own words to be taken seriously, I suggest he keep Larry Summers off television










http://www.thenation.com/doc/20100510/greider2