Here’s what President Barack Obama‘s statement on Lawrence Summers‘s decision to withdraw his name from consideration to be the next chairman of the Federal Reserve would have looked like after 40 milligrams of Sodium thiopental:

“Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve.

Larry was a critical contributor to the radical deregulation that was one of many causes of the worst economic crisis since the Great Depression. It was in no small part because of his lack of expertise, false wisdom, and inept leadership that the economy crashed and burned and even today is still failing to be to back to its full growth potential.

As Treasury Secretary, he helped to pass the Commodity Futures Modernization Act. This turned derivatives into a unique financial instrument with no oversight, reserve requirements, mandated disclosures, or listing minimums. The CFMA all but guaranteed that Derivatives would eventually implode. Summers further contributed to the crisis by Summers by overseeing the repeal of Glass Steagall. With this firebreak between Wall Street and Main Street effectively removed, the financial conflagration of 2008 spread from Wall Street to every corner of the economy.

Further, his terrible advice and lack of insight is in large part the reason we see so little progress being made today — the lack of economic growth, the concentrated bank power, the still dangerous financial system and of course, the sub par job creation.

I will always blame Larry for the way he damaged my presidency. To anyone who  to seek his guidance and counsel in the future, please don’t make the same naive errors I did.

I think is quite a bit more truthful than the nonsense we heard earlier today.


UPDATE: September 15th, 2013, 7:30pm


Syria or Summers?

9.15.13 futes


Category: Federal Reserve, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

32 Responses to “Translated into Truth: On Summers Withdrawing Name”

  1. S Brennan says:

    Perhaps, Putin could help by writing another editorial in which he explains the facts to those still encumbered by ideological blinders.

  2. [...] You can read the Summers letter below.  President Obama has also issued a statement, but Barry Ritholtz has a more interesting version of how the statement should read if Obama were willing to tell the truth about Summers. [...]

  3. ironman says:

    I wonder if this means that we’ll have a snap rally in stock prices, much as we saw stock prices dip after Summers was first reported to be the President’s leading choice to be the next chair of the Fed?

  4. Concerned Neighbour says:

    As we witness the “markets” make yet another all-time high tomorrow on Summer’s withdrawal, a very tiny minority of us, perhaps even just a handful, will ask the question: “When the did the markets price in Summers as Fed Chair”?

    Before all is said and done, this central bank inspired mania could eclipse by a wide margin all those bubbles that came before it. It’s truly astounding to see.

  5. rd says:

    Unfortunately, I don’t think Obama wouldn’t babble that under sodium pentothal because I don’t think he believes Summers is wrong.

    A bigger reason than Summers’ bad advice, inability to play well with others, and misogyny to not nominate him is the fact that he is inherently a Democratic political animal. I think his nomination would have turned the Fed chair into a true political appointee like a cabinet post, which it historically has not been. That would be disastrous.

    • cbatchelor says:

      “…his nomination would have turned the Fed chair into a true political appointee like a cabinet post, which it historically has not been. That would be disastrous.”

      Very good point.

      But, as for what the President actually believes, who knows? But, I’ve worked with CEOs and business owners )and we’ve seen our share of leaders of nations) who set things up where it was impossible or not worth the effort to argue with them. Many (including myself) have been frustrated with Mr. Obama not ramming his agenda down everyone’s throat. But, regarding “bomb/no bomb” and picking a leaders of the Fed, it’s working well for us and for him.

      But, yeah, Barry piece was great. It was a tactfully tackless on-target rebuke to those (maybe the President, maybe not, we don’t really know and may never know) supporting Mr. Summers as Fed Chief.

    • Francisco Bandres de Abarca says:

      “I think his nomination would have turned the Fed chair into a true political appointee like a cabinet post, which it historically has not been. That would be disastrous.”

      I find your innocence refreshing. Take care of yourself out there.

    • Moss says:

      Without all the public outcry, mainly via the web sphere, Obama would have went with Summers. That is the real truth. I think is is correct to say that Obama simply wants to surround himself with political allies at this point. He is now part of the political elite, propagating the status quo is now what his mission is. He is in the club now. Washington has changed him forever.

  6. louiswi says:

    Barry nails it!!!!!!!!!!!!!!!!!!!!!!!!!!

  7. PeterR says:

    Right on, Barry, and I would guess that your brave “speaking truth to power” had some effect in Washington on this. Who knows?

    At least one _____ bag is out of the running.

    Unfortunately, Ike’s Military Industrial Complex will offer up another candidate . . .

  8. Francisco Bandres de Abarca says:

    Why did I have a palpable hunch that Barry would have some thoughts to share on this announcement?

    I never pondered the Summers candidacy much, as I have assumed for a couple years it is going to be Janet Yellen, and that it was always going to be Janet. Especially now, with the health care system being dragged onto the national ledger so that a direct tunnel to the Federal Reserve can be established. A fervent ‘easer’ will be necessary so that Congress can remain as fiscally responsible as it has been.

  9. ByteMe says:

    That’s how we feel about it… but — unfortunately — that’s not how the President sees it.

    On the other hand, he clearly dropped out because he was told he wasn’t going to be picked. That’s how he gets to save his ego for another day.

    • rd says:

      I think the Senate chaperones told Obama’s team that the candidacy was in trouble. They would struggle to get enough Democratic votes and these days that means the Republicans would definitely vote against him, even if they liked him, just to slam Obama with a high-profile defeat.

      • DeDude says:

        Not just way to many Democratic Senators ready to vote against, also way to many who would insist on using the hearings as a political platform to drag out a lot of old hidden or forgotten stuff. I am sure a fair number of banksters have been sending messages to both Summers and the White House that they did not want the kind of hearings Summers was facing.

  10. Robert M says:

    Kudos again. Are calls available on you BR?

  11. krice2001 says:

    Syria or Summers? Probably both, though I suspect more Syria. Also what rd said above.

  12. RW says:

    The Obama administration has a bad reputaton for letting good candidates swing in the wind: Time to quit screwing around and get ‘er done.

    Five reasons Obama should name Janet Yellen to chair the Federal Reserve

    …amid the heated back-and-forth over Summers, the strength of the case for Yellen has been obscured. At times, she’s been made out to be an anybody-but-Summers candidate. She’s not. Here are five reasons why.

  13. number2son says:

    Made my weekend after reading yesterday that Summers was the favorite to get this job. Obama taking baby steps towards credibility. Hooray!

  14. Petey Wheatstraw says:

    No matter. Regardless of who is appointed, there is still no solution, or even a potential solution, to the seeds of destruction that have already been planted.

    Fed tapering? For what purpose? To crash the markets? To cut off the gravy train to the criminal cabal? To stimulate employment? Raising interest rates? To make the USD stronger? With our level of public and private debt? How ridiculous does any of that sound?

    The only thing any Fed Chairman can do is to keep on with the regular injections of monetary heroin. We have a disease, and it’s terminal. The best we can hope is that in our next economic life, we’ll remember the lessons we learned in this one. Sadly, I don’t think reincarnation works that way.

    • Angryman1 says:

      Who cares if the FED tapers or not. The FED is only buying 85 billion a month of a 4 trillion dollar market.

      The FED is doing nothing, has been doing nothing since the bailout(when they actually did something). They could announce the whole “QE” program is done, the market goes down, then right back up once the suckers are cleared.

      The point of the chair is to try and get money moving into the economy outside these stupid games they are playing now. The FED does not have fiscal powers which inhibits them quite a bit. Maybe you just need a chairman that says the truth and that the global imbalances need to be cured, monetary policy is overrated(no matter what variety you like) and stop fawning over this institution. The FED itself is the primary dealers supposed policing of the system, which the primary dealers struggled to do in the 1863-1913 period before after the National Banking Act was passed in the Civil War era.

    • beaufou says:

      I often wonder if I am a demented pest but then I read Petey and I feel a little sane. Thanks.

      Keep the rates low to feed the beast, unemployment is good policy for low wages, war is a necessary evil for ill-gotten gains, buy houses and stuff you don’t need now or you’ll never get it…sheer insanity

  15. victor says:

    I recall Luis Rukeyser proposing back in the 80′s that the Fed be replaced by a computer. And why not? 1997 Deep Blue vs. Gary Kasparov and 2011 Watson vs. Jeopardy?

    • NoKidding says:

      Well written software efficiently achieves the desired result, so long as the objective is well defined and the programmer is competent.

      Unfortunately, if they did this several million humans would suddenly be able to read clearly the _actual_ goals of the central bank.

  16. rd, Unfortunately, I don’t think Obama wouldn’t babble that under sodium pentothal because I don’t think he believes Summers is wrong.

    I think you’re absolutely right about this . . .

  17. 4whatitsworth says:

    No war and no Summers let’s keep up the good work!

    Hopefully there are many like me who are sick and tired of government created headwinds..

  18. Re: the previous comment, also see this:

    “In July, the president advocated for Summers in a closed-door session with House Democrats and later said he had decided to mount the unusual defense of a candidate who hadn’t yet been selected because he didn’t like it when he saw a longtime adviser “getting slapped around in the press.”

    “I felt the same way when people were attacking Susan Rice before she was nominated for anything,” he said at a White House news conference in August. “So, you know, I tend to defend folks who I think have done a good job and don’t deserve attacks.” (Politico)

    So, there you go.

  19. Molesworth says:

    Don’t be distracted. Summers is a sde show. Interest rates are going up.

  20. [...] Reserve race – BBC Janet Yellen is again the frontrunner for Fed chair – CNN/Money Translated into Truth: On Summers Withdrawing Name – The Big Picture Ding Dong, the Witch is Dead, Summers Withdraws – Naked Capitalism [...]

  21. RePete says:

    Oh #@*& ! Now he’s going to run for president.