The one-hundred day shindig is not only being celebrated by the president this week but by the entire White House hierarchy. Though a bit on the sleepy side, Assistant to the President For Economic Policy, Larry Summers has made it through three months relatively unscathed. But some are wondering if his economic plan just involves new clothes for the same old model.
Summers comments at a recent Inter-American Development Bank meeting underscored the type of reform he is advocating for the White House. Summers admitted the regulatory structure at the federal level has “in fundamental respects been a failure” but he signaled little in the way of how to fix it. Instead, he trumpeted the acute need for behavioral change in finance.
Seeing the underlying structures that promote high stakes risk left intact, several observers said Summers’ brand of rhetoric does nothing to avert a future for the US that resembles mid-90s Japan, a country that emerged from recession but in hardly in any shape one could call bullish. And the U.S. doesn’t nearly have the savings rates that Japan had to speed a recovery.
On just how he might see regulation over the long term, Big Think can only take Summers at his words. Knocking the easy deregulatory environment under Bush, Summers told us at a panel last year that what the American financial structure needs is “regulation for systemic stability.” How we would achieve such stability was an open question then as it seems to be now. Here’s Summers on big picture regulations.