At IOP, Lawrence Summers Urges Fiscal Spending
University Professor Lawrence H. Summers, who was director of President Obama’s National Economic Council after serving as the president of Harvard, urged that the U.S. government not cut spending in the face of ongoing fiscal negotiations in Congress.
Speaking at the Institute of Politics yesterday, Summers commended Obama’s preference to “err on spending too much rather than err on spending too little.”
Harvard Kennedy School Professor David R. Gergen, a former presidential adviser, hosted a conversation with Summers at the John F. Kennedy, Jr. Forum that focused on his two-year stint in Washington, D.C., before he returned to Harvard in January.
Now back in Cambridge, the former University president reflected on the difference between working in an academic environment and in Washington.
“In a university setting the focus is to find out what the best policy is,” Summers said. “In Washington, everyone wants to feel that they had an important impact on policy and prove this to their constituents.”
But Summers also joked about his early departure from his post as University president.
“I have not always been successful in every position I have held,” he said.
In yesterday’s conversation, Summers focused on the current U.S. financial troubles and the changing nature of employment for middle and low-income citizens.
He reassured the audience that the country’s economic difficulties are “manageable” compared to the problems other countries currently face, citing the recent natural disasters that struck Japan and China’s ongoing struggles to maintain high standards of living for its citizenry.
“I think that we in the United States have a tendency every decade to decide that there is a global power stronger than us and assume that it surpasses us on many levels,” Summers said.
“Today we have this tremendous apprehension about China. It would be helpful for Americans to have faith in the resilience of our country,” he said.
The U.S. has persevered through much greater crises in the past, Summers assured, such as the Great Depression and World War II.
“History would have judged us badly if we had allowed ourselves to fall into another Great Depression,” Summers said. “And it doesn’t look like we will.”
But Summers said he was concerned about a growing income gap in the United States.
“When I ask myself what I worry about in the United States in 2030, I worry most about what increased inequalities will do to the legitimacy of our system,” he said.
He said that the workforce has shifted, as many low-skilled workers may have to adapt to new forms of employment to retain a satisfactory standard of living.
Jobs for middle and low-income citizens are going to be focused “more on what your brain can do and less on what your hands can do,” he said.