Former Treasury secretary and Harvard president, Lawrence Summers is advising Barack Obama on matters of economic policy. He spoke this morning at the Greater Boston Chamber of Commerce.
Summers presentation was well-organized and strongly delivered (without notes.) He said the new president will face five major challenges:
1. Mitigating the Financial Crisis — the new president will have to find a way to keep credit flowing. He cited a program he started at Harvard where banks covered tuition and living expenses for graduate students, killed by the bank during the last month.
2. Reforming the Economic System — America tends to have economic crises every three years. The new president will have to figure out a way to balance risk better. He hinted at a “clearing house” or “exchange for derivatives.”
3. Addressing Income Inequality — He said there had been a 700% transfer of wealth to the top 1% in recent years. He urged returning to tax levels of the 1990s.
4. Confronting the Health Challenge — He said he didn’t see a single-payer system in the cards unless another Clinton-style health care reform effort failed.
5. Meeting Globe Energy and Environmental Needs– More clean tech, less reliance of Middle Eastern oil.
Here’s what he had to say about Obama’s campaign: “I have enormous admiration for Senator Obama and the campaign he’s run…I’ve never seen one that is as calm, methodical…as lacking as leaks as the 1 McCain has run…It speaks enormously to his managerial and leadership capacity.”
He concluded his remarks with a curious remark: “Rationalizing our approach to the Middle East has the benefit of freeing up resources to other parts of the world.”
I assume he was referring to the war in Iraq, but he could have been very easily referring to foreign aid to Israel and Egypt. Given Joseph Biden’s recent comments about a looming self-generated foreign policy crisis in the future, who knows?