New York Times – I’m Larry Summers, I’m a professor of economics at Harvard University and formerly the Treasury secretary of the United States. I’ve been involved in following and advising with respect to global financial turmoil for the last four decades.
President Trump has proposed what are, by far, the most radical trade policies and probably the most radical, rapid change in economic policies that the United States has announced since the Second World War.
Markets have freaked out. I think most participants in markets would agree that if you look over the last 25 or 40 years, this past week was certainly among the top 1 percent in terms of scary developments. It’s probably not the worst — like the financial crisis or right after the pandemic — but it’s the next thing to that.
The big difference is that previous turmoil, previous crises, have come because something bad was happening in the world. This one is self-inflicted. When things looked scariest last week, the president announced a pause on a portion of the tariffs. That stanched a bit of panic, but it would be a big mistake to think we are out of the woods because tariff levels are still at once in century levels in terms of what they’re taking out of the economy and the punitive level of tariffs on China creates an entirely unprecedented situation. READ MORE