In an interview om Bloomberg Daybreak: Americas, Harvard University Charles W. Eliot Professor Lawrence Summers discusses his editorial on the United States’ global leadership under President Donald Trump. He speaks with Bloomberg’s David Westin on “Bloomberg Daybreak: Americas.” (Source: Bloomberg)
The Boston Globe
JUNE 05, 2017
THE TRUMP ADMINISTRATION has announced its first full budget, which calls for the elimination of federal funding for after-school and summer programs for low-income communities, known as 21st Century Community Learning Centers.
This cut would have drastic effects for working families. Federal funding for after-school programming supports 1.1 million students nationwide. An overwhelming body of evidence says that these programs help to close the opportunity gap in education, increase student academic and behavioral outcomes, and reduce school absences.
These programs are often a lifeline for working parents, especially working mothers. As Federal Reserve chair Janet Yellen recently observed, programs that enable women to balance work and family life help foster greater workforce participation, which has real economic consequences: Increases in women’s workforce participation from 1948-1990 expanded the potential growth rate of real GDP by a half percentage point per year.
Federal investments in after-school programs yield a significant return on investment. The total cost of the 21st Century Community Learning Centers program is only $1.2 billion, approximately 0.2 percent of total federal spending, and only one-20th the expected cost of Trump’s border wall. Unlike the wall, federal investments in after-school programs yield a 3-to-1 return, according to state and national reports, by increasing students’ earning potential and reducing crime and other social safety net expenses.
At Citizen Schools, a national after-school organization that serves 5,000 students in five states, we have seen firsthand the difference that these programs make in young people’s lives. Consider a student named Nelson, who attends Joseph A. Browne Middle School in Chelsea. Nelson has struggled during the traditional school day. His mother works two jobs. She couldn’t afford the academic and extracurricular supports that Citizen Schools makes possible, so she relies on federal funding to ensure that Nelson is in a safe, enriching space after school. That matters, because these supports help change a student’s academic trajectory: On average, students at Citizen Schools are 25 percent more likely to go to college and twice as likely to graduate with a four-year college degree, as compared with their peers. At Citizen Schools, Nelson has thrived.
Even for those of us not currently juggling the demands of our children’s education with the obligations of work, we need to ask ourselves, as a society: Do we have a responsibility to help educate our neighbor’s children? Among those members of Congress who ultimately will be responsible for accepting or rejecting the administration’s proposal, we hope that the answer is a resounding “yes.”
We need to recognize as a nation that education is about more than the school day and school year. It is about what happens before children are ready to enter school, what happens during half the days in the year they are not in school, what happens after school ends and before a parent comes home, and about how students transition from school to work. Yes, school reform is essential. But it is not enough to meet the challenge of opportunity for the next generation. We must work more broadly to assure adequate education for all our kids.
The reality is that a significant majority of Americans support federal funding for after-school programs because those programs measurably benefit students, working families, and the broader economy — and that’s good for all of us.
Lawrence H. Summers is president emeritus of Harvard University and former secretary of the US Treasury. He chairs the Board of Citizen Schools. Emily McCann is the CEO of Citizen Schools.
In an interview, Here & Now‘s Jeremy Hobson talks with Larry Summers, former U.S. treasury secretary and president emeritus of Harvard University, about what Trump’s decision means for the country and the economy.
When President Trump announced that the U.S. will withdraw from the Paris climate accord, he explained that it was because the agreement is bad for American workers and is harming the U.S. economy.
(Source: WBUR)
Published by Matthew J. Belvedere, CNBC
June 1, 2017
In an interview, Former Clinton Treasury Secretary Larry Summers told CNBC on Thursday the U.S. would benefit economically and on the world stage by staying in the Paris climate accord.
Summers said on “Squawk Box” he “never imagined” an administration that’s “way to the right of Exxon on a fossil fuel issue.”
The oil giant has reiterated its support of the Paris deal ahead of President Donald Trump‘s expected announcement Thursday afternoon to pull out of the climate agreement.
Secretary of State and former Exxon CEO Rex Tillerson has advocated staying in the agreement, which involves nearly 200 countries. Only Syria and Nicaragua are not part of the accord.
“How can it be the right thing for the United States to create a world where there are two clubs: Everybody else and the United States, Syria, and Nicaragua?” Summers asked.
During the 2016 presidential race, Trump had campaigned against the accord, which was fashioned under Barack Obama‘s administration. The former president committed the U.S. to reducing its greenhouse gas emissions by 26 to 28 percent below 2005 levels by 2025, and pledged $3 billion to a fund to help developing nations meet their Paris agreement goals.
Summers, a former Obama economic advisor, said the Paris deal is not perfect. “It’s not the agreement I would have written.” He said he favors “more emphasis on just raising the price of carbon and less emphasis on command and control regulation.”
He said he would support amending the deal, but abandoning it without anything in its place would put the U.S. in the position to just “take our chances with the climate lottery.”
“That seems to me to be profoundly irresponsible,” he said.
“The right way to understand the Paris agreement is that it’s not the once-and-for-all resolution forever,” Summers said. “This is the first stage in a process to global commitment to address what the vast majority of scientists think is one of the most pressing security problems facing mankind.”
In addition to political pressure, more than two dozen CEOs signed a letter that appeared in full-page ads Thursday in The New York Times and The Wall Street Journal.
On CNBC’s “Squawk on the Street” on Thursday, Hewlett Packard Enterprise CEO Meg Whitman, a signatory on the letter, said leaving the Paris agreement would put the United States behind in jobs in the future. The tech billionaire, who ran an unsuccessful 2010 GOP gubernatorial bid in California, ended up supporting Democrat Hillary Clinton for president in the 2016 election.
Another signatory, Salesforce co-founder and Clinton supporter Marc Benioff tweeted out the letter on Wednesday evening.
Tesla co-founder Elon Musk didn’t sign the letter but threatened on Wednesday to stop advising Trump if he were to announce a withdrawal. Musk, founder of SpaceX, is on Trump’s manufacturing jobs council, strategic and policy forum and infrastructure council.
The White House was not immediately available to respond to CNBC’s request for comment.
(Source: Matthew J. Belvedere, CNBC)
In an interview with CNN Money, Larry Summers says he never imagined Exxon would be more progressive than the White House on climate change. Mr. Summers served as President Clinton’s Treasury Secretary, President Obama’s top economic adviser, and Chief Economist at the World Bank.
(Source: CNN Money)
Larry Summers is doubling down on his secular-stagnation hypothesis.
The Harvard economist and former Treasury secretary first offered the bleak diagnosis in November 2013 at an International Monetary Fund conference. The U.S. and much of the rest of the world was suffering from a chronic shortage of demand and profitable investment opportunities, he argued. There wasn’t any interest rate that would produce healthy growth (given that rates can’t go much below zero).
At a recent academic conference at the Federal Reserve Bank of San Francisco, I asked Mr. Summers how his secular stagnation hypothesis looks today, three and half years after he inserted a Depression-era phrase into today’s debate about the economic outlook. Many economists have had their doubts about his gloomy hypothesis, and not all has gone wrong with the U.S. economy. Unemployment, for example, has fallen to 4.4% from 7.2% in 2013, leading to a rise in wages.
May 26, 2017
An interview with Maria Bartiromo on Fox Business, Larry Summers discusses why he dislikes President Trump’s budget.
(Source: Fox Business)
The Lancet Global Health
May 18, 2017
Published by Sabri Ben-Achour, Marketplace
May 11, 2017
In an interview with The Economist, President Trump said it’s OK that his tax plan would increase the deficit, because it wouldn’t do so for very long. He said it would “prime the pump” of the economy. And then he said he came up with that phrase.
For the record, Donald Trump did not invent the phrase “priming the pump” in an economic context, or really any context.
“Pump priming goes all the way back to the 1930s,” said Peter Sokolowski, editor-at-large at Merriam-Webster. “We do have evidence of, for example, FDR using it during the Great Depression, talking about his own policies.”
In the olden days, like hundreds of years ago, you’d have to put some water into a pump to get it started. In economics, pump priming is a standard Keynesian concept.
“A burst of government spending or a burst of tax cutting can start there being more spending, which leads to more income, and the economy starts revving up,” said Larry Summers, who teaches economics at Harvard.
But this metaphor is usually used when the economy is in the dumps, Summers said, not in a situation like we have now with 4.5 percent unemployment and strong corporate profits.
“It’s pretty unusual to talk about priming a pump when the pump has been actively pumping water for a long time,” Summers said.
The other thing is that priming the pump, well, it’s more of a phrase that Democrats would use.
“It is an odd phrase for a Republican president to use,” said Chris Edwards, an economist with the Cato institute. Democrats would use it to describe stimulus plans — increasing spending or income tax cuts.
“Trump’s tax plan is generally a supply-side tax reform plan,” Edwards said.
That means it focuses on cutting business taxes and deregulation. That usually has a different and contested metaphor: trickle down.
May 9, 2017
Bloomberg Markets AM with Pimm Fox and Lisa Abramowicz.
GUEST: Former Treasury Secretary Larry Summers, President Emeritus and Charles W. Eliot University Professor at Harvard University, discusses bank regulation, US Treasury policies, and outlook for a recession. (Source: Bloomberg)
Published by Jeff Cox, CNBC
April 27, 2017
President Donald Trump‘s plan to roll back taxes in the hope that doing so will generate robust economic growth with little impact on debt and deficits is “absurd,” former Treasury Secretary and White House economic advisor Larry Summers said.
In fact, Summers added in an interview with CNBC, that had he been asked to present such a plan with the notion that it would pay for itself, he would have refused.
“If I had been asked by the White House to assert a proposition as demonstrably false as the claim that this plan would produce revenue, I would have resigned rather than put the credibility of the department behind a proposition that no one with real experience would believe was true,” he said.
Summers served as head of the Treasury during the Bill Clinton administration and as senior economic advisor to President Barack Obama.
The cornerstone of Trumps’ economic agenda is that, as well as simplification of the tax code, it will unlock growth, which was strong under Clinton but plodding under Obama.
In a proposal rolled out Wednesday by Treasury Secretary Steven Mnuchin and Gary Cohn, Trump’s chief economic advisor, the number of individual tax brackets would be cut to three and the levels for wage earners across the board would be reduced.
In addition, the plan would slash business taxes and give companies a much lower tax rate for profits earned overseas and brought back to the U.S.
Summers said he was surprised at the apparent lack of thought in a proposal that was presented as a single-page document.
“Most presidential campaigns during the primaries, when they put out a tax plan, they put out more than one page. They put out some analysis, some models, some careful articulation of the proposal and estimate its effects,” he said.
“There’s none of that coming from the administration, and yet there’s this confident statement that it will pay for itself,” Summers added. “I don’t know how they could possibly know without having done economic work.”
Comparing the Trump tax-cut plan to those launched by predecessors including Ronald Reagan and George W. Bush, Summers said there are arguments on both sides about their net effects.
However, he said, there is “no — no serious read of the evidence to suggest that they came close to paying for themselves by stimulating economic growth.”
Summers said sending out the Treasury secretary to make that claim undermines the office.
“I just don’t understand what could cause an administration to put its secretary of the Treasury in a position to assert something … that is generally regarded by economists as absurd,” he added.
Still, White House budget chief Mick Mulvaney said Thursday that the Trump administration intended for its initial tax plan to be vague and that assessing its long-term impact is difficult right now.
Published by David Brancaccio, Marketplace
April 19, 2017
My some estimates, nearly half of the work in America could be done by machines and software using current technology. Look out five, ten, twenty years and the impact of technology could be even more radical. All this week on the Marketplace Morning Report, we’re looking at ways to take advantage of automation in the workforce — rather than letting it take advantage of us. For instance, what if the government put a tax on robots? It’s an idea that philanthropist and Microsoft founder Bill Gates has proposed.
“Right now, if a human worker does $50,000 worth of work in a factory, that income is taxed,” Gates told Quartz in February. “If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”
Lawmakers in the EU voted down a similar idea earlier this year. And for now, it doesn’t look like there’s much support in the U.S. either. Former Treasury Secretary Lawrence Summers told us he thinks the idea is illogical.
“At the practical level, why robots?” he said. “Word processing programs displace secretaries; dishwashers, the automated kind, displace dishwashers, the human kind; electricity means many fewer people in jobs carrying things from one place to another. Why would one single out among possible technologies, robots?”
Additionally, Summers said, the notion doesn’t make sense from a philosophical standpoint.
“There’s a deeper question, which is, should it be the objective of policy to encourage more rapid technological improvement or should it be the objective of policy to retard technological improvement?” he said. “It’s always seemed to me that enlarging the pie as much as possible and then figuring out a set of policies that are directed at making sure the pie is allocated in a fair way is a much better strategy than seeking, for some other reason, to slow the growth. I think the best course is not to be an ostrich and pretend we can ignore disruption. Too many people do that.”
He pointed to the comments from current Treasury Secretary Steven Mnuchin, who said the Trump administration wasn’t concerned about robots.
“I was shocked and appalled when the treasury secretary said that artificial intelligence destroying jobs wasn’t on the radar screen of the administration because it was 50 to 100 years off,” Summers said. “I thought that was an extraordinary and clueless statement, but having said that, I don’t think simply trying to resist or stop technology is a viable strategy. I don’t think it would be a viable strategy if it was adoptable on a global basis, but it’s even less viable for a single country in international competition.”
April 12, 2017
Former U.S. Treasury Secretary Larry Summers discusses U.S. economic growth and proposals from the Trump administration. He speaks with Bloomberg’s David Westin on “Bloomberg Daybreak: Americas.” (Source: Bloomberg)
March 30, 2017
A conversation about the economy and Trump’s plans for tax reform with Larry Summers, president emeritus of Harvard University and former treasury secretary under President Clinton. (Source: Charlie Rose)
March 30, 2017
Published by Matthew J. Belvedere, CNBC
The highest consumer confidence reading in more than 16 years and the postelection stock market rally may not translate into more robust economic growth, former Clinton Treasury Secretary Larry Summers told CNBC on Thursday.
“If you use the standard of what the administration has held out the hope for, 3 to 4 percent growth, there is nothing in any data suggesting we’re moving towards that 3 to 4 percent growth standard,” Summers said on “Squawk Box.”
Summers, also a former economic advisor during Barack Obama‘s presidency, reiterated concerns that optimism for faster economic growth due to President Donald Trump‘s promised agenda of tax cuts and deregulation might be a “sugar high.”
“If you continue to have the degree of division, confusion, rancor and uncertainty in Washington that we’ve seen, we may not see those sentiment changes last as long as many people thought they would a couple months ago,” Summers said.
The Republican Party’s “stunning” lack of unity on repealing and replacing Obamacare undermines Trump’s entire agenda, he argued.
“I would be cautious about any big revision to the upside in forecasts” for economic growth, Summers said, also partly due to the Federal Reserve‘s desire to prevent the economy from overheating. The Fed already put one interest rate hike on the board for 2017 earlier this month. Two or three more rate increases this year are being debated in the markets.
March 30, 2017
Published by Matthew J. Belvedere, CNBC
The GOP’s “stunning” lack of unity on repealing and replacing Obamacare undermines President Donald Trump’s entire agenda, former Clinton Treasury Secretary Larry Summers said Thursday.
The failure calls into question whether Trump and GOP leaders in Congress can deliver on the pro-economic growth promises that have supported the stock market and buoyed business and consumer sentiment, Summers argued on CNBC’s “Squawk Box.”
Summers, a former economic advisor to President Barack Obama, also said he’s concerned that a fight over funding Planned Parenthood could lead to a government shutdown. House Speaker Paul Ryansuggested earlier this week the House would not try to defund Planned Parenthood while working to approve spending to keep the government open beyond April 28.
Couple fiscal uncertainty with questions about Russia’s interference in the 2016 election, and there are potential pitfalls on multiple fronts, said Summers, president emeritus of Harvard University.
“There’s a huge set of leadership issues around the president’s ability to lead in the way presidents do that comes before, and is separate from, whatever add-on you get from Russia investigations,” Summers said.
On Thursday, Russian President Vladimir Putin denied accusations that Moscow meddled in U.S. elections. During a panel moderated by CNBC, Putin said, “All those things are fictional, illusory and provocations, lies.”
In a keynote address on November 30, 2016 at the World Innovation Summit for Health (WISH) in Doha, Qatar, Summers talked about the Future of Aid for Health. Summers said, “I have always believed that economics is a moral science because it is so centrally involved with choices that directly affect human well being. And cancer at age 30 reinforced for me that no choices centrally affect human well being as those involving health. Economics is defined as ‘the study of the allocation of scarce resources among competing ends.’ Few if any resources allocation choices are as consequencial as those involved with health care. I have become convinced that even as we fight for increases in global health aid, there is a need for a major reorientation of the global aid for health effort away from financing service delivery in individual countries and towards global priorities.”
Listen to The Axe Files, a podcast with David Axelrod, about growing up in a family of renowned economists, what did and did not cause the financial crisis in 2008, and the economic implications of Trump’s policy proposals.
Sometimes small stories capture large truths. So it is with the fiasco that is the repair of the Anderson Memorial Bridge, connecting Boston and Harvard Square. Rehabilitation of the 232-foot bridge began in 2012, at an estimated cost of about $20 million; four years later, there is no end date in sight and the cost of the project is mushrooming, to $26.5 million at last count. Read more
In the May/June 2016 issue of Foreign Affairs, Summers and Mahbubani explore the case for global optimism. The essay states, “Historians looking back on this age from the vantage point of later generations, however, are likely to be puzzled by the widespread contemporary feelings of gloom and doom. By most objective measures of human well-being, the past three decades have been the best in history. More and more people in more and more places are enjoying better lives than ever before.” Read more
The global pandemic response has typically followed cycles of panic followed by neglect. We are now, once again, in a phase of neglect, leaving the world highly vulnerable to massive loss of life and economic shocks from natural or human-made epidemics and pandemics. Quantifying the size of the losses caused by large-scale outbreaks is challenging because the epidemiological and economic research in this field is still at an early stage. Research on the 1918 influenza H1N1 pandemic and recent epidemics and pandemics has shown a range of estimated losses (See full report here).
A limitation in assessing the economic costs of outbreaks is that they only capture the impact on income. Fan and colleagues recently addressed this limitation by estimating the “inclusive” cost of pandemics: the sum of the cost in lost income and a dollar valuation of the cost of early death. They found that for Ebola and severe acute respiratory syndrome (SARS), the true (“inclusive”) costs are two to three times the income loss. For extremely serious pandemics such as that of influenza in 1918, the inclusive costs are over five times income loss. The inclusive costs of the next severe influenza pandemic could be US$570 billion each year or 0·7% of global income (range 0·4–1·0%)—an economic threat similar to that of global warming, which is expected to cost 0·2–2·0% of global income annually. Given the magnitude of the threat, we call for scaled-up financing of international collective action for epidemic and pandemic preparedness.
Two planks of preparedness must be strengthened. The first is public health capacity—including human and animal disease surveillance—as a first line of defence. Animal surveillance is important since most emerging infectious diseases with outbreak potential originate in animals. Rigorous external assessment of national capabilities is critical; WHO developed the Joint External Evaluation (JEE) tool specifically for this purpose. Financing for this first plank will largely be through domestic resources, but supplementary donor financing to low-income, high-risk countries is also needed.
The second plank is financing global efforts to accelerate research and development (R&D) of vaccines, drugs, and diagnostics for outbreak control, and to strengthen the global and regional outbreak preparedness and response system. These two international collective action activities are underfunded.
Medical countermeasures against many emerging infectious diseases are currently missing. We need greater investment in development of vaccines, therapeutics, and diagnostics to prevent potential outbreaks from becoming humanitarian crises. The new Coalition for Epidemic Preparedness Innovations (CEPI), which aims to mobilise $1 billion over 5 years, is developing vaccines against known emerging infectious diseases as well as platforms for rapid development of vaccines against outbreaks of unknown origin. The WHO R&D Blueprint for Action to Prevent Epidemics is a new mechanism for coordinating and prioritising the development of drugs and diagnostics for emerging infectious diseases. Consolidating and enhancing donor support for these new initiatives would be an efficient way to channel resources aimed at improving global outbreak preparedness and response.
Crucial components of the global and regional system for outbreak control include surge capacity (eg, the ability to urgently deploy human resources); providing technical guidance to countries in the event of an outbreak; and establishing a coordinated, interlinked global, regional, and national surveillance system. These activities are the remit of several essential WHO financing envelopes that all face major funding shortfalls. The Contingency Fund for Emergencies finances surge outbreak response for up to 3 months. The fund has a capitalisation target of $100 million of flexible voluntary contributions, which needs to be replenished with about $25–50 million annually, depending on the extent of the outbreak in any given year. However, as of April 30, 2017, only $37·65 million had been contributed, with an additional $4 million in pledges. The WHO Health Emergencies and Health Systems Preparedness Programmes face an annual shortfall of $225 million in funding their epidemic and pandemic prevention and control activities.
Previous health emergencies have shown that it can take time to organise global collective action and provide financing to the national and local level. In such situations, a global mechanism should offer a rapid injection of liquidity to affected countries. The World Bank’s Pandemic Emergency Financing Facility (PEF) is a proposed global insurance mechanism for pandemic emergencies. It aims to provide surge funding for response efforts to help respond to rare, high-burden disease outbreaks, preventing them from becoming more deadly and costly pandemics. The PEF currently proposes a coverage of $500 million for the insurance window; increasing the current coverage will require additional donor commitments. In addition, the PEF has a $50–100 million replenishable cash window.
As the world’s health ministers meet this month for the World Health Assembly, we propose five key ways to help prevent mortality and economic shocks from disease outbreaks. First, to accelerate development of new technologies to control outbreaks, donors should expand their financing for CEPI and support the WHO R&D Blueprint for Action to Prevent Epidemics. Second, funding gaps in the WHO Contingency Fund for Emergencies and the WHO Health Emergencies Programme should be urgently filled and the PEF should be fully financed. Third, all nations should support their own and other countries’ national preparedness efforts, including committing to the JEE process. Fourth, we believe it would be valuable to create and maintain a regional and country-level pandemic risk and preparedness index. This index could potentially be used as a way to review preparedness in International Monetary Fund article IV consultations (regular country reports by staff to its Board). Finally, we call for a new global effort to develop long-term national, regional, and global investment plans to create a world secure from the threat of devastation from outbreaks.
Gavin Yamey, Marco Schäferhoff, Ole Kristian Aars, Barry Bloom, Dennis Carroll, Mukesh Chawla, Victor Dzau, Ricardo Echalar, Indermit Singh Gill, Tore Godal, Sanjeev Gupta, Dean Jamison, Patrick Kelley, Frederik Kristensen, Ceci Mundaca-Shah, Ben Oppenheim, Julie Pavlin, Rodrigo Salvado, Peter Sands, Rocio Schmunis, Agnes Soucat, Lawrence H Summers, Anas El Turabi, Ron Waldman, Ed Whiting