Summers Finds Area of Agreement With Paul Krugman (VIDEO)

The White House chief economic adviser, Larry Summers, finally found a point of agreement with Nobel Prize winning economist Paul Krugman: the belief that the economy remains in a precarious despite slight signs of improvement.

Appearing on NBC's Meet the Press, Summers was asked about the New York Time's columnist's warning that the public should not consider current signs of an economic turnaround to be proof that the recovery has worked.

"You know, I disagree with Paul about a lot of things, but he is right to be raising cautions," said Summers. "That's why, when I just spoke about the economy, I said that after a period when, when everything was negative, there was now some mixture in the indicators. We don't know what, we don't know, we can't know with certainty what's going to happen next, and there certainly are real risks ahead."

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The remarks fell in-line with the generally cautious rhetoric of Summers' Meet the Press appearance. Outlining a new economic structure for the nation, the former Clinton Treasury Secretary described a financial system built on better regulation and a new ethos guiding how the American consumer saves and spends.

"Individuals are going to have to save more," he said. "That's why savings incentives are so important. That's why we need to do things to stop the marketing of credit in ways that addicts people to it, so that our households are again saving, and families are again preparing to send kids to college, for their retirement, and so forth."

In one of the more playful moments of the interview, Summers was asked about the series of tea party protests that occurred this past week in opposition to the Obama administration's tax policies.

"You know, I don't know that much about politics," Summers said, "but I've been surprised by these tea parties a bit. The President is the one proposing cutting taxes on virtually all Americans, so I'm not sure who these tea parties see as being King George."

Comments

[RedEagle]

Having just listened to what Summers had to say here, I feel as if I've just mucked out the stalls after waiting 'way too long.
Now where do I dump this heaping wheelbarrow?

[psssstyeahyou]

http://www.youtube.com/watch?v=Rz1b__MdtHY please watch this pbs bill moyers interview with william k. black. youll want everyone to see it. obama needs mr black on his staff asap.

[funkalicious]

It seems the only thing Larry Summers really knows about is money supply
or how big banks supply his personal account with millions of dollars.

Clearly after listening to his rhetoric no one is paying him an honorarium for truth telling or insights into the market.

Perhaps Larry would understand who is stealing the taxpayers money if he was one of us paying into his and his banker buddies savings accounts.

His tax will be the destruction of our dollar via runaway inflation the Quantitative Easing is the death nell for the dollar.

[Joseph Upton]

For someone with Paul Krugman's background (including a nobel prize in economics), he sure is pretty stupid. Going to an ivy league school is no guarantee of wisdom (Bush AND Obama as evidence).

[truthynesslover]

Summers is working FOR the banks not YOU.

[Annnnw]

I am sick & tired of hearing about Paul Krugman, if he knows so much then why is he not trying to get with the President to HELP the economy instead of BASHING the President's decisions everyday? WHY???? SOLUTIONS are what we need not CRITICISMS> Just like the Republicans to try to embarass the present administration. WHERE WERE YOU ALL THE LAST 8 YRS??????

[Lemeritus]

Where we YOU the last 8 yrs?!?!

You come in here, bashing Krugman because he isn't all hearts & flowers for Obama's financial team and plan, and -- know something? -- you don't know jack. Some of us are beginning to wonder if wiki-think and group-babble isn't, sadly, the most bi-partisan thing we've got going these days.

You may not agree with Krugman, but before you put your fat thumb on the CAPS AGAIN, have the decency to do a little research. Krugman's been here all along, fighting a good fight against Bush. Where have YOU been?

[RichardfromHB]

Summers was asked a direct question about foreclosure assistance and just fell back on his "get the economy moving" talking points. This is not a man of the people.

[kimk3]

Too bad Summers doesn't agree that he, Summers, should get a different day job.

[espressobeans]

Larry Summers is Marie Antionette. Average Americans did not cause this crisis by not saving enough. Those of us who did just watched our net worth go poof over no fault of our own while the people who engineered this crisis get richer. So, if you ask me, the lesson is not to save unless it's under your mattress. Americans need decent jobs. I see nothing in any of these policies that is addressing that basic weakness in our economic foundation.

[William1950]

sucessful business does not operate on credit... they use assets carefully and creatively and do not borrow... the whole "credit" thing is false... people can't get credit!!? oh my golly gee whiz! they don't have jobs... they don't have jobs ... so borrowing is the answer ?? have we learned nothing?!
the real leaders will do none of the following, but... abolish nafta and bring our jobs back. punish american companies that manufacture overseas.. punish american companies that use off shore tax havens for headquarters ... insist by law that all inports must comply with american environmental laws.. universal healthcare now, end the drug "war" ... all would help our economy.

[watchTVgetSTUPID]

Instead, Obama chose Rattner as car czar. Chrysler was in the procss of sueing Rattner (Cerebus versus Quadrangle). No wonder Chrysler workers are going extinct.

[walk0nwalls]

Have you ever tried to start up your own business without credit? It pretty much can't be done. If you're a median income individual with a business plan, you NEED that investment capital to get it up. i.e. lines of credit. Now once those dry up, you're up the river without a paddle, a canoe, or a life vest.

[William1950]

yeah... i agree you might need some credit, but if you can't get it then you start small... it might take longer and it might take more work, but it can be done. credit is a crutch that we all need to learn to do without. I do not agree with the premiss that it can't be done.. it can...

[huff-fan]

I m going to trust Obama for now. The American people seem to be getting more positive about the economy and the market is going up. There are too many opinions, too many experts and too much paranoia.
I don't think the banks should be nationalized or left to fail, but we should insist on regulation, transparency and limits on compensation. Many banks have said they want to pay the money back in an attempt to avoid regulation.

Also, we should all learn to borrow, save and spend more wisely in the future.

I like many of the changes I see from Obama especially his ability to change our image abroad. Hopefully, we will begin working more collaboratively with other nations.

[William1950]

a twelve month suspension of income taxes would help.

[Kaves]

music to my ears

[Kassandra]

Larry's lost a little weight. He doesn't look quite so bloated anymore...­.. just an observation

[kavips]

So how do jumpstart it?

We could put lots of cash in everyones hand... here.... can you spend $15,000 dollars?
This would have great effect on moving us forward, but would at some point have to be paid back.. A better bet would be to use the concept of getting a loan extension, but doing it on a massive scale...

What if everyone had a 3 month extension on their mortgage?

The first month would be spent catching up, paying off accumulated bills. For most of the second month, the extra will be spent the same, up until the point when each head of household becomes financially solvent...­. All those entities to which he owed, would now be flushed with cash... And then, where's all that cash going to go!... The third month, would be spent on spending..­. Eating out? no problem... Buying that large screen TV? no problem... Putting more cash than normal down on a new vehicle? no problem...

The payback occurs at the end of the loan and is almost painless..­. Instead of finishing on the date due, the loan is extended four months, with the fourth month being the extra interest that accrued over the missing three.... The cost per person would be one extra mortgage payment over the life of his loan... The payout to the mortgage companies would be an extra months payout for every mortgage it lent money for, income over and beyond that which was anticipate­d.. Its a win, win, win...

[Kassandra]

We need the JOBS they sent overseas, with all our technology that we grunt invented in this country. give me a fishing pole not a fish!

[kavips]

The answer is rather simple..

Hats off the the kavipsian theory of economics for first venting this idea...

Currently we are taking care of symptoms.. The problem is the economy... For example, we are trying to jump start lending... Any student of the Great Depression knows that lending will not take place, until first the economy returns...

No bank will lend, No business will borrow... As one Californian put thusly? When the economy is collapsing, why am I going to borrow money to expand my business?

Voila.

The economy must be fixed first; toxic assets, bottomed out low interest rates will have no effect whatsoever, if no one needs or wants extra money....

[Kassandra]

Yes, what they are doing makes no sense at all, unless we admit that this administration is just finishing the looting...­quicker than the eye can see and before we all wake up from our dance with HOPE.

[Badfickle]

Unfortunately he answer to that is for the government to spend more. Just like FDR did. The stimulus was too small. by half. get people working and they will spend and businesses will expand and then the banks will lend to meet that demand.

Tax cuts aren't going to do it either and for the same reason that kavips mentioned with banking. You give tax cuts and right now people aren't going to spend it. They are going to put it in their mattress because they are scared.

[breakingpoint]

This is one of the men who helped to cause this mess. why would anyone trust this guy?
I don't.