Summers: Obama Will Persuade Bankers Because 'We Were There For Them'
Senior White House economic adviser Lawrence Summers said Sunday that he expects employment levels in the country to rise in the spring.
"That is the judgment of most professional forecasters," Summers told ABC's "This Week." "If you look at the employment statistics they will show employment growth. They were showing losing 700,000 jobs a month. Last month they showed losing 11,000 jobs. They will bounce from month to month. But I believe that, as do most professional forecasters, that by spring the employment growth will start to be turning positive."
The assertion was surprisingly direct. The Obama White House has shied away from making testable predictions ever since two of the president's chief aides predicted unemployment topping out at eight percent with passage of the stimulus bill.
Later, host George Stephanopoulos told Summers, "President Obama is calling in the heads of some of the country's biggest banks tomorrow to try to get them to lend more to small businesses and consumers, and that seems to be a big failing so far."
Summers defended Obama's attempts to persuade banks to increase lending. "The country did incredible things for the banking industry. Those things had to be done to save the economy, but no major bank would be intact, in a position to pay bonuses, if that extraordinary support had not been provided. The bankers need to recognize that. They need to recognize that they've got obligations to the country after all that's been done for them, and there is a lot more they can do, and President Obama is going to be talking with them about what they can do to support enhanced lending to customers across the country. We were there for them. And the banks need to do everything they can to be sure they're there for customers across this country."
Not everyone on the Obama economic team is quite so confident about the state of the economy. Appearing on "Meet the Press," White House economic adviser Christian Romer refused to declare that the recession was over, at least until "the unemployment rate is down to normal levels." Romer also insisted that it would be "suicide" for the government to focus on the deficit when the country was in need of jobs.
But Summers refused to provide a number for what the White House was willing to spend on employment and was noticeably vague on details, saying merely that "every bill is going to be a jobs bill going forward."
The panel that followed Summers on ABC's "This Week" was tough on administration for not putting words into action. John Podesta, head of the Center for American Progress and the leader of Obama's White House transition, said he wasn't sure that the president was "meeting with the right people" if he wanted to get credit flowing to small business groups.
"He is meeting with the big bankers," Podesta said. "He needs to be meeting with the regional bankers, community bankers to find ways to get credit flowing to those small businesses."
And Huffington Post co-founder Arianna Huffington pointed out that for all the talk of encouraging the financial system to lend more, the president and his advisers had done quite little.
"There is a lot more he could do," she said. "For Larry Summers to say that the president needs to encourage the bankers to lend is really for the president to give up on his responsibility as the head of the executive branch. He is not a pundit, cajoling and admonishing, which he has been doing constantly. Remember he has gone to Wall Street, he has spoken to them, he talks to them on the phone. Larry Summers talks to them on the phone. [Treasury Secretary] Tim Geithner talks to them on the phone... They are not going to do that while it is in their interest to continue to borrow money at practically a zero interest rate, and trade that money and have the safety net of the government.
"[Summers] is the wrong man to be heading the president's economic team," she concluded. "His response is so lackadaisical. No sense of urgency." As for his optimistic employment prediction, she said, "He keeps quoting the same forecasters who predicted that unemployment would not go beyond 8 percent."