Larry Summers Optimistic About Middle Class
Top presidential economic adviser Larry Summers declared on Tuesday that the future of the American economy depends on a robust middle class.
Speaking to a well-heeled crowd in a ballroom of the Ritz Carlton Hotel, Summers also blamed the nation's increased income inequality in part of what he called a "breaking down in social norms by people in a position to take."
There were certainly a few sops to the audience, which included senior business leaders gathered by the global management consulting company McKinsey & Company and the Harvard Business Review.
"Let no one who dedicates their life to helping a company succeed... doubt that they are engaged in public service, are engaged in a task that addresses our most fundamental national challenge," Summers said.
But his comments about the middle class were unequivocal.
"We are very likely to succeed as a nation if we produce steadily rising incomes from a growing middle class over the next generation -- almost regardless of whatever else happens," he said.
"We are unlikely to succeed as a nation if we do not provide steadily rising incomes from the middle class -- almost regardless whatever else happens."
Summers, who announced last week that he would step down as director of the White House's National Economic Council by the end of the year, said what Americans want from the economy is pretty simple. "The vast majority of us are parents, and the vast majority of us want nothing more or less than for our children to have the ability to live better than we do."
Polls show that many Americans now harbor doubts that the American Dream is still attainable.
As Summers put it: "We are not at a moment where confidence in either the short run or the long run is at an apex."
But, he said: "I am much more optimistic than the American public. Much more optimistic than many of my friends."
Summers spoke of reigniting a healthy economic cycle, and put in a pitch for a series of economic measures proposed by the White House "that should be anything but controversial." They include major tax incentives for investment and a commitment to research and development.
"If we can make the right choices, our best days as competitors and prosperous citizens lie in the future," he said.
Asked about new Census data showing that the income gap between the richest and poorest Americans grew last year to its widest amount on record, Summers said one factor is that "we have a more ruthless economy. There's breaking down in social norms by people in a position to take."
He noted that income inequality has been getting worse for a while. "All was not well before we had a recession," he said. "Incomes did not grow from 2000 to 2007, even as the economy was said to be booming." The fraction of income going to [the] lowest 95 percent of the population was steadily falling, he said.
"We can do better as a country."
It was Summers's second speech of the day. Earlier, he said that the economy will eventually improve and that "people aren't going to live with their parents forever."