Former US Treasury Secretary Larry Summers expressed concerns about President Biden’s economic policies, stating that while he generally supports them, he is worried about the emphasis the White House is placing on industrial policy and outbound investment restrictions. Summers described this approach as increasingly dangerous and nationalistic.
Speaking at an event hosted by the Peterson Institute for International Economics, Summers expressed deep concerns about the doctrine of economic nationalism, particularly focusing on manufacturing. Summers, who is also a professor at Harvard University and a regular guest on Bloomberg Television, highlighted his concerns about the potential risks associated with this approach.
Summers did acknowledge that Biden’s initiatives, such as the CHIPS Act and the Inflation Control Act, which aim to promote domestic production in key industries, were appropriate steps. These laws provide substantial subsidies to sectors such as semiconductors, electric vehicles (EVs), and clean energy, creating thousands of jobs in regions like the Midwest and Southeast while reducing US dependence on China in critical technologies.
However, Summers explained that the main challenge facing the US economy is cost inflation, not a lack of employment. He cautioned against the administration’s focus on highlighting the achievements of its industrial policy in terms of job creation, raising concerns about the potential consequences.
Former US Trade Representative Robert Zoellick also attended the same event and shared critical views on the Biden administration’s proposed restrictions on US investments in countries like China. While these regulations are initially expected to be limited in scope, both Summers and Zoellick warned that they could expand over time and have unintended negative effects.
Original article: Summers Calls Biden Economic Doctrine ‘Increasingly Dangerous’ (source: Bloomberg)
What are Larry Summers’ concerns regarding President Biden’s emphasis on industrial policy and outbound investment restrictions?
Former US Treasury Secretary, Larry Summers, has expressed concerns about President Biden’s economic policies. While he generally supports them, he is worried about the emphasis the White House is placing on industrial policy and outbound investment restrictions. Summers believes this approach is increasingly dangerous and nationalistic.
During an event hosted by the Peterson Institute for International Economics, Summers voiced his deep concerns about economic nationalism, specifically focusing on manufacturing. As a Harvard University professor and regular guest on Bloomberg Television, his thoughts carry weight in the economic community. He emphasized the potential risks associated with this approach.
Summers did acknowledge that Biden’s initiatives, such as the CHIPS Act and the Inflation Control Act, are appropriate steps in promoting domestic production in key industries. These laws provide substantial subsidies to sectors like semiconductors, electric vehicles (EVs), and clean energy, creating thousands of jobs in regions like the Midwest and Southeast, while reducing US dependence on China in critical technologies.
However, Summers believes that the main challenge facing the US economy is cost inflation, rather than a lack of employment. He cautioned against the administration’s focus on job creation as a measure of success for its industrial policy, raising concerns about potential consequences.
Former US Trade Representative, Robert Zoellick, also at the event, shared critical views on the Biden administration’s proposed restrictions on US investments in countries like China. Both Summers and Zoellick warned that these regulations could expand over time and have unintended negative effects.
Source: Bloomberg
Summers’ concerns over Biden’s economic doctrine highlight the need for careful consideration of proposed policies. As a former Treasury Secretary, his experience lends credibility to his worries. It is crucial for the Biden administration to address these concerns and ensure that their economic plans contribute to sustainable growth and fiscal responsibility.
It’s always worth listening to someone as knowledgeable and experienced as former US Treasury Secretary Summers. His concerns about Biden’s economic doctrine should be taken seriously, as we strive for a balanced and sustainable economic approach.