Lawrence Summers defends Obama administration economic policies in final speech

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Top White House economic advisor Lawrence Summers on Monday defended the Obama administration’s economic policies in his final speech before stepping down at year’s end, and the White House said a replacement for the key position likely won’t be named before then.

‘Had it not been for President Obama’s willingness to support a sufficiently aggressive response from the late stage of the presidential campaign to his first days and months in office, I have little doubt that we would be looking at a vastly different world today,’ Summer told the Economic Policy Institute in Washington. ‘Yet while the economy may be out of the intensive care unit, the patient now faces the long road of not just recovering from previous affliction, but beginning to address chronic ailments.’

Summers announced in September that he would step down to return to Harvard University. As chairman of the White House National Economic Council, Summers has been a top advisor to Obama. The former Treasury secretary and Harvard University president was a key player in the decisions to enact the $814-billion economic stimulus legislation and continue the financial bailouts started by the Bush administration.

Given the continued economic problems, Summers was asked if he regretted returning to Washington to work for Obama. Summers said he had no regrets working for a ‘remarkable president’ during ‘an enormously consequential time for our economy.’

‘Just as scholars continue to debate how close we came to nuclear conflict during the Cuban missile crisis, they will continue to debate just how close the American financial system and economy came to all-out collapse in the six months between September of 2008 and April of 2009,’ Summers said.

‘Would I like the results to be even better than they have been on a number of different dimensions? Of course,’ Summers continued. ‘But I think the president is right to take pride in what has been averted. And that is not easy always for people to understand but is something that I think is very, very important.’

Summers made a pitch for approval of the tax-cut deal between Obama and congressional Republican leaders as he warned of low economic demand for ‘several years to come.’ He also said it was important for the nation to deal longer term with the growing budget deficit, although he stressed he did not see ‘financial collapse on the imminent horizon.’’

‘Deficits are a means of postponing and magnifying ultimately necessary tax increases or spending reductions,’ Summers said. ‘They are a tax on our future unless used to finance productive investments.’

Speaking of postponements, administration officials had hoped to name a replacement for Summers by the end of the year. But White House spokesman Robert Gibbs said Monday that work on the tax-cut deal, the press for Senate approval of a new nuclear treaty with Russia and other issues were taking up a lot of time for administration officials.

‘I’m not sure that’s going to get done by the end of the year,’ he said of naming a new head of the National Economic Council.

-- Jim Puzzanghera