Lessons from Last Year’s Larry Summers Hate Festival

Larry Summers opposed the US jobs plan on the grounds that it would overheat the economy, fuel inflation and potentially force the Federal Reserve to raise interest rates, triggering a recession. Many people, including me, disagreed with his analysis at the time.

For some of Summers’ critics, however, it was not just undeniable that he was wrong, but he was so patently wrong that he could only act out of ulterior motive. The New Republic published an article titled “Washington’s Inflation Hysteria Fueled by Corporate Greed”, with the following caption: “With the help of Larry Summers and a battery of conservatives, the US lobby businesses is hypocritically warning that Biden’s stimulus packages will actually destroy the economy.”

Progressives suggested he wanted revenge for being denied a powerful place in Biden’s administration. “He’s trying to scare the markets and crash the economy to punish the administration for shutting him out,” the left-leaning writer tweeted. Alex Parene. “It may be a stupid plan, but that’s what he’s going to do for four years.” Robert Kuttner wrote that Summers “proved once again to be a vindictive SOB”. (Kuttner later leveled the same accusation against Jason Furman, another liberal economist who predicted that inflation could become a problem.)

Of course, most people now recognize that Summers’ inflation warnings were pretty prescient. But it was also relatively clear at the time that Summers, whether he was right or not, was not trying to slash the Biden administration. Even though he opposed Biden’s jobs plan, he argued for his much broader (and, given his permanence, important) social legislation. Summers supported the full-size version of Build Back Better. He privately lobbied Joe Manchin to restart negotiations on a shrunken version, and after Manchin struck his deal, Summers appeared on television to claim the plan would reduce, rather than worsen, inflation.

There are a few lessons here that everyone could take away from this episode, but which apply with particular force on the left:

(1) Intellectual humility can be a virtue. Some questions have pretty straightforward answers, but progressives have invested too much in the idea that every political question has an undeniably correct answer. You saw it during the pandemic, when progressives started applying the label of “deniers” not just to people who questioned the vaccine (which was crazy) but to those who questioned the cost- benefit of any public health intervention.

(2) Assumptions about motives are often wrong. Once you assume that every position you hold is obviously correct and good, it’s easy to believe that everyone who disagrees is bad or corrupt. Summers wasn’t trying to sabotage Biden — he was trying to steer the administration away from what he sincerely believed was a risky political choice.

And for all the aggravating and terrible negotiating positions Manchin has taken at various times along the way, the fundamental framework through which the left has presented him – as a coal baron seeking to protect his fortune – has proven incorrect. Indeed, if Manchin’s goal was still to trash any bill, then he would have simply stated from the start that he would not negotiate a partisan bill. I had, and still have, many complaints about Manchin’s preferences, but it’s easier to grasp them based on differing preferences or perhaps an inability to understand the nuances of politics.

The progressives’ months of persuading themselves that Manchin was simply seeking to protect his coal interests led them to advocate some truly stupid ideas: refusing to waste time negotiating with him, threatening him with a primary challenger, or kicking him out of business. left. Bad analysis led to bad strategy.

(3) Credibility matters. Suppose Summers was a good team player and swallowed his fears that the US jobs plan was fueling inflation. He would have become a less persuasive defender of Biden’s social policies. His willingness to openly admit that the US jobs plan risked an inflationary spiral gave him more credibility to claim that Build Back Better – now the Inflation Reduction Act – would reduce inflation. Indeed, if not for that, he might well have failed to convince Manchin, and Bill might have died.

The broader assumption among many progressives is that American politics is a contest of wills, and the way their movement wins is by applying the same ideological discipline that the right has long imposed. Leftists routinely blame moderate liberals for any project undertaken by the right – if only the liberals had withheld criticism from the left, the right would be unable to attack these targets. If moderate liberals argue that gender transition is sometimes implemented too hastily, they are obviously responsible for Republican laws that swing to the opposite extreme, even as they also decry these excesses.

This momentum runs so deep that when the Supreme Court overturned deer v. Wade, a handful of leftists have bitterly blamed the liberal media for publishing criticism of the left. “Good job from everyone getting their big chunks on cancel culture or the risks of trans care out there this week,” complained Tom Scoca.

There are many problems with a political culture that anathematizes criticism of extremists from its own side. The main one is that it closes the channel for identifying and correcting errors, branding any dissent as betrayal and proof of personal guilt.

But another problem is that it ignores the role of credibility. There is a persuasive audience, and people who are willing to concede mistakes or excesses on one side can speak to that audience with more credibility. Applying more partisan will to every contest is not a superpower.