Summers Rallies for Financial Reform

Flickr/<a href="http://www.flickr.com/photos/worldeconomicforum/374706082/">World Economic Forum"</a>

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


Larry Summers, the top economic aide and somewhat mercurial adviser to President Obama, told leading US business leaders in a speech in New York yesterday to accept the bitter pill of financial reform. “A strong government (that) responds to market failures, provides social protection regulates potential abuses and supports economic conditions is undeniably in the long-run interest of business, he told audience members.

Summers’ speech comes as the Senate banking committee, led by Sen. Chris Dodd (D-Conn.), is trying to reach an agreement on a bipartisan financial-reform bill. The Obama administration has of late deployed some of its top financial officials—Treasury Assistant Secretary Michael Barr, even President Obama himself—to drum up support in the financial-services community for Congress’ proposed crackdown on financial products, the housing markets, and mortgage lenders, while also bolstering consumer protections—a major sticking point for lawmakers in Washington.

Here’s a few other highlights from Reuters’ report on Summers’ stump speech yesterday:

While Summers said he understood business antipathy, “history teaches us that active government is a necessary force,” he added.

To make his point, Summers suggested that few, if any, major financial institutions would have survived without the emergency liquidity offered by the government.

It was just 18 months ago that leading companies were reduced to borrowing money overnight because they were unable to borrow for a week, he said. The nine financial institutions benefited by the U.S. bailout fund today have a combined market value approaching $1 trillion, he said.

On comprehensive financial reform, he said “On one level, it’s mind numbingly complex. On another, it’s not that hard.”

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

payment methods

We Recommend

Latest