The Lessons of Last Year’s Larry Summers Hatefest

The Lessons of Last Year’s Larry Summers Hatefest

Larry Summers opposed the American Jobs Plan on the grounds that it would risk overheating the economy, stoking inflation, and potentially forcing the Federal Reserve to raise interest rates, triggering a recession. Many people, including me, disagreed with his analysis at the time.

To some of Summers’s critics, though, he was not merely undeniable that he was wrong, but he was so obviously wrong that he could only be acting out of some hidden motive. Tea New Republic ran a story headlined, “Washington’s Inflation Hysteria Is Fueled by Corporate Greed,” with the subhed, “With the help of Larry Summers and a battery of conservatives, the business lobby is disingenuously warning that Biden’s recovery plans will actually wreck the economy.”

Progressives suggested he was out for revenge for having been denied a powerful spot in Biden’s administration. “He’s trying to spook the markets and crash the economy to punish the administration for shutting him out,” tweeted the left-wing writer Alex Parene. “It might be a silly plan but that’s what he’s going to do for four years.” Robert Kuttner wrote that Summers has “proven once again that he’s a vindictive SOB.” (Kuttner later made the same charge against Jason Furman, another liberal economist who predicted inflation might become a problem.)

Of course, most people now recognize Summers’s warnings about inflation were fairly prescient. But it was also relatively clear at the time that Summers, regardless of whether he was right or wrong, was not trying to sandbag the Biden administration. Even as he opposed Biden’s jobs plan, he argued in favor of his much larger (and, given its permanence, significant) social legislation. Summers supported the full-size version of Build Back Better. He privately lobbied Joe Manchin to revive negotiations on a shrunken version, and after Manchin made his deal, Summers appeared on television to argue the plan would reduce, rather than aggravate, inflation.

There are a few lessons here that everyone could take from this episode, but that apply with special force to the left:

(1) Intellectual humility can be a virtue. Some questions have fairly clear answers, but progressives have gotten overinvested in the notion that every political question has an undeniably correct answer. You saw this during the pandemic, when progressives began applying the label “deniers” not only to people who questioned the vaccine (which was kooky) but to people who questioned the cost-benefit value of any public-health intervention.

(2) Assumptions about motives are often wrong. Once you assume every position you hold is obviously correct and good, it is easy to believe that everybody who disagrees is evil or corrupt. Summers was not trying to sabotage Biden — he was trying to steer the administration away from what he genuinely believed was a risky policy choice.

And for all the aggravating and terrible negotiating positions Manchin adopted at various points along the way, the fundamental frame through which the left presented him — as a coal baron seeking to protect his fortune — turned out to be incorrect. Indeed, if Manchin’s objective was always to sandbag any bill, then he would have simply declared from the beginning he would not negotiate a partisan bill. I had, and still have, many complaints with Manchin’s preferences, but it is easier to grasp these as a function of different preferences or perhaps a failure to understand the nuances of policy.

The months progressives spent persuading themselves that Manchin was simply out to protect his coal interests led them to advocate some truly stupid ideas: refuse to waste time negotiating with him, threaten him with a primary challenger, or throw him out of the party. Bad analysis led to bad strategy.

(3) Credibility matters. Suppose Summers had been a good team player and swallowed his fears that the American Jobs Plan would stoke inflation. He would have become a less persuasive advocate for Biden’s social policies. His willingness to openly admit the American Jobs Plan risked an inflationary spiral gave him more credibility to argue that Build Back Better — now the Inflation Reduction Act — would reduce inflation. Indeed, if not for that, he may well have failed to persuade Manchin, and the bill could have died.

The broader assumption among many progressives is that American politics is a contest of willpower, and the way their movement wins is to enforce the same ideological discipline that the right has long imposed. Left-wingers routinely blame moderate liberals for any project undertaken by the right — if only liberals had withheld criticism from the left, then the right would be unable to attack those targets. If moderate liberals are arguing that gender transition is sometimes implemented too hastily, they are obviously responsible for Republican laws that lurch to the opposite extreme, even if they also denounce those excesses.

So deep is this impulse that, when the Supreme Court overturned Roe v. wade, a handful of leftists bitterly blamed liberal media for publishing critiques of the left. “Good job by everyone getting their big pieces on cancel culture or the risks of trans care out there this week,” complained Tom Scocca.

There are many problems with a political culture that anathematizes criticism of extremists on one’s own side. The main one is that it shuts down the channel for identifying and correcting error, by stigmatizing any dissent as betrayal and evidence 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 errors or excesses on one side can address that audience with more credibility. Applying more partisan will to every contest is not a superpower.

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