Christopher Anstey
Fri, January 5, 2024
Former Treasury Secretary Lawrence Summers
(Bloomberg) -- Former Treasury Secretary Lawrence Summers called on US business leaders to set aside their concerns over the excesses of the Biden administration’s progressive policies and to recognize the historic dangers of another presidential term for Donald Trump.
“This is probably the most consequential presidential election since the Second World War,” Summers said on Bloomberg Television’s Wall Street Week with David Westin. Among things under threat in the case of a Trump win in November are “prospects with respect to basic justice and rights including the ability to make and enforce contracts in the United States,” and the ability of companies, universities and other institutions to “function autonomously,” he said.
While financial markets performed well during Trump’s first term, Summers said history shows things change as the duration of a populist leader’s time in power extends. Markets also responded well during Benito Mussolini’s first few years in office in Italy, as did Argentina’s economy initially under Juan Perón, he said. But both ended with “a great deal crashing down,” he said.
Summers, a Harvard University professor and paid contributor to Bloomberg TV, made a “plea to my friends in the business community” with regard to this year’s election.
“I understand some of your concerns about overly progressive, overly government-interventionist policies of the Biden administration — in many cases, I share some of those concerns,” he said. “But that is a very different thing than undercutting the entire framework within which the United States and its business community have operated for all of our lifetimes.”
Different Tone
The former Treasury chief drew a distinction between the Trump’s 2017-21 term and what the Republican has signaled if he defeats Joe Biden. Advisers last time were “drawn from the mainstream” of the GOP, including former Treasury Secretary Steve Mnuchin, he said. But Trump has this time been using “extreme rhetoric” and has surrounded himself with “figures committed to tearing down the establishment.”
Overseas, the likelihood is that US allies and others would view Trump’s first term, and the rejection of legitimate electoral results in the 2020 vote that culminated in the Jan. 6, 2021, attack on the US Capitol as not an “aberration,” Summers said.
A Trump victory would “represent a loss of the moral authority that the United States has had since it won the Cold War, since it won the Second World War — and that will make for a much less stable world,” he said.
As for Biden, Summers said that there were “costly misjudgments” with regard to fiscal stimulus in 2021, and “there have been excesses on industrial policy,” but overall the administration has pursued “a sound activist approach to economic policy.”
Haley, Christie
With the Republican contest for the presidential nomination only just starting, Summers also said that “I would not be speaking anything at all like this” were Nikki Haley or Chris Christie the GOP front-runner.
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