> I don't mean to say that he's still not a prick and
> all that and that any of this would cancel out his
> past bad deeds. But like Volcker, it could be that at
> this conjunction, it's not bad for our side for him
> to be near the levers of power. It could even be very
> good. Much to my enormous surprise and with the
> emphasis on "could."
As I understand, Volcker has been concerned about the instability arising from finance for decades. He should have more credibility on these issues than Summers. Still, Lawrence Summers wrote, "we need to reform tax incentives that encourage financial risk taking, regulate leverage and prevent government policies that give rise to a toxic combination of privatised gains and socialised losses." He speaks more accurately of the sources of financial fragility than most, which should be highlighted. Whatever his goal, our side shouldn't let him forget these words.
The elite opinion on international trade deals is shifting. Their concern is to restore the legitimacy of continued trade deals by pacifying some objections over who endures the costs of trade. There seems to be a growing acceptance of the why, though they haven't settled on the how. Rhetorical space is opening up. Dani Rodrik, for one, has a keen sense of how to exploit this opening for humane ends.
Sure, there will be some motions of reform. The question is how much more they will be than a public theater of repent, private defense of high finance. Sure, we should expect broad changes in the regulatory institutions. Some changes will be more technocratic, others could affect the power of our financial lords. It seems to me that fights over regulating leverage and who will be forced to bear future risks are the ones to watch. The same for diminished secrecy. Aren't these where the need to better stabilize the economy requires diminishing the power of finance? (At least, that is my crude understanding. If I'm wrong, I hope Doug will correct this.)
Couldn't Summers turn be the elite equivalent of scrambling to the front of a protest and shouting "March!"? Someone will direct the inevitable reform act, all the better if that someone is "sound."
The measure of how far the last couple of years in the decade are from those under Bush will be how much more we get than the lockup of several Martha Stewarts from clustefuck finance, the reshuffling and rebranding of the regulatory org chart, and a Mission Accomplished banner.
Shane