Sunday, November 29, 2009

Healthcare, Afghanistan, Summers at Harvard

As I said in a previous blog, the Democrats have narrowed their options considerably on healthcare. Nevertheless, it is important that they pass some sort of reform. This view is echoed in today's N.Y. Times (Fighting the Wrong Healtcare Battle) by Princeton professor Paul Starr, former healthcare advisor to Pres. Clinton. He pretty much sums up the positive possibilities that are still available to Congress.

For what it's worth, Massachusetts interim Senator Paul G. Kirk, writing in today's Boston Globe , urges the President not to commit any more troops to Afghanistan. My position is that, in fact, that the President should begin to withdraw troops: see this blog.

Finally, the Globe reminds us that Harvard University lost not just nearly $10 billion of its $27 billion endowment but also nearly $2 billion of its operating budget. In spite of warnings from in-house financial experts, supposed wunderkind -- and chief economic advisor to President Obama -- Lawrence Summers overruled responsible and knowledgeable dissenters and allowed this money, needed to pay for running the University, to be invested along with the endowment in the already suspect financial markets of 2006-2007. That this speculative type of investment had paid off previously is, of course, irrelevent; after all, people buying into the market in early 1929 could say the same. The fact is, Summers had been advocating lax control of investment banking for years, and he turned out to be wrong (as in "wrong, wrong, wrong").

"Wunderkind-ness" in economics is a lot like momentum in sports: it's something you have until you don't have it anymore. I am not an economist, so I don't really understand how one gets to be called an economics guru. In mathematics (my profession before I retired) one knows who is a genius: you simply read what they have proved. With few exceptions, theorems remain theorems. In other fields the criteria are much less clear, and certainly more contingent and qualified.

Oddly enough, Summers is not referred to as a "previous wunderkind" in newspaper articles, and so he soldiers along, whispering self-confident advice in Obama's ear about how to correct an economic disaster he himself had helped create. Was Obama thinking "This man knew enough to create this mess, he must know enough to get us out of it"? I guess I'll sign off with that bit of tortured logic.

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