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Richmans' Trade and Taxes Blog
Why Summers Resigned
My father predicted Larry Summers resignation as Obama's chief economic advisor after observing Summers' body language when he was interviewed by reporters after coming back from his trip to Beijjing earlier this month. Let's review the situation. Here's what I wrote on September 7:
Summers economic policy has failed and his last-ditch attempt to rescue it in China failed. So he is taking the dignified way out. The White House has a different story. Bloomberg reports:
Guess that means that Geithner will resign soon. If Obama picks Paul Krugman or Ralph Gomory to replace Summers, that will be a sign that he is planning to get tough with China. The result would be a prosperous economy for the rest of his term. If he picks another free-trade ideologue, that will be bad news for America's children.
Comment by Larry Walker, Jr., 9/22/2010:
You we're (are) definitely right!
Comment by ff2017, 9/22/2010:
Huh? I don't see the connection. It's hard to be prosperous when you have a lot of debt and unfunded liabilities, regardless of how tough we are with China (incidently, holders of a significant amount of said debt as you well know).
Comment by Ben Gee, 9/23/2010:
If Krugman is picked to replace Summers, look for a trade war to develop. There will be no winners. If world trade collapse, the world will go into depression, not recession. Beside the US and China, Japan, S Korea, Taiwan that supply factors of production to China will suffer. Countries the supply raw materials and energy to China will suffer. The whole world will plunge into a deep freeze.
Response to this comment by Rdan, 9/23/2010:
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