Larry Summers Is Out

Larry Summers’s voluntary withdrawal from consideration as the next Federal Reserve chairman is equivalent to a resignation: He was the favorite candidate, and Obama favored him to succeed Ben Bernanke as director of U.S. financial policies — arguably one of the most influential three or four positions out there.

At least on paper, yesterday’s shocking news is an important victory for the Democratic left, which had organized a coalition of numerous progressive groups — such as MoveOn, Democracy for America and Daily Kos — calling for a vote against [Summers] in the financial commission that must approve Obama’s nomination. At that time, many senators from the president’s party had already announced their opposition to Summers — par excellence, a man of “the system;” one of the “bigwig” economists in the Goldman Sachs sphere, alongside Timothy Geithner and Henry Paulson; Clinton’s former treasury secretary; and principal adviser to Obama in an economic crisis, the “rescuing” mastermind to insurance and banking giants in 2008. A Wall Street man of absolute integrity, he is also a figure who has earned liberal hostility because of his policies, the distrust of African-Americans for his dismissal of Cornell West when director at Harvard and the National Organization for Women for the several statements he made about the lesser technical and scientific aptitudes of women.

His departure from the race should lead to economist Janet Yellen’s nomination and has a symbolic value nevertheless during this fifth anniversary of the Lehman Bros. collapse, which marked the worst capitalist crisis of the modern era. This is a small — and rare — satisfaction, given that five years later, the businesses that plunged the world into the current deep recession gave hard proof that there has not been substantial reform of the banking system, whose excesses led to the crisis.

The next crisis could therefore repeat itself in the same way, as none of the protagonists of the criminal speculation have been prosecuted, and if anything, the whole affair has strengthened the concept of “too big to fail,” which puts banks, high finance and large corporations above the law.

Because of an increase in the social gap, there is a disparity that is increasingly more rampant and the destruction of millions of jobs destined to never return. There is a new, more rapacious global capitalism, whose grim face resembles Larry Summers.