Turns out that Lawrence Summers has read up on the Trump economic plan, giving him enough info to have an informed opinion...and that opinion can best be summarized as "Burn it with FIRE!"
How much does he hate it? Well, let's just say that Larry seems to have not ruled out the possibility that Trump's economic strategy was computed by girls.
Earlier today, Larry chatted with Bloomberg via Skype and offered some characteristically subtle criticisms of what the incoming administration wants to do with money, the most notable being that the market has lost its mind and that Trump's economic team is stacked with loons.
Former U.S. Treasury Secretary Lawrence Summers said investors are being far too sanguine about the risks associated with Donald Trump’s incoming administration.
The Harvard professor, a Democrat who was Treasury chief under Bill Clinton, cited the possibility of protectionist measures by the U.S. as well as changes to foreign policy and domestic social policy as issues that are creating “extraordinary uncertainty.”
Oh, but allow Larry to explain...
"This is probably the largest transition ideologically and in terms of substantive policy that we’ve seen in the U.S. in the last three quarters of a century,” Summers told Tom Keene in a Bloomberg Television interview Tuesday. “Those kinds of transitions have to be -- given the central role of the U.S. in the global system -- matters of enormous uncertainty. I don’t think that’s fully recognized by markets."
And this being Summers, his critique turned personal with specific shade aimed at the two guys who wrote this...
Summers was also critical of a paper jointly written by economist Peter Navarro, who will lead a newly formed White House National Trade Council, and Commerce Department head Wilbur Ross.
“The Navarro-Ross paper is well beyond voodoo economics,” Summers said of the September report on Trump’s growth plans. “The logic of it, the arguments made, are so far out of the mainstream of any kind of responsible economic thinking that they are the economic equivalent of creationism.”
Larry also compared Navarro and Ross to climate change-denying scientists, conjectured that the paper has ideas beyond even the far fringes of economic theory and went HAM on the notion of Trump's idea to fill federal coffers by ending corporate inversions...
"The vast majority of the companies who have large overseas cash also have substantial amounts of domestic cash,” he said. “The reality is that cash that is brought home will be used to pay dividends, to buy back shares, to engage in mergers and acquisitions, to rearrange the financial chessboard, not to invest in large amounts of new capital. It is a chimera to suppose that there will be large increases in capital investment as a consequence of that repatriation."
So beware, Trump economic advisors put in place by a voting base that openly despises cultural elitism and accepted economic doctrine; the notoriously haughty former President of Harvard is making allusions to chimeras whilst offering a withering exegesis of your economic plan to MAGA.
You've been warned.