Robert Zoellick will step down as head of the World Bank this year, and there’s already lots of chatter about who might replace him. While many acknowledge that the world has outgrown the decades long tradition of having a European head the IMF and an American head the World Bank, it’s likely that another American will get the nod. (Otherwise Congress might take their ball and go home — i.e. they might cut American funding for the institution.)
Speculation has centered on Hillary Clinton; her staff says that she’s not interested. Susan Rice, the current U.S. ambassador to the United Nations, has also been mentioned. But the likeliest name mentioned so far is that of Larry Summers.
Summers looks good on paper and has the pedigree: former U.S. Treasury Secretary under Clinton, former director of the Economic Council under Obama, former president of Harvard. But he would be a very bad choice to head the World Bank, and not just for the reasons usually given.
Some opponents cite the accusations of sexism that have surrounded him ever since he gave a controversial speech in 2005, questioning whether women were innately suited for work in scientific fields. Others might point to a memo he wrote in 1992 while he was the Bank’s chief economist, in which he asked whether the World Bank ought to encourage dirty industries to migrate from developed countries to less developed countries. (Money quote: “I’ve always thought that under-populated countries in Africa are vastly under-polluted.”)
These incidents alone might be enough to disqualify him, but I’d point instead to a more surprising weakness: cowardice.
The past few months have shed more light on the debate surrounding the Obama Administration’s 2009 stimulus plan. Ultimately President Obama endorsed a plan worth $787 billion — which sounds big but is now acknowledged as not having been big enough. Now that we have access to some of the policy memos, it’s clear that even bigger figures were discussed by Obama’s economic team.
The economic team knew of the massive amount by which the crisis had lowered GDP from what it would otherwise be. And Christina Romer, the chair of Obama’s Council of Economic Advisers, was bold enough to push for a stimulus package that would get closer to the size of the problem. But guess who dismissed her ideas as impractical? Noam Scheiber reports:
Moreover, since Obama’s political operatives were convinced that any stimulus approaching a trillion dollars was hopeless, Summers worried that urging more than this amount would stamp him and Romer as oblivious in their eyes. “$1.2 trillion is nonplanetary,” he told Romer, invoking a Summers-ism for “ludicrous.” “People will think we don’t get it.”
Romer was reluctant to second-guess Summers on political questions in light of his imposing government résumé. She protested, but dropped the matter when Summers held firm.
Three years on and our recovery is only now starting to shift from “jobless” to “slightly less jobless”. Summers did not have the courage to fight for the size of the stimulus called for by the gravity of the situation. Yet he can somehow lead an organization whose official goal is nothing less than the end of poverty? Clearly, this job needs someone with the courage to call for bold, uncomfortable ideas. So skip Summers.
- Related story: Saying “No” to the yes-men on fiscal stimulus
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