A big name comes out in support of a big issue.
Lest you thought we got caught sleeping, or forgot: Larry Summers weighed in this weekend on what the Trans-Pacific Partnership (TPP) negotiations must accomplish for the deal to be a success for the American middle class.
Here’s what Summers, former Harvard University president, Treasury Secretary, and recently of the short list of candidates to chair the Federal Reserve, had to say:
Some matters pushed by the business community have little or nothing to do with the interests of the vast majority of U.S. workers and should not be emphasized. …
Conversely, it is appropriate in the TPP talks, and our international economic diplomacy more generally, for us to use the substantial leverage we possess in areas that do bear directly on middle-class living standards. These include the prevention of inappropriate producer subsidies — including through manipulated exchange rates or distorted state enterprise accounting — and, more generally, cooperation to ensure that a world in which the greater mobility of capital and companies does not become one in which governments lose the ability to protect their citizens. If global integration means local disintegration, it will be a failure.
There are a few things you should walk away from Summers’ opinion with:
- He thinks a currency rule should be included in the TPP, and he also thinks the TPP would benefit Americans on the whole. That means he doesn’t think including currency language would automatically kill the deal.
- As stated above, he’s a former Treasury secretary. Summers is no dummy; he’s as much an authority on monetary policy as those officials who have said a currency rule would be unworkable.
- He’s not the only one. Summers is only the latest in a line of free-trade economists who want currency in the TPP. Simon Johnson, Fred Bergsten, and Art “Supply Side” Laffer.