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The National Economic Council was created by a presidential executive order on Jan 25, 1993.
President Clinton created the National Economic Council to serve as an honest broker between the Administration's many agencies,
offices and departments. The NEC works to ensure that economic policy conforms to the President's long term goals of
maintaining fiscal discipline, making key investments in the American people, and opening foreign markets for American workers,
farmers and businesses. The NEC also monitors policy once it is decided upon to ensure that it is properly implemented.
Some of the historic initiatives that the NEC has played a central role in developing include:
- the deficit reduction plans of 1993 and 1997
- the largest expansion ever of the Earned Income Tax Credit for working families
- the North American Free Trade Agreement (NAFTA)
- consistent efforts to expand free and fair trade
- the "Middle Class Bill of Rights" package of targeted tax relief announced in 1994
- establishment of the Direct Student Loan Program
- the President's Empowerment Zones initiative
- the Welfare-to-Work initiative
- increased funding for school construction
- the creation of HOPE scholarships for college tuition
- ensuring that budgetary surpluses be used to strengthen Social Security, Medicare, and to pay down federal debt
- the Digital Divide initiative
- the New Markets initiative
- the College Opportunity Tax Cut
- the China-PNTR Agreement
The Director of the NEC also serves as the Assistant to the President for Economic Policy.
On November 24th, 2008, President-Elect Obama named Lawrance H. Summers as the new Director of
the National Economic Council. Lawrence Summers is currently the Charles W. Eliot University Professor at Harvard University.
Summers served as 71st Secretary of the Treasury from 1999 to 2001 and as president of Harvard from 2001 to 2006. Before being
appointed Secretary, Summers served as Deputy and Under Secretary of the Treasury and as the World Bank's top economist. Summers
has taught economics at Harvard and MIT, and is a recipient of the John Bates Clark Medal, awarded to the American economist
under 40 judged to have made the most significant contribution to economics. he was the first social scientist to receive
the National Science Foundation’s Alan T. Waterman Award for outstanding scientific achievement. He is a member of the
National Academy of Science. Lawrence Summers received his B.S. from MIT and his Ph.D. in economics from Harvard. Summers
played a key advisory role during the 2008 Obama-Biden presidential campaign.
Among his other activities, Lawrence Summers writes a monthly column for the Financial Times,
co-edits the Brookings Papers on Economic Activity and serves as a managing director of D.E. Shaw, a major alternative investment
firm. He also serves on a number of not for profit and for profit boards.
| Lawrance H. Summera |
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| Director of the National Economic Council |
When Barack Obama introduced Lawrance as part of his economic team, he had this to say about him,
"As Under Secretary, Deputy Secretary, and then Secretary of the Treasury, Larry helped guide us through several
major international financial crises -- and was a central architect of the policies that led to the longest economic expansion
in American history, with record surpluses, rising family incomes and more than 20 million new jobs. He also championed a
range of measures -- from tax credits to enhanced lending programs to consumer financial protections -- that greatly benefitted
middle income families.
As a thought leader, Larry has urged us to confront the problems of income inequality and the middle class squeeze,
consistently arguing that the key to a strong economy is a strong and growing middle class. This idea is the core of my own
economic philosophy and will be the foundation for all of my economic policies.
And as one of the great economic minds of our time, Larry has earned a global reputation for being able to cut to the
heart of the most complex and novel policy challenges. With respect to both our current financial crisis, and other pressing
economic issues of our time, his thinking, writing and speaking have set the terms of the debate. I am glad he will be by
my side, playing the critical role of coordinating my Administration's economic policy in the White House -- and I will rely
heavily on his advice as we navigate the uncharted waters of this economic crisis."
| Obama introduces economic team |
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Jan 15th, 2009, Lawrence H. Summers sent a letter to the bipartisan leaders of the Senate and House of Representatives
outlining in detail the President-elect's commitment to accountability and transparency in the use of these funds. The letter
also pledged to use the money in a way that will help preserve home ownership, promote jobs and economic recovery, increase
lending, promote the stability of the financial system, and safeguard taxpayer interests.
The letter outlined four key goals:
1) Providing a clear and transparent explanation for investments
2) Measuring, monitoring and tracking the impact on lending
3) Imposing clear conditions on firms receiving government support
4) Focusing support on increasing the flow of credit
Other important elements include limiting executive compensation, preventing banks from using government funds to purchase
healthy firms rather than to boost lending, and disclosing information online so that American American people readily can
monitor the status of each investment made by the Treasury Department.
Read the full letter....
Dear Madam Speaker, Leader Boehner, Leader Reid and Leader McConnell: Thank you for the extraordinary efforts you have
made this week to work with President-Elect Obama in implementing the Emergency Economic Stabilization Act of 2008. In addition
to the commitments I made in my letter of January 12, 2009, the President-Elect asked me to respond to a number of valuable
recommendations made by members of the House and Senate as well as the Congressional Oversight Panel. We completely
agree that this program must promote the stability of the financial system and increase lending, preserve home ownership,
promote jobs and economic recovery, safeguard taxpayer interests, and have the maximum degree of accountability and transparency
possible. As part of that approach, no substantial new investments will be made under this program unless President-elect
Obama has reviewed the recommendation and agreed that it should proceed. If the President elect concludes that a substantial
new commitment of funds is necessary to forestall a serious economic dislocation, he will certify that decision to Congress
before any final action is taken. As the Obama Administration carries out the Emergency Economic Stabilization
Act, our actions will reflect the Act's original purpose of preventing systemic consequences in the financial and housing
markets. The incoming Obama Administration has no intention of using any funds to implement an industrial policy. The
Obama Administration will commit substantial resources of $50-100B to a sweeping effort to address the foreclosure crisis.
We will implement smart, aggressive policies to reduce the number of preventable foreclosures by helping to reduce mortgage
payments for economically stressed but responsible homeowners, while also reforming our bankruptcy laws and strengthening
existing housing initiatives like Hope for Homeowners. Banks receiving support under the Emergency Economic Stabilization
Act will be required to implement mortgage foreclosure mitigation programs. In addition to this action, the Federal Reserve
has announced a $500B program of support, which is already having a significant beneficial impact in reducing the cost of
new conforming mortgages. Together these efforts will constitute a major effort to address this critical problem. In
addition to these commitments, I would like to summarize some of the additional reforms we will be implementing. 1.
Provide a Clear and Transparent Explanation for Investments:
- For each investment, the Treasury will make public the amount of assistance provided, the value of the investment, the
quantity and strike price of warrants received, and the schedule of required payments to the government.
- For each investment, the Treasury will report on the terms or pricing of that investment compared to recent market transactions.
- The above information will be posted as quickly as possible on the Treasury’s website so that the American people
readily can monitor the status of each investment.
2. Measure, Monitor and Track the Impact on Lending:
- As a condition of federal assistance, healthy banks without major capital shortfalls will increase lending above baseline
levels.
- The Treasury will require detailed and timely information from recipients of government investments on their lending patterns
broken down by category. Public companies will report this information quarterly in conjunction with the release of their
10Q reports.
- The Treasury will report quarterly on overall lending activity and on the terms and availability of credit in the economy.
3.
Impose Clear Conditions on Firms Receiving Government Support:
- Require that executive compensation above a specified threshold amount be paid in restricted stock or similar form that
cannot be liquidated or sold until the government has been repaid.
- Prevent shareholders from being unduly rewarded at taxpayer expense. Payment of dividends by firms receiving support must
be approved by their primary federal regulator. For firms receiving exceptional assistance, quarterly dividend payments will
be restricted to $0.01 until the government has been repaid.
- Preclude use of government funds to purchase healthy firms rather than to boost lending.
- Ensure terms of investments are appropriately designed to promote early repayment and to encourage private capital to
replace public investments as soon as economic conditions permit. Public assistance to the financial system will be temporary,
not permanent.
4. Focus Support on Increasing the Flow of Credit:
- The President will certify to Congress that any substantial new initiative under this program will contribute to forestalling
a significant economic dislocation.
- Implement a sweeping foreclosure mitigation plan for responsible families including helping to reduce mortgage payment
for economically stressed but responsible homeowners, reforming our bankruptcy laws, and strengthening existing housing initiatives
like Hope for Homeowners.
- Undertake special efforts to restart lending to the small businesses responsible for over two-thirds of recent job creation.
- Ensure the soundness of community banks throughout the country.
- Limit assistance under the EESA to financial institutions eligible under that Act. Firms in the auto industry, which were
provided assistance under the EESA, will only receive additional assistance in the context of a comprehensive restructuring
designed to achieve long-term viability.
The incoming Obama Administration is committed to these undertakings. With
these safeguards, it should be possible to improve the effectiveness of our financial stabilization efforts. As I stressed
in my letter the other day, we must act with urgency to stabilize and repair the financial system and maintain the flow of
credit to families and businesses to restore economic growth. While progress will take time, we are confident that, working
closely with the Congress, we can secure America’s future. Sincerely, Lawrence H. Summers Director-Designate National
Economic Council
Read some of the articles Summers wrote for the Financial Times...
Public Opinion of Lawrance Summers from various internet blogs...
I think it is very concerning.
It's not just that Summers' comments about women were ignorant and that they constitute
plain old bigotry.
Harvard came to a standstill under his leadership.
It simply ceased functioning, which is why
he had to leave.
I don't know if you read the NY Times article about Sumers, Rubin and Greenspan and the current economic
crisis? They refused to listen to a woman who warned that the failure to regulate derivatives could bring down the markets.They
silenced her. Same problem - refusal to listen to people who know important information that you may know.Was it because she
too was a woman?
To this day, Summers has never explained that his comments about women were incorrect scientifically,
and why these comments ARE what bigotry is.First he tried to cover them up.What was needed was a head on facing of the facts
and an explanation of what bigotry is:
namely, the belief that a group of people is genetically inferior in the absence of a shred of evidence to support
that belief.
It's fine to have Summers as one of your economic advisors.I'm all for that if he is such a good economist. But
he is clearly not suitable for a leadership position given his bad judgment and inability to listen.
What's going on? Is the odious Larry Summers seriously being considered for a cabinet post in the new Obama adminstration?
Yikes!
I voted for Mr. Obama because of the promise of a fairer society and a fresh start in government. I believed
that Mr. Obama and his team would recognize and honor the power of the women's vote -- a bloc that showed its power and commitment
dramatically during the primary campaign. I don't regret my vote for a millisecond, but I'm beginning to worry about some
of the cabinet short-listers.
Larry Summers is a problem -- a BIG problem. His remarks about what he perceived to
be differences in men's and women's innate abilities, delivered at the 2005 Conference on Diversifying the Science & Engineering
Workforce, betrayed an alarming isolation from modern ideas and an ignorance of science. Do we really need this guy at Treasury
... or anywhere else in government? Is it really okay to retain outmoded and dangerous ideas about women in the service of
"change?" Nope.
What we're seeing develop is a government with a healthy sprinkling of the "new old boys," including
Larry Summers. This female voter strongly opposes the appointment of Summers to ANY post in the new government.
The
irony is truly amazing ... Obama's surrogates suggested during the primary campaign that a vote for Hillary Clinton meant
a vote for the return of Bill Clinton and his cronies. Looks like the new boss is same as the old boss.
The whole argument f the inequity of wealth increase over the lst 20 years is a specious one...
You see, in a non
inflationary period, wages generally keep pace with inflation; in other words they increased about as much as the inflation
rate did year over year. But, the stock market has traditionally out-performed the inflation rate.
So it's easy to
see that higher paid folks, who could afford to take risks and be involved in the market, stood a greater chance of increasing
their wealth more quickly than those who simply worked for wages tat were paid by others...
It's simple, and not unfair
one bit...
Dear President Elect Obama,
Larry Summers said women can't do math and that toxic waste should be stored in the
third world, since folks there had short life expectancies anyhow. While Summers was head of the World Bank, I saw first hand
the failure and corruption of his aid packages that increases exploitation and land theft from third world farmers, supported
corrupt regimes and corrupt first world contractors, and furthered the impoverishment of people and the environmental ruin
of their communities. At the time I consulted with human rights and international development organizations. How can you take
such a racist and misogynistic man like Larry Summers seriously and offer him the dignity of space on your President elect
advisory committee on the economy? As a Ph.D. and former academic on international development, I see nothing but failure
from Summer's deceitful policies and practices.
As a woman who now makes a living "doing the numbers", a successful
financial advisor specializing in socially responsible investing, I am appalled at Summer's comments on women's mathematical
abilities. How would you feel if he said black men can't do math? How would you feel if he rationalized dumping toxic waste
on South Chicago for that matter? My husband, a math professor and former university dean, is equally offended by Summers
and your placing him on your committee.
Lawrence Summers, is closely linked to former Fed Chairman (and current Public Enemy No.#1.- ALAN GREENSPAN to be a wise
choice. Plus, the hash Summers made out of Harvard's presidency suggested that even after holding one of the highest positions
in government, Summers still was pretty clueless about getting along with other people"a crucial skill for whoever ends up
managing the worst financial panic since the Great Depression.
Greenspan and his cohorts have brought the country to
their news. Enough already with them!
Summers is a very bad candidate for Obama's cabinet!! Not only did the Harvard fiasco reveal his sexism (what a slap in
the face to the many women who supported Barack, both in the primaries and in the general election) but also his abysmal leadership
skills. Had he not been so arrogant, so unable to communicate to the lowly faculty, they never would have kicked him out.
Instead, he had burned his bridges long before the whole sexist issue broke out.
What about his attitude toward African-American
scholars? He basically declared war on the whole African-American studies program at Harvard--a group of the most respected
black intellectuals in the nation. He treated them with public disrespect, and drove many of them to other universities. How
is this a good kind of guy for an Obama team?
What about effectiveness? Bob Rubin was an effective Treasury Secretary,
but when Summers succeeded him he proved to be a loser. Obama will need someone who understands the markets and can communicate
with Wall Street and with Congress. When Summers tries to communicate he just makes enemies because he is so arrogant. Obama
does not need enemies, he needs to get people enthusiastic about working with him.
i'm not so excited about larry summers. however, just for kicks, i wanted to share a story i heard about him. one of my
best friends from high school started at harvard when summers was first starting there. as part of the new orientation festivities,
there was a freshman mixer, and surprisingly enough, the new president showed up. my friend and some people were standing
around and not sure how to interact with him, and finally one of the girls went up to summers and asked him to dance. he said
yes. right at the moment the girl and summers went out to the dance floor, nelly's "it's getting hot in here" started playing.
and if i remember correctly, summers then proceeded to remove his tie...
so i while i was sorry that he said such stupid
things and think there are better choices for treasury, i have to say that i'll always have an affection for him thanks to
that story.
I am hopeful about the next four years, but I will be so disappointed if Summers has a role in Obama's administration. There
was the whole debacle at Harvard (Summers basically saying that maybe the reason there fewer women in math and science is
that they innately have less ability in those fields)--you know, the same biological determinism argument that has been used
to justify slavery and denying women the vote... Then there was Summers' little "thought experiment" advocating movement of
polluting industries to Africa and other developing countries. Maybe it wasn't serious, but it was in very poor taste. The
man has a severe case of foot-and-mouth disease and I don't want him back in the vicinity of the White House.
It wasn't just Summer's questionable statements about women and science; he was a bad administrator. I'm surprised that
the Obama team wants to bring on Clinton folks, especially for the economy. While I reject the right-wing's and MSM's claims
that the economic crisis was all Clinton's fault, it is clear that his attempts to compromise through economic policies did
contribute to what we're experiencing now.
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