Why Is Larry Summers So Obsessed With Tech Bros?

For the past two years, former Treasury secretary Larry Summers has begged, berated, and bullied federal policy-makers to suck as much wealth as possible, as fast as possible, out of the economy. He just never meant, you know, his wealth or his friends’ wealth.

When Silicon Valley Bank (SVB), which caters to venture capitalists and tech start-ups, collapsed last week, Summers rushed to protect his professional colleagues and fellow elites from the consequences of policies he’s pushed for. In Summers’s eyes, when tech moguls make obvious mistakes, it’s catastrophic for them to face consequences for their actions. But when workers want debt relief, sick days, or higher wages, they’re destroying the whole economy with their greed.

Since 2021, Summers has consistently argued that our present bout of inflation is a result of American workers’ enjoying too-high wages and too-generous government benefits from the Covid-19 relief bills. Summers claims that this aid caused money to circulate throughout the economy faster than companies could produce goods and services to purchase. In turn, he says, this caused the price spikes we’re enduring today, which can be lowered only by making workers poorer and more desperate for work.

To achieve this goal, Summers has taken every opportunity to focus government policy on emptying the wallets of the working class. On July 22, he castigated the moratorium on student debt payments, because every dollar that doesn’t go to paying loans might go to groceries, clothes, or other consumer goods. When railroad workers threatened to strike for paid sick leave last September, he told the Biden administration “to pay attention to holding costs down rather than rewarding workers,” and added, “I worry about provisions that seek to enshrine high wages, for example, in those who are producing goods related to the environment.” He showed particular anger at the idea of reshoring manufacturing jobs. (Summers engineered many of the free-trade deals in the 1990s, which hollowed out American manufacturing in the first place.)

He found a giddy audience in Fed Chairman Jerome Powell. After his reconfirmation by the Senate last year, Powell began rapidly ratcheting up interest rates to slow down business lending and suck more money out of the economy. It takes months for economic actors to feel the effects of interest rate hikes, yet Summers has screamed for Powell to keep up the pain, taunting that stopping early risked the Fed’s “credibility.”

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