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Larry Summers is worried about 'enormous damage' to the economy

Andy Serwer
Editor in Chief

Former Treasury Secretary Larry Summers had strong words for the economic policies and the rhetoric coming from the Trump Administration. In a wide-ranging interview in his offices at Harvard University, Summers called the new administration’s pronouncements on trade for instance “wildly irresponsible” and “potentially very dangerous.”

Summers, former president of Harvard, was Treasury Secretary during the Clinton Administration and as Director of the National Economic Council, was also the chief economic advisor to President Barack Obama. Summers acknowledged that it is “very early days yet to pass judgment,” but was clearly not particularly sanguine about the administration’s direction.

I asked Summers what his take was on the overall economic platform of the Trump administration.

“We’ll have to see how the policies evolve. At this point, the details of tax legislation haven’t been spelled out. At this point, the details of what’s going to replace Obamacare have not been spelled out. At this point, there’s been a lot of attitude, but not yet a clear indication of what the new trade policies are going to be. We haven’t yet seen a budget proposal from the new administration,” Summers said.

U.S. President Donald Trump waves as he steps from Air Force One upon his arrival in West Palm Beach, Florida, U.S., February 17, 2017. REUTERS/Kevin Lamarque

“So, I think it’s very early days yet to pass judgment. I think the instinct that business confidence is an important issue, I think that’s a valid instinct, and I approve of that. I think the things that have been said in the trade area are wildly irresponsible, and potentially very dangerous. I think the proposals on regulation could do enormous damage to the environment, to financial stability, to the functioning of the economy,” he said.

“I think that the Obamacare changes run the risk of both raising health care costs, and leaving millions of people without health insurance,” said Summers. “And I think the sense of uncertainty that’s being introduced is something that’s potentially very dangerous. And my fear is that all those downsides will catch up with the positive element, which is a sensitivity to business confidence. And my fear is that it will turn out that the strength in markets will be seen in retrospect as having been something of a sugar high.”

More from our interview with Larry Summers:

Full Interview: