Chip Somodevilla/Getty Images - Larry Summers announced in September that he would step down as President Obama's top economic strategist and head of the National Economic Council. Obama named Summers's replacement, Gene Sperling, on Jan. 7, 2011.
Lawrence H. Summers, a former Treasury secretary and White House economic adviser, has agreed to co-chair a new think-tank project aimed at supporting President Obama’s second-term goal of reviving the economy by rebuilding the middle class.
The Growth and Competitiveness project will be housed at the progressive Center for American Progress, where Summers will also serve as a “distinguished senior fellow,” the center plans to announce Monday.
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Summers’s co-chair will be David Miliband, a British Labor Party politician and member of Parliament and former British foreign secretary.
Summers’s appointment adds intellectual heft to the center’s ongoing efforts to provide a counterweight to Republican supply-side economic theory, which has animated the GOP for nearly four decades. That theory undergirds the current battle by congressional Republicans to ward off higher tax rates for the rich as part of negotiations over the year-end “fiscal cliff.”
Instead of catering to the wealthiest, whom the GOP have dubbed “job creators,” many Democrats argue that Washington should adopt a new economic model that recognizes middle-class consumers as the true engine of American prosperity.
“Supply-side economics — in its crude form that emphasizes marginal tax rates as a dominant determinant of economy activity — I think has been largely discredited,” Summers said. “But there’s a need to develop a broader range of policies that are focused on the middle class. . . .
“The defining characteristic of successful economic policy in any country is what it does for middle-class families, and by that standard we’ve been having trouble in this country for quite some time.”
Obama made this “middle-out” theory a centerpiece of his successful reelection campaign, contrasting his vision with the GOP argument that prosperity “trickles down” from above. It is likely to grow even more prominent during his second term, for which Obama has sketched out an agenda focused on middle-class tax cuts and new federal investments in education, infrastructure and advanced manufacturing.
Summers, 58, helped develop those themes as head of the National Economic Council during the first two years of the Obama administration. His primary focus during his time in the Obama White House was developing policies to blunt the impact of the worst recession since the Great Depression.
Summers served as Treasury secretary under President Bill Clinton. After leaving the Obama administration, Summers returned to teaching economics at Harvard University, where he also served as president from 2001 to 2006.
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