Larry Summers might have been the chairman of the Federal Reserve, and now all he can do is offer unsolicited advice on interest rates in newspaper columns. The question is whether the people who kept him out of the central bank are having second thoughts.

Under Janet Yellen, who got the job instead, the Fed now thinks that the economy is strong, and it is planning to raise interest rates relatively soon. This could be a bad idea, Summers writes in The Washington Post. Yes, low rates could lead to higher prices, but the whole economy is in danger if the Fed takes its foot off the pedal and lets rates come up:

A plane that accelerates too rapidly as it takes off may cause its passengers some discomfort, while a plane that accelerates too slowly may crash at the end of the runway. Historical experience is that inflation accelerates only slowly, so the costs of an overshoot are small and reversible with standard tightening policies. In contrast, aborting recovery and risking a further slowing of inflation is potentially catastrophic — as Japan's experience over the past quarter-century demonstrates.

Summers calls on the Fed to wait for "clear evidence" on increasing inflation. Doing so would help ordinary Americans, he writes, suggesting that unemployment could fall much further before prices begin to rise again. His column puts workers first, and it should please liberals in Congress like Sen. Elizabeth Warren (D-Mass.). Yet when she and many of her colleagues gave Summers the cold shoulder, Obama nominated Yellen instead.

At the time, Yellen's supporters believed that she and Summers had similar views about interest rates, but that she would do a better job of regulating the financial sector. Perhaps Yellen would agree with everything in Summers column, but isn't able to get the other members of the Fed to go along with her. Maybe Summers wouldn't be able to do things differently if he were in Yellen's seat right now. Yet there are major differences between the two economists. While Yellen has argued that the United States is mostly safe from economic instability overseas, Summers writes that "the United States has never been more intertwined with the global economy."


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What's in Wonkbook: 1) Clinton prepares campaign 2) Opinions, including Ponnuru on inequality 3) Baseball's weird exemption from monopoly laws, and more

Number of the day: 268,000. That's the average number of jobs the economy has added monthly over the past 12 months, the most in the past 15 years. Matt O'Brien in The Washington Post.

1. Top story: Clinton gets ready to run

Clinton is drawing up an economic platform for a possible presidential campaign. "With advice from more than 200 policy experts, Hillary Rodham Clinton is trying to answer what has emerged as a central question of her early presidential campaign strategy: how to address the anger about income inequality without overly vilifying the wealthy. ... Although people close to Mrs. Clinton say she has not yet settled on a specific platform, she is expected to embrace several principles. They include standard Democratic initiatives like raising the minimum wage, investing in infrastructure, closing corporate tax loopholes and cutting taxes for the middle class. Other ideas are newer, such as providing incentives to corporations to increase profit-sharing with employees and changing labor laws to give workers more collective bargaining power." Amy Chozick in The New York Times.

Sen. Bernie Sanders (I-Vt.) promises "a clash of ideas" if he and Clinton both decide to run. "'I happen to like and respect Hillary Clinton, but I suspect on issues like massive investments in infrastructure, on real tax reform, on the need to deal in a very bold way with the planetary crisis of climate change, with the transpacific partnership, I suspect we will have some real differences' ... His wish-list includes robust infrastructure spending, raising the minimum wage and a 'national health care program that guarantees health care' to all." Ben Kamisar in The Hill.

BALZ: What kind of candidate will Hillary Clinton be? "She is determined to put together a campaign organization that is markedly different from the one she had in 2008, designed to avoid both the tactical and strategic mistakes that contributed to her undoing against Barack Obama and the debilitating infighting that plagued the inner circle of what became for a time a dysfunctional campaign. ... Enough questions remain from her last campaign that she cannot long afford to take for granted her position atop the Democratic field. How, for example, does Clinton demonstrate to voters in Iowa, where she stumbled in 2008 and where activists expect serious courtship, that she will be a better and more accessible candidate this time? She is reluctant to begin too early, but is she prepared eventually to travel more extensively there than before?" The Washington Post.

2. Top opinions

PONNURU: Republicans shouldn't talk about inequality. "Inequality does not appear to be an issue that moves voters, and even if it did, Republicans would not be able to come up with an agenda that does much to reduce it." The New York Times.

HANAUER: Stock buybacks are destroying the U.S. economy. "Last year alone, U.S. corporations spent about $700 billion, or roughly 4 percent of GDP, to prop up their share prices by repurchasing their own stock. ... So what's changed? Before 1982, when John Shad, a former Wall Street CEO in charge of the Securities and Exchange Commission, loosened regulations that define stock manipulation, corporate managers avoided stock buybacks out of fear of prosecution. ... It is mathematically impossible to make the public- and private-sector investments necessary to sustain America's global economic competitiveness while flushing away 4 percent of GDP year after year." The Atlantic.

COATES: Obama is right about religion and violence. "People who wonder why the president does not talk more about race would do well to examine the recent blow-up over his speech at the National Prayer Breakfast. Inveighing against the barbarism of ISIS, the president pointed out that it would be foolish to blame Islam, at large, for its atrocities. ... There were a fair number of pretexts given for slavery and Jim Crow, but Christianity provided the moral justification." The Atlantic.

VINIK: Sen. Rand Paul (R-Ky.) has dangerously bad economic views. "Of course, the Republican Party itself has an incredibly misguided position on monetary policy. In 2012, its platform included returning to the gold standard. That’s a good reason why just about any Republican nominee would be a dangerous president. But Paul is far more open about his disdain for the Fed, and given his ideological bent, he's far less likely to listen to conservative economists who reject his monetary policy views. At least on the economy, that makes Rand Paul by far the most dangerous candidate in the 2016 field." The New Republic.

SILBERMAN: Bush didn't lie about Saddam Hussein's weapons of mass destruction. He believed what he said, and so did everyone else. "As I recall, no one in Washington political circles offered significant disagreement with the intelligence community before the invasion. The National Intelligence Estimate was persuasive—to the president, to Congress and to the media." The Wall Street Journal.

3. In case you missed it

The Consumer Financial Protection Bureau will write rules for payday lenders. "They are chameleons: payday lenders that alter their practices and shift their products ever so slightly to work around state laws aimed at stamping out short-term loans that can come with interest rates exceeding 300 percent. Such maneuvers by the roughly $46 billion payday loan industry, state regulators say, have frustrated their efforts to protect consumers. Now, for the first time, a federal regulator is entering the fray, drafting regulations that could sharply reduce the number of unaffordable loans that lenders can make." Jessica Silver-Greenberg in The New York Times.

Flexibility for student borrowers is proving more expensive than the government anticipated. "There's a big caution sign appearing in front of the government's generous program to let borrowers cap their monthly student loan payments to a percentage of their earnings. Use of so-called income-driven plans could cost $22 billion more than the government expected, raising concerns about the sustainability of a cornerstone of the Obama administration's education policy." Danielle-Douglas Gabriel in The Washington Post.

The city of San Jose is appealing to the Supreme Court to overturn baseball's monopoly. "It is impossible to write about efforts to reverse one of the Supreme Court’s most famous rulings — some would say most famously misguided — without resorting to sportswriter prose, as a panel of the U.S. Court of Appeals for the 9th Circuit recently showed. 'The city of San Jose steps up to the plate to challenge the baseball industry’s 92-year-old exemption from the antitrust laws,' Circuit Judge Alex Kozinski began. ... But it would be wrong to hold out the promise of a 9th inning rally or walk-off home run for San Jose, which wants the Oakland Athletics to play in a new downtown stadium but cannot get Major League Baseball to approve the move." Robert Barnes in The Washington Post.


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