Lawrence H. Summers on the Post-Pandemic Economy
Lawrence H. Summers is known as one of America’s leading economists. He is a Charles W. Eliot University Professor and President Emeritus of Harvard University. Summers served as the 71st Secretary of the Treasury for President Clinton, Director of the National Economic Council for President Obama, and Vice President of Development Economics and Chief Economist of the World Bank.
Secretary Summers spoke to the Association of Foreign Press Correspondents (AFC-USA) on the pros and cons of President Biden’s pandemic relief plan, the economic impact of COVID-19 on a global scale, and the future of international relations post-pandemic.
The following are five takeaways from our discussion with him.
Life will ease back into normalcy. Lawrence H. Summers is optimistic for the American economy. Between the 1.7 million people a day being immunized in the U.S. and the 107 million people globally who have already been infected, Summers predicts a slowing down of the pandemic by this summer. Summers also predicts that the economy may recover due to government economic support programs that will increase support to households by tenfold and we may see the largest fourth quarter growth in decades.
Economic relief may bring unpredictable impacts to our future economy. On the downside, Summers is wary of the chance of increases in inflation and possible challenges policy makers will have trying to control an expanding economy. He is also concerned that President Biden’s 1.9 trillion relief program may go beyond what is necessary for government spending and that people may have more money that can be put back into the economy.
Besides the pandemic, our main concern should be recommitting our efforts to climate change. Summers views climate change as one of the largest major threats to national and global security. He believes that global powers need to work together to address climate change and we do not have the option of rejecting the idea that we have a global system. The only viable option is to focus more on cooperation and less on corporations.
America’s economy needs more than just another stimulus. Summers is in firm support of raising the minimum wage to $15 for most of the country. He states that it is “not appropriate for the U.S. to have the same minimum wage as 20 years ago, and it should not be lower than the minimum wage during Reagan’s term”.
Our main goal for the future should be global cooperation. Summers hopes that the COVID-19 pandemic will help to strengthen foreign relationships and that the “common adversary of the virus will cause a greater appreciation of common humanity”. His advice for future generations is that “we have no monopoly on wisdom, collaboration and compromises lead to success. Strategic empathy leads to better outcomes”.
