I suspect that Summers could be leaving now because he thinks that next year will be an economic train wreak. If the economist Arthur Laffer is correct in that many businesses who can afford it will push their capital spending into this year to capitalize on the Bush tax code, then next year will really pull a strong vacuum. Laffer was expecting enough capital spending to bring unemployment down to perhaps 7%. If 9.5% is the best we can do, then next year I'm expanding my garden (Again!). If I were Larry Summers, Christina Romer, or Peter Orszag; I wouldn't want my fingerprints on this mess either.
quote:
“In anticipation of known tax increases the economy will shift income and output from 2011 -- the higher tax year -- into 2010 -- the lower tax year. As a result of this income shift, 2010 will look a lot better than it should, and 2011 will be a train wreck,” he predicts.
“GDP growth in 2010 will be some 3 to 4 percent higher than it otherwise should be, thus green shoots,” he said. “The transfer of income from 2011 into 2010 will not only make 2010 [economic growth] higher than it otherwise would be, it will also make 2011 [economic growth] 3 and 4 percent lower than it otherwise should be because people have shifted income out of 2011 into 2010.”
“The effect of the shift in income on GDP growth in 2010, however, is going to be fairly substantial, but when the U.S. economy comes to 2011, the train’s going to come off the tracks.”
http://www.humanevents.com/article.php?id=35341