the president-elects plans for deregulation were setting the stage for the next financial crisis.
The deregulation in some areas like finance is hugely dangerous, Summers said Sunday in an interview on Fox News Channel. Who wants to go back to the era of predatory lending? Who wants to go back to the era of vastly over-levered banks?
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Summers, former chief economic adviser to President Barack Obama and Treasury secretary under President Bill Clinton, also took aim at Trumps protectionist rhetoric. Thats already caused a plunge in the Mexican peso, giving Mexican manufacturing an extra advantage over U.S. competitors.
Every business deciding whether to locate in Ohio or Mexico is finding Mexico 20 percent cheaper, said Summers, whos now a Harvard University professor. Thats a huge tilt against the United States.
The peso has lost 14 percent against the dollar since the Nov. 8 election.
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Trumps plans to reduce corporate taxation, Summers said, would hugely increase inequality and could also help strengthen the dollar, further hurting U.S. exporters and the people who work for them.
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While Summers favors a big increase in infrastructure spending in the U.S. as a way to boost productivity and growth, he called Trumps plans on that front a Potemkin village of nothing.
Trumps proposal called for filling an estimated $1 trillion 10-year funding gap of spending on bridges, highways and airports through private investment and tax credits. Prospects for the plan in Congress among Republican lawmakers are unclear.
https://www.bloomberg.com/news/articles/2017-01-08/summers-warns-of-financial-crisis-risk-from-trump-economic-plans