What Rajan had that Summers didn't

.....There’s another major difference: Summers was on the wrong side of one big question, while Rajan was on the right side – and that’s on whether the increasing financialisation of the US economy that began in the late 1990s posed a systemic risk. Rajan, famously, warned a gathering of central bankers in 2005 at the height of the Alan Greenspan era that modern finance had made the economy more vulnerable. In response, Summers snapped the way he would have in a seminar room – Rajan’s views where “slightly Luddite”, he said. Summers had, of course, led the drive towards deregulation in the Clinton Treasury. But he was wrong and Rajan was right..................

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