On a recent whirlwind tour of Asian capitals, peripatetic U.S. Deputy Treasury Secretary Larry Summers offered some advice on how to cure the region's economic ills. Despite his stature as an economist, he sounded more like a politician spouting protectionist platitudes. Implicit in his commentary was concern over Asian economies' growing trade surpluses with the United States, especially in steel and semiconductors. Using the specter of revised Super 301 legislation, which would impose sanctions against countries deemed to be engaged in "unfair trading" practices, Summers encouraged reliance on macroeconomic stimulation rather than on an export-led revival.

Care should be taken, however, in interpreting Summers' remarks on the advisability of fiscal stimulus and expansionary monetary policy. It should be noted that he was not among the few economists who anticipated the Asian crises. His credibility as a dispenser of cures for these crises is surely undermined by the fact that he did not see the underlying problems that caused them.

While he is right to see that the basic issue is promoting growth in the domestic sector of a nation's economy, there are several ways to approach this. On the one hand, the long-term view focuses upon the restructuring of banks and businesses while restoring purchasing power to households and businesses through deep tax cuts.