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Friday, October 20, 2006
  Summers and the Hedge Fund: The Plot Thickens
Writing for the Bloomberg news service, Brett Cole and Katherine Burton suggest a new reason for D.E. Shaw & Co. to hire Larry Summers: influence-buying.

As this introduction to the article notes,

The Treasury Department is currently conducting an inquiry into hedge funds, in order to determine if further regulation of the $1.3 trillion industry is needed.

Under those circumstances, then, it can't hurt to have a former Treasury secretary on your payroll, helping make contacts with current officials, doing his best to argue that further regulation really isn't required.

Is it a coincidence, then, that Summers and former Treasury secretary John Snow were hired by different hedge funds on the same day?

Before some of you rush to criticize me for this, please note that this isn't my suggestion—it's clearly the article's implication.

The revolving door between Wall Street and Washington has been spinning this year, with Henry Paulson, former Goldman Sachs Group Inc. chairman, taking over for Snow at Treasury. Those who've traded government for finance include Paul O'Neill, Snow's predecessor at Treasury; former Secretary of State Colin Powell; and John Edwards, former vice presidential candidate and senator from North Carolina.

And by the way, the stakes are high indeed: David Shaw, Summers' new employer, made $340 million last year. That's 340, 000, 000.
 
Comments:
1.Are we to believe that ex-Clinton appointee Summers will have influence with the current administration?

2. Why doesn't the Crimson ask Summers how much time and energy he has agreed to devote to his new job (located in NYC), and compare that with Cornel West's work on a rap CD which Summers chastised him for--surely it is worthwhile to define the appropriate outside work of University professors at Harvard.
 
1) Yes, I think so, sure. It's a small world, this group of Treasury folks, and less partisan than in some other departments. Plus, there's always the next administration to think of.

2) To be fair, LS is on sabbatical. The question would be more relevant next year...but then, since he doesn't technically have to teach at all in his new gig, maybe it will never be relevant. Nice work if you can get it.
 
1. Even more influence because Summers' views on this are the same as the administration's, and will give them cover.

2. Remember. It was Cornel West's activity while he was on leave that Summers criticized. West had just come back from leave before the notorious encounter.
 
Remember that Cornel West was also a university professor and did not have to teach.
 
Are you suggesting that a RAP CD directed to African American youth should be valued equally by Harvard than a closed investment fund for extremely high net worth investors?

Or is the implication of your message that this outside engagement of Professor Summers is a litmus test of whether Presidents Summers and Bok have different standards regarding the value of outside activities of the faculty and regarding how to engage faculty regarding their obligations to the University?

Or perhaps you are asking whether this situation is a test for the rest of the leadership in the President's Office who were leaders then and are leaders now to communicate to the faculty where they stand on these issues?
 
To Poster 6:11. University professors have to teach a regular load. Typically they teach more courses and more students. Sen, for example, teaches more courses each year than his colleagues in Economics. Hoffman taught more than some of his Government colleagues (who teach more than Economics faculty). Greenblatt, Michelman, and most of the others ae dedicated teachers. West was was teaching more students when he was here than most non university professors.
 
The post at 9.25 is deviously clever. Will anyone respond?
 
Outside interest in both Cornel West and Larry Summers is consistent with the profile they carry outside academia, they just happen to be in spheres of influence that seldom overlap.

In their respective fields, both occupy a position of strength and prestige, yet they both suffer from conlficts of personality that serve to alienate as much as they engage: they are polarising figures of great intellect, yet stumble in everyday matters of working with other people.

Larry and Cornel have an awful lot more in common that either would likely assume.
 
Google Scholar lists 3,790 references to the work of Lawrence Summers --most of these papers with others where is not the principal author. Google Scholar lists 3540 to the work of Cornel West.

To put these figures in perspective, it lists 6,180 references to the work of Jeffrey Sachs (a classmate of Summers at Harvard who left Harvard soon after Summers became president), and 13,200 to the work of Amartya Sen, 15,500 to the work of Milton Friedman.

It appears that unless Professors Summers and West curtail their outside activities they will never be able to catch up with the truly great scholars.
 
Perhaps, if greatness is measured in google citations.

I don't think there is an argument here. Rap music is inherently foolish and embarrassing to the university, and trying to make money isn't. Someone had to say something to West or it would appear that the Harvard administration was of the view that rap music has academic merit.

And after all of the misery Larry Summers has had to put up with (inflicted by this blog, militant feminists, lazy professors, etc.), can you blame him to trying to make a buck.
 
Re: the google scholar citations. It's totally absurd to compare the number of citations to work produced by Summers, who has been out of academia since 1991 and hasn't been in the business of producing papers, to the number of citations to work by people like Cornel West, who has been a professor for his entire career.
 
Perhaps it is absurd to compare Summers' scholarly productivity to West's.

However, since Summers changed the criteria to tenure professors at Harvard there is reason to ask whether the standards he instituted would apply to him. As President Summers turned down several candidates for tenured appointments approved by FAS committees and by ad-hoc committees because they were "past their prime".

Summers is past fifty, thus by the standards he instituted past his own prime, and holds the highest Professorial appointment Harvard confers. Is it unreasonable to expect him to maintain the scholarly productivity of a Harvard University Professor.

Since Cornel West's performance may be a poor benchmark, as they work in different fields, a better benchmark would be Jeffrey Sachs. Sachs and Summers were classmates and began their careers at the same time. Some of their professors in Harvard's economics department used to place bet as to which of them would end up leaving the greatest footprint.

Sachs, who was advising the government of Russian when Andrei Schleifer entered the scene, was 'pushed out' of Russia by a convergence of interests which included maneuvering by AS and his protectors.

When the US government began an investigation into the activities of AS in Russia Sachs --who directed Harvard's Center of International Development out of which AS was doing his work in Russia-- found himself in deep disagreements with the Harvard administration. In the end he left Harvard to Columbia.

As it turns out Sachs went on to become one of the most influential development economists alive. Advising Kofi Annan, travelling the world with Bono, and publishing academic papers and best sellers alike. Not only is the number of citations to his work twice that of Summers' in Google Scholar but Google has 750,000 citations to him and not a single one of them is to a scandal.

So it may be fitting for Harvard's current leadership to ask whether Columbia University is a more conducive environment to the academic productivity of their Professors. There may be useful lessons that could be drawn as to which Presidential practices best help universities achieve their core mission. On the other hand, perhaps the differences in the scholarly footprint of Summers and his classmates are just a matter of individual differences among graduates of the same class of Harvard's economics department.
 
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