Shots in the Dark

My congressman, the thoroughly corrupt Charlie Rangel, is in trouble—again.

Yesterday the NY Post reported that he’s been cheating on his taxes—again.

And today the NY Times reports that, as head of the House Ways and Means Committee, he fought for a tax break for a company that gave $1 million to a graduate school named after Rangel, the Charles B. Rangel School of Public Service at City College of New York.

The school is already an embarrassment. Created with the proviso that it provide Rangel an office after his retirement and house his papers, such as they are, it was funded with a $2 million earmark Rangel pushed through Congress.

(Rangel also used congressional stationery to solicit donations for the school, though the 100 letters he sent out to corporations produced gifts of only $1.6 million.)

Rangel claims that he didn’t even know of the $1 million donation, which is, of course, a lie.

The tax break involved allowing four companies to avoid paying US taxes because they had opened offshore offices in the Caribbean. Rangel initially bitterly opposed it. Then, after the donation, he avidly supported it.

But in 2007, when the United States Senate tried to crack down on the companies, Mr. Rangel, who had recently been sworn in as House Ways and Means chairman, fought to protect them. The tax shelter for the four companies was preserved, saving Nabors an estimated tens of millions of dollars annually and depriving the federal treasury of $1.1 billion in revenues over a decade, according to a Congressional analysis by the nonpartisan Joint Committee on Taxation.

What a wonderful, terrible irony! In order to fund a school of public service with a bribe of one million dollars, a crooked congressman mandates a tax break that costs the taxpayers….a billion dollars.

Just for the record, I voted for the Republican in November. I don’t even know what his name is, and I knew he didn’t have a snowball’s chance in hell of winning. But Rangel must go.

Two final points: First, good for the Times. Another affirmation of the importance of print journalism.

And second, someone seems to have it out for Rangel: There’s a steady drip-drip of bad news about him, and that probably isn’t a coincidence.

Long ago when I lived and wrote in Washington, I developed a theory about when it was time for a politician to go: When there was so much bullshit coming out of his mouth that even he no longer had any idea what was true and what was nonsense, it was time for that pol to move on. Or for the voters to make him do so.

(I developed the theory, by the way, while reporting a story about Dick Gephardt.)

Watch as Joe Lieberman reaffirms that theory on Meet the Press. Probably 90% of everything he says in this clip is either utter nonsense or demonstrably untrue—which is to say, a lie.

And watch as, about 5:50 in, Lieberman can’t bring himself to apologize for anything he did during the campaign. It is there any better definition of hubris than the inability to speak the words, “I’m sorry”?

I wrote in this space a couple weeks ago about Larry Summers’ decisive attempt to block Commodity Future Trading Commission chair Brooksley Born’s proposal for the regulation of derivatives.

Here’s some interesting material from an April 27 Times piece on Rubin which reminds us that Rubin, too, opposed regulating derivatives, the financial instruments which have played a large part in bringing us to the current economic crisis. [Emphasis added]

…on at least one occasion, Mr. Rubin lined up with Mr. Summers as well as Mr. Greenspan to block a 1998 proposal by the Commodity Futures Trading Commission that would have effectively moved many derivatives out of the shadows and made them subject to regulation.

…At an April 21, 1998, meeting with Brooksley Born, the chairwoman of the commodities commission, Mr. Rubin made no secret of his feelings about her proposal. “It was controlled anger. He was very tough,” [commission attorney Michael] Greenberger recalls. “I was at several meetings with him, and I’ve never seen him like that before or after.” Ms. Born didn’t return calls for comment.

Mr. Rubin says he was against the proposal because he feared it could create chaos in the markets, rather than actually improve oversight of derivatives.

Nope. Wouldn’t want to create chaos in the markets.

Why does this matter?

Because as Treasury secretary, Bob Rubin imposed lending policies on foreign nations in crisis which were devastating to poor people but safeguarded the investments of Wall Street banks such as Goldman Sachs—which is to say, Rubin’s old firm.

He also, as we now see, opposed the regulation of financial instruments pioneered and used to great profit (at the time, anyway) by, um, Goldman Sachs. Instruments which, ultimately, the taxpayers will pay for.

Now he has drained $150 million from Citigroup, and is surely working the phones to get the government to bail out that employer.

And yet, Rubin largely maintains a reputation as a disinterested public servant whose proteges are even now populating the White House.

Curious, that.

The well-regarded UC-Berkeley economist is the new chairman of the Council of Economic Advisers.

And here’s another interesting thing about her: She was supposed to leave Berkeley for Harvard, until Drew Faust mysteriously rescinded Romer’s tenure offer.

As the Times puts it,

There was never any public explanation for Harvard’s decision.

There rarely is. Anyone out there know what happened? Did Drew Faust, Harvard’s first female president, really nix Romer because, as David Warsh argues, Romer had been a member of a visiting committee that criticized Harvard’s economics department for its disinclination to hire women?

Whatever happened privately, publicly Drew Faust and the Harvard economics department look silly on this one. They lost an opportunity to have signed on another economist now snapped up by the president-elect.

…having brunch in the West Village yesterday afternoon, not long before the Giants’ glorious victory over the Cardinals, and a group of people pushed ahead of my friend and me as we entered the restaurant. The maitre d’ started seating them and smiled and said hello, how are you?

One of the party, a burly, bearded man wearing expensive glasses, mumble-growled “fine” under his breath without even looking at her.

He was kind of a jerk, wasn’t he? I said to my friend.

So then of course it turned out to be Julian Schnabel.

Which may not have made him any less grouchy, but certainly was a good celebrity sighting. Plus, he has a beautiful family.

I was deeply moved by The Diving Bell and the Butterfly—it reduced me to tears and had me appreciating life more fully for some time—and I considered buying the Schnabels brunch as a sign of my appreciation. Sadly, there is a recession, so I did not.

The Times looks at Bob Rubin’s political influence while giving some gentle reconsideration to his economic halo.

While noting that various people whom Rubin has mentored are rising to power in the Obama administration—sometimes returning to power—the paper writes,

On Wall Street, Mr. Rubin is facing questions about his role as director of Citigroup given the bank’s current woes. And in Washington, he and his acolytes are calling for a new formulation to address the global economic crisis that Mr. Obama will inherit — and rejecting or setting aside, for now, some of their old orthodoxies.

Among those orthodoxies: balanced budgets, which we’re not going to see for a while, and deregulation, ditto.

As for Mr. Summers, he has “truly evolved,” [liberal economist Jared] Bernstein said, based on his reading of Mr. Summers’s columns in the Financial Times this year. Both men have been advisers to Mr. Obama, and at a recent meeting, Mr. Bernstein recalled: “I told him, ‘Boy, Larry, your views on trade, on income inequality, on stimulus spending, they’re approaching ours at E.P.I.’ And he sort of huffed and puffed, and said, ‘Oh well, changing circumstances.’ ”

No one who knows Larry Summers can imagine him huffing and puffing.

Bernstein implies a question that I’ve been pondering for some time now. Certainly there can be virtue in flexibility, but as I asked recently on this blog, what exactly does Larry Summers believe, or than that which will advance him politically? His current positions are tailored to the inclinations of Barack Obama just as his past ones were to Bob Rubin and Bill Clinton.

I’d very much like to hear someone familiar with economic thought tell me what Summers has consistently advocated. (I tried to ascertain this when I was writing Harvard Rules, but failed.)

Why does this matter? Because Summers is, according to the Times, the man most responsible for promoting the $500 billion economic stimulus plan—a plan which would put the man in charge (i.e., Summers) in a position of vast power. A stimulus plan means the allocation of huge sums of money, and as anyone in Washington (or Harvard, for that matter) knows, when you have money to dispense, you are powerful indeed.

When Summers’ advice happens to elevate his own status within the Obama administration, can we say with confidence that it is disinterested?

Already it sounds like some of the concerns about Summers’ personality are resurfacing.

By all accounts, the trait that ties the 70-year-old Mr. Rubin and the younger men is their braininess. All but Mr. Summers are seen as cautious about policy. And all but Mr. Summers share their mentor’s low-key affability and conversational ease; many wonder just how Mr. Summers, whose brusque ways left a trail of enemies when he was president of Harvard, will perform as director of the National Economic Council in the White House when the job demands someone who can coordinate with others, listen to them and fairly represent their views to the president.

“There’s no way he will be confined to the N.E.C.’s turf; he will be sticking his nose into everything,” said Bruce Bartlett, a Treasury veteran of the Reagan administration…..

The Times piece notes that Rubin “privately” favored giving Larry Summers a second chance as Treasury secretary. That word “privately” is fascinating. First, what does it mean? That Rubin didn’t publicly advocate for Summers? (Well, of course not.) That he told only a few people? That he told no one except the mirror when he was brushing his teeth? It’s an odd formulation.

What it really suggests, I’m inclined to think, is that he spoke to the reporter on background. The quote certainly feels that way, as I haven’t heard a thing previously to suggest that Rubin was backing Summers for Treasury. If it came from someone else, it’d be likely to say just *how* Rubin was supporting Summers—to whom did he speak of his support? What did he do on Summers’ behalf?

But if it came from Rubin and Rubin provided no details, that would explain why the reporter didn’t include the tidbits that would flesh out the term “privately.”

Rubin hates to be quoted, but he doesn’t hate to talk to the Times.

And in return, it appears, the Times reporter goes easy on him: though that line about Rubin “facing questions” about Citigroup is one half of the article’s thesis paragraph, it proves to be the only mention of Citigroup and Rubin in the entire article.

But the Citigroup fiasco, and Bob Rubin’s $150 million role in it, aren’t likely to go away: As the government crafts a plan to bail out Citigroup, costing taxpayers more billions, surely someone will ask just why one man was paid so much money, and what role that money played in his steadfast support of disastrous former CEO Charles Prince?

Someone?

I’d forgotten what a great song this is until listening to it lately…. It’s the Fine Young Cannibals, of course. (How cool was that Roland Gift*?)

*Thanks, Beecham…

The Boston Globe makes the case: by posting online a video of a guy singing “Pour Some Sugar on Me” while driving home from work.

Globe, this is what 14-year-olds waste time on YouTube for. If newspapers are to survive, they must add value—not sink to the lowest common denominator.

After three and a half years of rebuilding his reputation, Larry Summers has officially recovered from his ouster as president of Harvard: Barack Obama will name him the president of the National Economic Council, coordinator of the White House’s economic policy.

Welcome to Lawrence Summers’ third act.

With his new White House post, Summers looks to be in a position of immense power. Obama has announced plans for a massive spending and jobs initiative, and Summers would presumably oversee that effort.

In the Democrats’ weekly radio address, Mr. Obama said he would direct his economic team to craft a two-year stimulus plan with the goal of saving or creating 2.5 million jobs. He said it would be “a plan big enough to meet the challenges we face.

…Mr. Summers, who served as a campaign adviser to Mr. Obama, has advocated for a forceful stimulus plan in recent newspaper columns, saying the federal government should be doing more, not less, in areas like health care, energy, education and tax relief. Mr. Obama seemed to echo those thoughts in his radio address.

It is a remarkable turn of events for Summers, who had fallen about as far as one could fall when in 2006 he resigned the position of Harvard president after just five years in the job. He has rebuilt his image by focusing on the area of his expertise, economics. Perhaps the most important element of Summers’ rehabilitation was the fact that Harvard alum Chrystia Freeland—no dummy, she—offered Summers a column in the Financial Times. Summers also appeared in friendly forums on television, helped start a thinktank, invested in an earnest (but, IMHO, longshot) website, and occasionally appeared at Harvard, though his $400,000-plus salary does not require it.

Summers also downplayed his connection with the hedge fund D.E. Shaw, which was a blatant attempt to cash in on the hedge fund frenzy—just, as it turned out, a little late in the game.

There’s a part of me that admires and congratulates Summers for his comeback. It’s a very American thing, a comeback, and I think one should always offer people the chance to recover from a fall. We don’t always like it—there are some people who should go away and never come back—but it is one of the great things about America. And the process can’t have been easy for Summers, who certainly does have a lot to offer in the economic realm. It’s impossible not to appreciate his work ethic.

At the same time, Summers is a complicated man, emotionally and psychologically, and one hopes he learns the right lesson from this. It would be unfortunate if he interpreted his restoration as a vindication of his style of governance at Harvard—the imperiousness, the arrogance, the boorish behavior. (Not terms that he would use, of course.)

Summers’ comeback is an affirmation of his many talents, but it is not a rejection of the many concerns that the Harvard faculty and administration had about him. If Summers can, on the deepest level, accept that those concerns were legitimate, and translate the lessons learned from such acceptance into personal and professional maturity, then he will be an outstanding public servant indeed.

The Harvard Law School reports that Barack Obama has appointed several HLS alums to various posts.

Cassandra Butts ’91, a close friend of Obama’s, will serve as general counsel, a job that will include vetting possible Obama appointees for ethical conflicts. She served as Obama’s domestic policy advisor on the campaign….

Michael Froman ’91 and Julius Genachowski ’91 were named to the transition team’s 12-member advisory board…

Some more Bob Rubin influence here, unfortunately: Formerly managing director at Citigroup, Froman was chief of staff to former Treasury Secretary Robert Rubin.

That Citigroup experience isn’t exactly encouraging, although Froman has other experience that seems more positive.

Genachowski has a pretty interesting resume—the kind of experience you just couldn’t imagine in a Republican administration. (His wife, Rachel Goslins, makes documentaries! Her next one is about Muslims who saved Jews during the Holocaust, which is very Obamian.)

And finally….

Former HLS professor Christopher Edley, Jr. ’78, who taught Obama during his student days, was also named to the advisory board…