Larry Summers in the Lead?
Posted on July 10th, 2013 in Uncategorized | 18 Comments »
Politico, the newspaper for inside-the-Beltway junkies, reports that Summers is now considered the leading candidate to replace Ben Bernanke as Federal Reserve chair—not Janet Yellen, as has been widely reported. Politico’s story is worth quoting at length.
….many top Democrats close to the Obama White House suggest the leading candidate to replace Bernanke is not necessarily current Fed Vice Chairwoman Janet Yellen — as many in the markets expect — but Larry Summers, the outspoken Harvard professor and former Clinton-era Treasury Secretary and senior Obama economic adviser.
…Obama knows Summers well, these people say, a very important factor in the current White House. Summers served as chairman of the White House National Economic Council during the administration’s first two years. And while they may not be best friends, Obama and Summers would also not be working together on a day-to-day basis, mitigating any possible personality conflicts.
Summers is said by those who know him to be in no way campaigning for the job, despite a recent flurry of stories about his potential nomination. His office said he was golfing with no access to a cellphone when POLITICO tried to reach him on Tuesday. People close to Summers say he has settled into his current teaching role at Harvard and is not especially eager to move back to Washington full time.
This last paragraph is so literally incredible—Summers has “settled into his current teaching” (which is what, exactly?)—that it suggests the opposite: Summers is campaigning for the job and is just trying hard (on the golf course with no cell phone? please) to appear as if he isn’t…
But others say that if Obama asks, Summers would certainly agree to serve…
This last bit of diction is a dead giveaway: The word “serve,” in Washington, is used when someone desperately wants a job for reasons of personal ambition but doesn’t want to look either desperate or ambitious, in which case they frame taking the job as a question of public “service” that would, of course, mean great sacrifice on their part but somehow they would manage to do it if the nation called…
18 Responses
7/10/2024 4:46 pm
Good close reading there RB, and yes, all quite obvious. It’s hard to believe this could be a good idea.
7/10/2024 5:55 pm
I don’t know… has Politico ever been known to know what it’s talking about? Seems like a sounding board for the laziest journalism.
7/10/2024 8:23 pm
Just like old times. Anonymous, you are right this is lazy.
http://harry-lewis.blogspot.com/2013/07/summers-to-fed.html
7/10/2024 8:55 pm
Yes, Harry, takes you back:
https://richardbradley.net/2006/03/larry-summers-and-times.html
7/10/2024 9:55 pm
Harry Lewis’s blog post on this subject should be required reading for everyone in Washington, not only the press.
But the post is incomplete. It understates the problem, of which the Shleifer affair is only one example. The fundamental problem is prevarication-in Lewis’s well chosen word. Many faculty were troubled by Summers’ comments at the meeting whether or not they cared about the Shleifer business because they saw it as part of pattern of prevarication. Several other prominent instances: he misled members of the Board of Overseers when asked about the “resignation” of Dean Kirby; misled faculty and a dean about his controversial decision to turn down a tenured appointment (saying that Drew Faust urged him to do so); and misled members of the Corp about the nature and extent of his outside activities. There were an number of other private and public instances, which in the end is why he lost of the support of the Corp, most of his own deans, and many faculty who otherwise supported what he wanted to do. Prevarication may not be a fatal flaw for most jobs in Washington, but surely the Fed job demands more, and mostly the chairs have given us more. Trust is essential. Whatever you may think of the policies and decisions of past chairs of the Fed-from Martin, Burns, Miller, Volcker, Greenspan and Bernacke-you would be hard pressed to find evidence of this kind of persistent prevarication. Many at Harvard learned not to trust his word, and unfortunately if he became Fed chair, many people more influential than we are would too-but too late to avoid the consequences.
7/10/2024 10:38 pm
For the Fed position I’m not sure prevarication is the worst quality. He would be hauled before Congress here and there, but could deal with those lesser beings easily enough, and would otherwise have no one to whom to prevaricate, no one to whom he was responsible.
The real problem would be his devastating intelligence, an intelligence of a dazzlingly anti-Socratic nature that is impressive in it’s assurance that he knows he is the smartest guy around, not because, like poor old Socrates, he knows the limitations of his intelligence.
This would mean that he, and nobody else, would know how to proceed, he, and nobody else, would know what needs doing, as with Gramm Leach Bliley, Brooksley Born slap-down, Allston debt financing, all that good stuff.
That’s what’s terrifying about this prospect.
7/11/2024 12:22 am
I for one would like to see in our Federal Reserve chairman some demonstration of financial judgment. Placing an unmatched interest rate swap against an amorphous plan to develop Allston with massive borrowings because he was certain about the direction of interest rates
was obviously foolish and reckless at the time of implementation. What kind of delusional hubris leads one to speculate in such size on interest rate movements. Finally, the financial scope of Larry Summer’s Allston was far beyond the financial capability of Harvard’s capital structure to support prudently. Dare to be great challenges made for rousing speeches but collapsed as a way to manage the finances of a University that we are all expecting to be around for a few more centuries. Intelligence without judgment is like a great racehorse without a jockey.
7/11/2024 6:28 am
LHS record as Harvard President is, to all who have privileged information about his decisions, a disastrous one.
HIs public record, in contrast, is outstanding. This is because LHS has cultivated people who take great pride in touting his ‘accomplishments’.
That so much knowledge of his true record at Harvard is still private knowledge speaks of the cowardice of those who know better. Perhaps a sign that LHS knew what he was doing when he bullied faculty and treated them like people without spine.
7/11/2024 6:43 am
Has any professor at Harvard raised at a faculty meeting the need of a financial audit of the Summers’ presidency? After all, given the concerns Sam Spektor has raised in this blog about the serious potential financial predicaments of Harvard it might be vital and of the essence for the University to learn all it can about its recent record of financial management. Perhaps, under close scrutiny of the way in which the massive budget that LHS brought to the office of the President, or of the role he played in the HMC, or of his role influencing deans in their own financial management, or of his role in the debt the university raised for Allston, valuable lessons would be learned for the long term financial viability of the University.
There are many professors who whine about how they were disempowered from any role in governance by Summers and his accomplices in the administration… perhaps they should step up and demonstrate that they can indeed govern and take charge for repairing the institutional wounds of the Summers presidency.
But that would take effort, and moral courage… it’s not just editorialists in politico or the NY Times who are lazy… and it’s not just undergraduates who lack a moral compass.
The Harvard faculty had, in Summers, the President it deserved.
7/11/2024 10:25 am
Settle down, everybody… do you really think I would appoint someone like Larry S to the Fed?
7/11/2024 12:00 pm
Of course journalists, and many members of the general public, like to think that LHS’s remarks about women in 2005 were the cause of his downfall. I wish we could have been more assertive in explaining the importance of the Shleifer affair as it was brought into the open two years later. Fred Abernathy’s exchange at the February FAS meeting, 2007, was the true straw that broke the camel’s back. Yet whenever I mention that case, people simply dismiss it. Thus, I’m more than fascinated by David Warsh’s comment about the sequence of events that led to LHS’s resignation that year:
“After its mission to advise the Russian government on behalf of the US State department collapsed in 1997 amid a welter of conflict of interest charges, Harvard closed its Institute for International Development. After losing a long court battle, and partly as a consequence of it, the university relieved Lawrence Summers of his presidency (but made him a university professor) and revoked economics professor Andrei Shleifer’s endowed chair.” (see Harry Lewis’s blog post, mentioned in his comment above, for more information)
The Shleifer case is less easy to package into a journalistic sound bite, but his wrongdoing in Russia is clear. Have spent a substantial sum to settle the government’s case against him; Shleifer himself paid a pittance and is still a professor at Harvard.
We need to refer to the Shleifer case more often and more loudly.
7/11/2024 12:02 pm
Sorry about the syntax in the second-last sentence of my comment: I meant that Harvard spent a substantial sum to settler the case against Shleifer.
7/11/2024 12:03 pm
Sorry about the syntax in the second-last sentence of my comment: I meant that Harvard spent a substantial sum to settle the case against Shleifer.
7/11/2024 12:05 pm
In the my second-last sentence above, “Have” should read “Harvard.” Sorry,.
7/12/2023 5:19 am
Argh. Please excuse the repetition.
7/12/2023 7:38 am
We should remember that another case of Summers’ lying to the Faculty also came out in February 2006. The previous fall, in replying to a question of Richard Thomas, he said there were no plans to take the exclusive right to grant Ph.D.’s away from the FAS, and that the notion had not even been discussed. In February 2006 Peter Ellison revealed that in fact there had been such discussions and even a tentative plan to give such rights to the provost’s office.
Of course this issue would have no traction with the outside world, so the counter-story to that which focuses on the NBER remarks should emphasize the Shleifer affair and financial mismanagement.
10/17/2013 3:46 pm
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