Another Summers critic..

  It surely should concern any Obama supporter that he chose this creep to be his chief economic advisor. It also shows the nature of Harvard that he was once þ¶esident of that institution!


New York TIMES / April 12, 2009
Op-Ed Columnist
Awake and Sing!
By FRANK RICH

... On the same Friday that the Labor Department reported the latest
jobless numbers, the White House released (in the evening, after the
network news) some other telling figures on the financial disclosure
forms of its top officials. From those we learned more about how much
the bubble’s culture permeated this administration.

We discovered, for instance, that Lawrence Summers, the president’s
chief economic adviser, made $5.2 million in 2008 from a hedge fund,
D. E. Shaw, for a one-day-a-week job. He also earned $2.7 million in
speaking fees from the likes of Citigroup and Goldman Sachs. Those
institutions are not merely the beneficiaries of taxpayers’ bailouts
since the crash. They also benefited during the boom from government
favors: the Wall Street deregulation that both Summers and Robert
Rubin, his mentor and predecessor as Treasury secretary, championed in
the Clinton administration. This dynamic duo’s innovative gift to
their country was banks “too big to fail.”

Some spoilsports raise the conflict-of-interest question about
Summers: Can he be a fair broker of the bailout when he so recently
received lavish compensation from some of its present and, no doubt,
future players? This question can be answered only when every
transaction in the new “public-private investment plan” to buy the
banks’ toxic assets is made transparent. We need verification that
this deal is not, as the economist Joseph Stiglitz has warned, a Rube
Goldberg contraption contrived to facilitate “huge transfers of wealth
to the financial markets” from taxpayers.

But perhaps I’ve become numb to the perennial and bipartisan
revolving-door incestuousness of Washington and Wall Street. I was
less shocked by the White House’s disclosure of Summers’s recent
paydays than by a bit of reporting that appeared deep down in the
Times follow-up article on that initial news. The reporter Louise
Story wrote that Summers had done consulting work for another hedge
fund, Taconic Capital Advisors, from 2004 to 2006, while still
president of Harvard.

That the highly paid leader of arguably America’s most esteemed
educational institution (disclosure: I went there) would
simultaneously freelance as a hedge-fund guy might stand as a symbol
for the values of our time. At the start of his stormy and short-lived
presidency, Summers picked a fight with Cornel West for allegedly
neglecting his professorial duties by taking on such extracurricular
tasks as cutting a spoken-word CD. Yet Summers saw no conflict with
moonlighting in the money racket while running the entire university.
The students didn’t even get a CD for his efforts — and Harvard’s
deflated endowment, now in a daunting liquidity crisis, didn’t exactly
benefit either.

Summers’s dual portfolio in Cambridge has already led to one potential
intermingling of private business and public policy in his new White
House post. He tried — and, mercifully, failed — to install the
co-founder of Taconic in the job of running the TARP bailouts. But
again, Summers’s potential conflicts of interest seem less telling
than the conflict of values that his Harvard double-résumé
exemplifies.

In the bubble decade, making money as an end in itself boomed as a
calling among students at elite universities like Harvard, siphoning
off gifted undergraduates who might otherwise have been scientists,
teachers, doctors, entrepreneurs, artists or inventors. The Harvard
Crimson reported that in the class of 2007, 58 percent of the men and
43 percent of the women entering the work force took jobs in the
finance and consulting industries. The figures were similar
everywhere, from Duke to the University of Pennsylvania. Dan Rather,
on his HDNet television program in December, reported that at Penn
this was even true of “over half the students who graduated with
engineering degrees — not a field commonly associated with Wall
Street.”

Clearly the last person to serve as an inspiring role model for
alternative values would have been Summers. But in her first
baccalaureate address last June, his successor as Harvard president,
Drew Gilpin Faust, stepped into that moral vacuum, zeroing in on the
huge number of students heading into finance, consulting and
investment banking. “Find work you love,” she implored the class of
2008. The “most remunerative” job choice “may not be the most
meaningful and the most satisfying.”

... No one is better placed or more philosophically suited than Obama
to construct the new counternarrative as we go forward in our new New
Deal. But many masters of the old universe, including quite possibly
his chief economic adviser, can’t recognize that the world has changed
or should change. Even at the cratered Citigroup, a technical analyst
was moved to write a report last month urging his peers to stop living
in “denial” and recognize that we are witnessing the end of “25 to 30
years worth of excess.” The “new normal” in lifestyle, wealth creation
and profitability of companies, he wrote, “may be a shadow of the
past.”

There was a poignant quality to this Citi report, which cited as its
mantra the R.E.M. song “It’s the End of the World as We Know It (and I
Feel Fine).” Its tone somehow reminded me of the stirring speech
written by the American playwright Clifford Odets in his classic drama
of the Great Depression, “Awake and Sing!” (1935). “Boychick, wake
up!” the grandfather Jacob tells his grandson, Ralph, as the battered
Berger family disintegrates in the Bronx. “Be something! Make your
life something good ... Go out and fight so life shouldn’t be printed
on dollar bills.”

When Lawrence Summers was president of Harvard, he famously delighted
students by signing his autograph on dollar bills that already bore
his signature from his Treasury secretary days. How we leave that
bankrupt culture behind and get to “something good” will be as much a
factor in our recovery from this Depression as the fate of the
unemployment rate and the Dow.<

--