Summers, Larry

ASKED EPSTEIN HOW TO BED MENTEE

fired by harvard (no conf vote)?

repeal glass-steagall, would not reg derivatives, pal of kenny boy lay enron and whittled down obama stimulus?

DEREG

CITI? RUBIN

GRAMM

HAYEK

EPSTEIN THIEL DIALOG

KEN LAY

---

AM PROSP 7 26

C STUDENTS WHO CHEAT AT TENNIS; CITIGROUP ---- ACT

try to explore via my own life odyssey is how could we

5:47

have had such a good deal for most working people and then how did we lose

5:53

it? What what did the Democratic Party do wrong? Beginning with um Carter and

6:00

Clinton and then Obama and the influence of the corporate Democrats, the Wall Street Democrats, Robert Rubin, and

6:07

really screwing it up and getting in bed with with Wall Street

6:12

um to the point where [clears throat] working families no longer saw the Democratic Party as their champion. And

6:19

that began the road to Trump. Uh what happened? How do we get that back? And

6:25

that's a lot of what I talk about and I'll I'll get to Senator Proxmire and the banking committee in a moment if you like....

44

know we had a 30-year uh Democratic majority in the house. Um we in the 50s

7:52

and 60s we had a 90% top tax uh rate for people making over approximately

7:58

$470,000 at that time maybe close to $3 million today. what how did it how did

8:04

we lose sight as a country of what was working because that was I mean

8:10

obviously we needed to emancipate women we needed to emancipate black people we needed to um uh uh move in uh you know

8:17

in terms of the social emancipation but how did we get how did we lose in that process

8:24

uh providing materially for our our our people so that's a lot of what the book talks

8:29

about and I I I was involved in this both as protagonist and as a journalist. So it's a tragedy in three acts, right?

8:36

So act one is Johnson and the war. So Johnson has a majority almost as big as

8:42

FDRs. And if you go back to 1964, Johnson wins in a landslide. uh he has

8:49

almost 2 to1 majorities in Congress and he is poised to launch the unfinished

8:55

business of the New Deal and the attempt

9:00

to extend American democracy to black people would have been a heavy lift in

9:06

any case. But he sets out on that road very heroically and then of course he

9:11

blows it all on Vietnam. And the tragedy of Vietnam is not just that it

9:18

distracted attention from the unfinished business of the New Deal, uh, but that it split the Democratic coalition both

9:26

politically and culturally, the hippies and the hard hats and, uh, lets Nixon

9:31

become president. And the Democratic coalition in a sense never really recovers from that catastrophe. So

9:38

that's that's act one of the tragedy. Then a miracle of miracles, Nixon blows

9:46

it all on Watergate. And um one of the things I did in my

9:51

journalistic life, I was part of the Watergate team at the Washington Post. I had a front row seat for that. And um

9:59

and miracle of miracles, not only does uh Nixon

10:05

get impeached and is forced to leave office, but uh 1976 we elect a

10:11

Democratic president. And Jimmy Carter, thanks to the Watergate Congress, has a

10:17

very big working majority. Oh boy, here we get a doover. When when does history ever give you a doover? But Carter turns

10:23

out to be the most conservative Democrat since Grover Cleveland. He's sort of a process liberal despite having a big

10:30

majority in Congress. Name any kind of landmark legislation you can credit to Jimmy Carter. Zip zero. Um labor law

10:39

reform. Nope. Not interested. U any of the any of the important pieces of

10:45

unfinished business that he might have enacted. That's not who he is. So you have another failed presidency and worse

10:54

uh Carter begins to turn to neoliberalism. He decides, hey, we need deregulation. We need privatization. Uh

11:01

we need supply side economics. The the first supply side bills, tax cuts for

11:07

the rich, are not passed under Reagan. They're passed under Jimmy Carter. So,

11:12

and then that begins a succession of neoliberal presidents of whom the worst

11:19

was was um Bill Clinton. And you know, Clinton, Clinton hires Bob Rubin and

11:26

Larry Summers. He hires Wall Street to run the economy by and for Wall Street.

11:33

He buys into the ideology of budget balance. And um even worse when after a

11:40

few years it all blows up in 2008 and Barack Obama who really hadn't quite

....

:47

expected to be the nominee realizes, "Oh my god, I'm going to be the nominee." And I wrote a book about this, the only

11:54

book I I ever wrote that ended up on the bestseller list called Obama's Challenge. And it's June of 2008. He's

12:02

got two people working for him, two and a half people. his entire economic team,

12:08

one of whom is a really good guy named Dan Terillo, a progressive. And um Obama

12:15

gives a speech at Cooper Union that March or April talking about all the things that are wrong with Wall Street

12:21

that need to be cleaned up. The speech is drafted by Terillo. And then in June

12:26

when he realizes uh that he's going to be the nominee, all the financial heavy

12:31

hitters in the party go to Obama and they say, "Hey, look, you got to bring in the A team." Well, who's the A team?

12:37

Well, the A team is Bob Rubin's proteges and Larry Summers and Rahm Emanuel and

all of the people who bought the financial deregulation brought the financial deregulation that caused the

12:49

collapse of 2008. He brings them in to fix it. Um Summer's advice is uh we

12:56

don't need a big stimulus to deficit reduction. So the recession

13:03

drags on and on and on and that leads to directly uh to Trump. So you have three

13:10

Democrats who gratuitously embrace neoliberalism because that's where the big money is. I

13:16

mean Rubin starts out as a fundraiser. He ends up becoming an adviser. He ends up being an ideologue. And of course he

13:22

comes from Wall Street. He goes back to Wall Street. When they when they repeal the GlassSteagall Act so that you can

13:28

have an investment bank um merge with uh a commercial bank known in some circles

13:34

as the Cityroup Enabling Act. He becomes a top executive of Cityroup. So the whole thing is corrupt. It's a wasted

13:41

opportunity. Obama is a a magnificent human being. He's a person without a

13:48

whiff of scandal attached to him. He's eloquent, but he bungles like Johnson

...

context

an 11 25

George Bush speechwriter and podcaster Tim Miller says MAGA Media “is in shambles as they're trying to circle the wagons around President Donald Trump following the … Epstein revelations.”

“You know, these folks are just grasping for anything to try to defend Trump when even in the most generous interpretation of events, he had wildly inappropriate relationship with the country's most notorious child sex trafficker, was around young women and girls — apparently, according to one of the emails — that [Epstein] was sexually abusing and trafficking, and that when he got a chance to reveal and publicize the other people who were complicit in this, he decided to cover it up,” said Miller.

Miller referenced a recent “News Nation” interview between Megyn Kelly and guest Batya Ungar-Sargon where she downplayed the allegations against Epstein.

“We have not seen some slew of young women come forward to say ‘me too’ on Donald Trump molesting them or having paid for sex with them when they were barely legal or otherwise. It just hasn't happened,” Kelly told Ungar-Sargon in replayed footage.

But Miller dismantled this argument, pointing out that he himself had interviewed Epstein victim Stacey Williams who claimed to have been groped by Trump.

“Being led into Donald's office to be groped by him was bad enough, and I probably was young enough and confused enough where maybe I was still questioning [what was happening],” Williams said. Miller included a link to that interview.

“Where have you been, Megyn Kelly? There were at least 28 women have accused Donald Trump of various acts of sexual misconduct, including rape, kissing and groping without consent. ‘You can do anything. Whatever you want. Grab ‘em by the p——,' looking under women's skirts, and yes, walking in on naked teenage pageant contestants,” Miller said.

Ungar-Sargon didn’t push back, on Kelly's claim, but instead pushed the argument that Epstein pushed his victims onto Trump and friend.

“[A] lawyer for a group of the women actually said Jeffrey Epstein would prey upon women when they were underage, … and then the lawyer said when they came of age and he was no longer interested in them, he would then pass them on,” Ungar-Sargon told Kelly.

“Sure,” said Miller. “… [W]hat was happening with these young girls was that Jeffrey Epstein was abusing them and molesting them. And then when they became 18, he would pass them off to his friends. And these sex-trafficked and groomed girls would give ... sexual massages to creepy old men who were friends with a sex trafficker. That's the spin now. That's where they're at. That's where MAGA world is. Here's our pretty picture that we'll paint on this.”

But Miller rolled out photos of Epstein victims Tila Davis and Jenna Lisa Jones, as well as Michelle Licata, (age 16) and Jennifer Araz.

“Araz was recruited at 14, assaulted at 15, and she looks like a baby,” said Miller, who then showed a photo of victim Courtney Wilde.

“If you're sitting across from them on this plane and then somebody looked over to you and was like, ‘he's … having sex with her,’ nobody would look at that and say, ‘well, it seems passably illegal.’ You would call the authorities immediately," Miller said.

“It's like looking at a Maxim magazine,” Miller said, referencing a photo collage of victims. “It's just sick. This is what Donald Trump has done to these people. He's made them sick in the brain. They can no longer have enough clarity … to be able to say, ‘you know what? I don't need to debase myself like this for this mushroom d——, f—— piece of s—— in the White House.’”

“We don't know exactly what Donald Trump's role was, but the fact that Donald Trump has been accused of sexual assault many, many times is on the public record,” said Miller. “The fact that he bragged about it is on the public record. The fact that he's trying to cover this up is something we all know. Who would want to cover up what happened to these girls?”

---

pbs

by the time Jeffrey Epstein pleaded guilty in 2008 to soliciting prostitution from an underage girl, he had established an enormous network of wealthy and influential friends. Emails made public this week show the crime did little to diminish the desire of that network to stay connected to the financier.

Thousands of documents released by the House Oversight Committee on Wednesday offer a new glimpse into what Epstein’s relationships with business executives, reporters, academics and political players looked like over a decade.

READ MORE:** Read Jeffrey Epstein’s newly released emails about Trump

They start with messages he sent and received around the time he finished serving his Florida sentence in 2009 and continue until the months before his arrest on federal sex trafficking charges in 2019.

During that time, Epstein’s network was eclectic, spanning the globe and political affiliations: from the liberal academic Noam Chomsky to Steve Bannon, the longtime ally of President Donald Trump.

Some reached out to support Epstein amid lawsuits and prosecutions, others sought introductions or advice on everything from dating to oil prices. One consulted him on how to respond to accusations of sexual harassment.

Epstein was charged with sex trafficking in 2019, and killed himself in jail a month later. Epstein’s crimes, high-profile connections and jailhouse suicide have made the case a magnet for conspiracy theorists and online sleuths seeking proof of a cover-up.

The emails do not implicate his contacts in those alleged crimes. They instead paint a picture of Epstein’s influence and connections over the years he was a registered sex offender.

Epstein kept a diverse political network

Epstein emailed current and former political figures on all sides, sending news clips and discussing strategy or gossip often in short, choppy emails laden with spelling and grammatical errors.

In several emails in 2018, Epstein advised Bannon on his political tour of Europe that year. Bannon first forwarded Epstein a news clip that described the German media as “underestimating” Bannon and that he was “As Dangerous as Ever.”

“luv it,” Epstein responded.

Epstein wrote that he’d just spoken to “one of the country leaders that we discussed” and that “we should lay out a strategy plan. . how much fun.”

Several months later, Epstein sent some advice: “If you are going to play here , you’ll have to spend time, europe by remote doesn’t work.”

“its doable but time consuming,” Epstein continued in a follow-up email, “there are many leaders of countries we can organize for you to have one on ones.”

Just a few months earlier, Epstein was insulting Trump — whose movement Bannon was a representative of — in emails to Kathryn Ruemmler, the former White House counsel under President Barack Obama.

Ruemmler sent a message to Epstein calling Trump “so gross.” A portion of that message was redacted, but Epstein replied, “worse in real life and upclose.”

In other emails with Ruemmler, Epstein detailed a whirlwind of well-known people he appears to have been meeting, hosting or speaking with that week, including an ambassador, a tech giant, foreign business people, academics and a film director.

“you are a welcome guest at any,” he wrote.

Jennifer Zuccarelli, a spokesperson for Goldman Sachs, where Ruemmler now works, declined to comment.

Epstein’s wealthy social circles

The financier emailed often with people in the upper echelons of wealth around the world, brokering introductions and chatting about politics and foreign affairs.

That included Silicon Valley investor Peter Thiel, who Epstein sent an email to in 2014 saying “that was fun , see you in 3 weeks.”

Four years later, Epstein asked if Thiel was enjoying Los Angeles, and, after Thiel said he couldn’t complain, replied “Dec visit me Caribbean.” It’s unclear if Thiel ever responded.

In emails with Sultan Ahmed bin Sulayem, an Emirati businessman, Epstein complimented Bannon, saying in 2018 that “We have become friends you will like him.”

“Trump doesn’t like him,” responded Sulayem.

A year earlier, Sulayem asked Epstein about an event where it appeared Trump would be in attendance, asking, “Do you think it will be possible to shake hand with trump.”

“Call to discuss,” Epstein wrote back.

In January 2010, biotech venture capitalist Boris Nikolic was attending the annual World Economic Forum in Davos, Switzerland, and Epstein emailed to ask, “any fun?”

Nikolic replied that he had met “your friend” Bill Clinton, as well as then-French President Nicholas Sarkozy and “your other friend,” Prince Andrew, “as he has some questions re microsoft.”

But then Nikolic said he was getting sick of meetings. Later, he wrote Epstein that “it would be blast that you are here.” He mentioned flirting with a 22-year-old woman.

“It turns out she is with her husand. Did not have chance to check him out. But as we concluded, anything good is rented ;)” Nikolic wrote.

Epstein kept in touch with academics

The theoretical physicist and cosmologist Laurence Krauss was among them. In 2017, Krauss reached out to Epstein via email for advice on responding to a reporter writing a story about allegations of sexual harassment against him.

“Is this a reasonable response? Should i even respond? Could use advice,” Krauss asked Epstein.

In an explicit exchange, Epstein asked Krauss if he’d had sex with the person in question and then suggested he should not reply to the journalist.

“No. We didn’t have sex. Decided it wasn’t a good idea,” replied Krauss.

Krauss said in an email to The Associated Press that he never hid the fact that he knew Epstein, and interacted with him several times.

“I sought out advice from essentially everyone I knew when false allegations about me were circulated in the press in 2018,” said Krauss. “I was as shocked as the rest of the world when he was arrested” in 2019.

In an August 2015 email exchange, Epstein told Chomsky, the famed linguist and social scientist, to only fly to Greece if he feels well, joking he previously had to send a plane for another “lefty friend” to see a doctor in New York.

In the same exchange, which dipped into academic arguments about warning signs on currency collapses, behavioral science models, and Big Data, Epstein offered his residences for Chomsky’s use.

“you are of course welcome to use apt in new york with your new leisure time, or visit new Mexico again,” Epstein wrote.

The emails also show that Epstein kept up a friendly relationship with Larry Summers, who was the treasury secretary under President Bill Clinton and former Harvard University president, and bantered about the 2016 presidential race and Trump.

Other emails showed a closer relationship. In 2019, Summers was discussing interactions he had with a woman, writing to Epstein that “I said what are you up to. She said ‘I’m busy’. I said awfully coy u are.”

Epstein replied, “you reacted well.. annoyed shows caring. , no whining showed strentgh.”

Summers issued a statement saying he has “great regrets in my life.”

“As I have said before, my association with Jeffrey Epstein was a major error of judgement,” the statement said.

Chomsky, Thiel, Bannon, and Sultan Ahmed bin Sulayem did not immediately respond to requests for comment, which were sent through email addresses available on their own or their organizations’ websites.

*Associated Press reporters John Hanna in Topeka, Kansas, and Claudia Lauer in...

---

an 11 25 badash

President Donald Trump is intensifying his efforts to thwart attempts to force the release of the Epstein files, even as the House moves toward a vote that could send disclosure legislation to his desk for his signature — or veto — further heightening scrutiny of his past ties to the late sex offender Jeffrey Epstein.

On Friday, the president announced he will ask the U.S. Department of Justice, Attorney General Pam Bondi, and the Federal Bureau of Investigation “to investigate Jeffrey Epstein’s involvement and relationship with Bill Clinton, Larry Summers, Reid Hoffman, J.P. Morgan, Chase, and many other people and institutions, to determine what was going on with them, and him.”

The New York Times reported that the “inquiry appeared to be retribution for the renewed focus on his own ties to Mr. Epstein.”

After White House officials reportedly held a Situation Room meeting with Republican Congresswoman Lauren Boebert on Wednesday to convince her — unsuccessfully — to remove her name from the discharge petition, the president on Friday took a different tack, appearing both to try to wash his hands of the entire ordeal while refocusing attention on his political opponents and others.

“Epstein was a Democrat, and he is the Democrat’s problem, not the Republican’s problem!” Trump railed on his Truth Social website, while attacking Democrats.

“The Democrats are doing everything in their withering power to push the Epstein Hoax again, despite the DOJ releasing 50,000 pages of documents, in order to deflect from all of their bad policies and losses, especially the SHUTDOWN EMBARRASSMENT, where their party is in total disarray, and has no idea what to do,” Trump alleged.

“Some Weak Republicans have fallen into their clutches because they are soft and foolish,” the president continued. “Epstein was a Democrat, and he is the Democrat’s problem, not the Republican’s problem!”

“Ask Bill Clinton, Reid Hoffman, and Larry Summers about Epstein, they know all about him, don’t waste your time with Trump. I have a Country to run!”

Deadline on Friday noted that “Since the email release, Trump has avoided answering reporters’ questions about Epstein.”

Pointing to Trump’s Friday remarks, Politico’s Kyle Cheney remarked, “Trump again pleads with Republicans to stop talking about Epstein. The pressure hasn’t worked as well as it usually does. Also, the emails show Epstein was politically amorphous, deriding Ds just as much as Rs. And these latest emails were from the Epstein estate, not DOJ.”

Attorney Aaron Parnas added, “I guarantee you if Donald Trump truly believed Epstein was the ‘Democrat’s problem,’ he would have released all of the files by now.”

---

ggl 11 25

[### Epstein Bantered Regularly With Larry Summers

The New York Times

https://www.nytimes.com › U.S. › Politics](https://www.nytimes.com/2025/11/12/us/politics/epstein-larry-summers.html)

1 day ago — He was the president of Harvard University from 2001 to 2006. In November 2018, Mr. Summers forwarded Mr. Epstein an email from a woman whom the ...

[### Lawrence H. Summers

Center for American Progress

https://www.americanprogress.org › people › summers-...](https://www.americanprogress.org/people/summers-lawrence/)

Currently, Summers is the Charles W. Eliot University Professor and president emeritus at Harvard University and the Weil Director of the Mossavar-Rahmani ...

[### Email Cache Reveals How Former Harvard President Larry ...

The Harvard Crimson

https://www.thecrimson.com › summers-epstein-messages](https://www.thecrimson.com/article/2025/11/13/summers-epstein-messages/)

1 day ago — Former Harvard President Lawrence H. Summers maintained a close personal relationship with convicted sex criminal Jeffrey E. Epstein until just ...

https://www.alternet.org/2022/01/larry-summers/

fOX News is exultant! Not only have they found a new Senate hero in Joe Manchin—a Democrat no less—but also in one of the Democratic party’s past policy stalwarts, Harvard Professor Larry Summers. In addition to having briefly served as President of that supposed bastion of American liberal thought, Summers has served as Secretary of The Treasury under President Clinton, and as the Chief Economist of the World Bank, which, for Trump world, is an instrument for strengthening big government globally and, God forbid, multilateralism!

What has propelled Summers so prominently into today’s Fox News/Trumpist spotlight, however, has been his persistent criticism of the Biden administration’s economic policy agenda, beginning with theAmerican Rescue Plan of 2021—which probably saved millions of American families from sinking into abject poverty during the past 20 months of pandemic. In an interview on Bloomberg in March of last year, Summers described it as “…the least responsible macroeconomic policy we’ve had in the last 40 years…”

Until recently, Summers was also critical of the proposed Build Back Better (BBB) program. I say recently, because like the policy chameleon he admits to being (“when circumstances change, I change my opinion…”), in a recent CNN interview with Fareed Zakaria, he expressed support for the program, acknowledging that because it is “investment,” it is essential for long term growth and will not necessarily prove inflationary; a risk that he had been trumpeting loudly along with the Maserati-driving Manchin and others in the Fox News orbit. Indeed, as far back as 2014 in a seminal paper published by the Center for Economic policy Research (CEPR), Summers was warning of the dangers of “secular stagnation” triggered by the Federal Reserve’s low-interest rates and limited monetary instruments for addressing stagnant growth and rising prices.

While his debates with Nobel Laureates Paul Krugman and Joseph Stiglitz, as well as former Federal Reserve economist Claudia Sahm, over whether and how long inflation is “transitional” may ultimately prove vital in determining how Congress acts in relation to President Biden’s BBB plan, what is significant for now is the damage that his comments may have already done to the Biden agenda, to the Democratic party’s Congressional prospects in 2022, and to President Biden’s re-election prospects in 2024.

_{RELATED:}_**_{**Economists thoroughly debunk Joe Manchin’s fear that Build Back Better is a recipe for rapid inflation**}_]

But then controversial statements, erroneous policy prescriptions and abrupt reversals have been a consistent hallmark of Larry Summers’ career. They have also, however, contributed to keeping him ever-present in the public policy spotlight—Nobel Prize or not.

As the World Bank’s Chief Economist from 1991-93 he signed a draft policy memorandum that in February 1992 had been publicly leaked and reproduced in the New York Times. The memo, on its face endorsed the view that dumping toxic waste from developed countries into poor African countries made good economic sense. In addition to embarrassing the Bank and angering many of its staff and African shareholders, his giving priority to the impact of such actions on economic growth over its health and environmental consequences contributed to his relatively brief two-year tenure as Chief Economist.

In 1996, as Deputy Secretary of the U.S. Treasury, Summers was one of the leading architects of the effort—led by Harvard’s Institute for International Development—to administer shock therapy (a Milton Friedman inspired package of neo-liberal policies intellectually driven from the University of Chicago) to a former Soviet economy transitioning from Communist central planning to market mechanisms. This was a policy mix of rapid privatization, stabilization, and comprehensive liberalization that led to the stripping of state-owned assets by former senior party and KGB officials, many of whom have become the oligarchs of today.As highlighted in a United Nations Human Development Report issued early in the millennium, this contributed to creating in Russia, one of the world’s most unequal economies, while entrenching Vladimir Putin in his current leadership position and transforming him into one of the world’s richest men.

While still at the Treasury, during the Asian financial crisis, Summers in collaboration with the IMF, in 1997 advised the Korean authorities—then in the throes of deep recession—to raise interest rates and impose severe austerity on public expenditure and social support. According to Joseph Stiglitz, then the Chief Economist at the World Bank, and prominent Korean economists, these policies contributed to serious structural inequality and a distorted growth pattern that took almost a decade to correct.

RELATED: Why the modern economy is to blame for inflation — not government benefits

During this same tenure at Treasury, along with then Secretary Robert Rubin, Summers (along with Rubin a former Wall Street executive) was one of the leading advocates for the deregulation of financial services in the US, including President Clinton’s 1999 partial repeal of the Glass-Steagall Act. Today, it is widely acknowledged—including by former President Clinton himself, who in a 2010 television interview admitted the policy advice had been wrong—that repealing Glass-Steagall had contributed to the sub-prime mortgage crash of 2007-8.

Summers’ aversion to government regulation has also extended to the environment where, as a member of both the Clinton and Obama administrations, he opposed American leadership in strengthening green-house gas and fossil fuel regulations as well as endorsement of theKyoto protocol of 1997. As one of his colleagues on the Obama transition team, Reed Hundt wrote in his book *A Crisis Wasted*, Summers “…effectively rejected a grand strategy of investing enough in clean power to replace carbon power.” Indeed, until his relatively recent 2015 call for a carbon tax, his support for policies driven by climate science had consistently been subordinated to his calls for deregulation of the fossil fuel sector.

Perhaps none of his previous errors in judgement, however, have been as egregious as a 2005 seminar in which, as President of Harvard, he laid out the hypothesis that the under representation of women in science and mathematics was due primarily to “…the different availability of aptitude at the higher end…,” and less to patterns of socialization and gender discrimination. Despite a subsequent apology in which he sought to distance himself from his own remarks, not long afterwards in early 2006, he was pressured by the Harvard faculty into resigning as President.

Which brings one back to his being recently and frequently cited by Fox News and the Trump world policy pundits. The fact that at virtually every stage in his career he has often been wrong in judgement and key policy prescriptions, means little to Fox and the Trump policy team. To them, the important point is that, like Joe Manchin, he is identified as a Democrat, with intellectual heft, whose views can do serious damage to the Biden policy agenda, a damage that would have global consequences, though especially amongst liberal democracies.

READ: Economist Paul Krugman explains why so many Americans are 'very down on' a booming economy

The failure to adopt the policy mechanisms of a more regulated, equitable and sustainable economic growth (a growth pattern generally opposed by Fox, today’s Republican party and apparently Larry Summers) risks not only undermining US economic leadership and the resilience of democracy in the face of threats from illiberalism and autocracy, but also opening the door to a Republican congressional majority and re-election of a Trumpist Republican to the White House.

tisch maine timeline:

2017 (June)

President Trump announces that the United States will withdraw from the Paris Climate

Agreement

Stephen Bannon and the anti-globalist, climate denying contingent of White House advisors

trump the personal entreaties of Al Gore, Leonardo DiCaprio, Pope Francis, Ivanka Trump, Rex

Tillerson, European Union heads of state and many others. Oblivious to the fact that the

emissions standards under the Agreement are voluntary, subject to revision, and entail no

penalties for noncompliance, the President calls the deal “draconian,” imposing unfair standards

on American companies and employees. “At what point does America get demeaned? At what

point do they start laughing at us as a country?” Trump says. “We don’t want other leaders and

other countries laughing at us anymore. And they won’t be.”

The New York Times observes that

“Mr. Trump’s decision to abandon the agreement for environmental action signed by 195 nations

is a remarkable rebuke to heads of state, climate activists, corporate executives and members of

the president’s own staff, who all failed to change his mind with an intense, last-minute lobbying

blitz. The Paris agreement was intended to bind the world community into battling rising

temperatures in concert, and the departure of the Earth’s second-largest polluter is a major

blow,”* and its editorial board calls the withdrawal “disgraceful.”** Wall Street Journal

headlines declare: “U.S. Climate Pivot Puts a Reluctant China in Driver’s Seat: Trump’s

withdrawal from Paris accord gives China a new opening to exert sway on a big global issue” ***

Some find a May 30 op/ed in the Wall Street Journal by presidential advisors H. R. McMaster

and Gary Cohn as illuminating on the withdrawal decision in: “The president embarked on his

first foreign trip with a cleareyed outlook that theworld is not a ‘global community’ but an arena

where nations, nongovernmental actors and businesses engage and compete for advantage.”

:{

}:

Writes David Brooks in The New York Times: “That sentence is the epitome of the Trump project.

It asserts that selfishness is the sole driver of human affairs.”**** Al Gore’s statement on the

withdrawal declares that “Removing the United States from the Paris Agreement is a reckless and

indefensible action. It undermines America’s standing in the world and threatens to damage

humanity’s ability to solve the climate crisis in time. But make no mistake: if President Trump

won’t lead, the American people will. Civic leaders, mayors, governors, CEOs, investors and the

majority of the business community will take up this challenge. We are in the middle of a clean

energy revolution that no single person or group can stop. President Trump’s decision is

profoundly in conflict with what the majority of Americans want from our president; but no

matter what he does, we will ensure that our inevitable transition to a clean energy economy

continues.”*****

Former Treasury Secretary Lawrence Summers states that “We may have our

first post-rational president,” and that “It is possible that last week will be remembered as a

hinge in history — a moment when the United States and the world started moving on a

path away from the peace, prosperity and stability that have defined the past 75

years.”****** The Yale Program on Climate Change Communication reports that US voters favor

staying in the Paris Agreement by a margin of 5 to 1, and that half of Trump voters support staying

in, with fewer than 3 in 10 saying we should not stay in.******* The formal process of

withdrawal will likely take four years, and not be final until after the 2020 presidential election.

[see 2015 (December)]

*Michael Shear, “Trump Will Withdraw U.S. From Paris Climate Agreement,” New York Times, June 1, 2017,

https://www.nytimes.com/2017/06/01/climate/trump-paris-climate-agreement.html

**Editorial Board, “Our Disgraceful Exit From the Paris Accord,” New York Times, June 1, 2017,

https://www.nytimes.com/2017/06/01/opinion/trump-paris-climate-change-agreement.html

***Brian Spegele and Te-Ping Chen, “U.S. Climate Pivot Puts a Reluctant China in Driver’s Seat,” Wall Street Journal, June 2, 2017,

https://www.wsj.com/articles/u-s-climate-pivot-puts-a-reluctant-china-in-drivers-seat-1496380249

****David Brooks, “Donald Trump Poisons the World,” New York Times, June 2, 2017,

https://www.nytimes.com/2017/06/02/opinion/donald-trump-poisons-the-world.html

*****The Climate Reality Project, “Statement by Former Vice President Al Gore on Today’s Decision by the Trump Administration

to Withdraw from the Paris Agreement,” June 1, 2017, https://www.climaterealityproject.org/press/statement-al-gore-us-commitmentparis-agreement

******Lawrence Summers, “After 75 years of progress, was last week a hinge in history?” Washington Post, June 4, 2017,

https://www.washingtonpost.com/opinions/after-75-years-of-progress-was-last-week-a-hinge-in-history/2017/06/04/2085b91e-47cf11e7-bcde-624ad94170ab_story.html?utm_term=.7ccf9ee984ec

*******Jennifer Marlon, Eric Fine, and Anthony Keiserowtiz, “Majorities of Americans in Every State Support Participation in the

Paris Agreement,” Yale Program on Climate Change Communication, May 8, 2017,

http://climatecommunication.yale.edu/publications/paris_agreement_by_state/

sinecure?

11 21 no lnx

'Thought criminals': Aggrieved conservative elites announce new university dedicated to 'truth' — but who’s funding Ii?

David Badash and The New Civil Rights Movement November 08, 2021

Bari Weiss. Andrew Sullivan. Jonathan Rauch. Larry Summers.

Those are some of the more recognizable names a new university launched Monday lists on the front page of its website.

Its founder says some of them have been "treated like thought criminals."

The University of Austin (which sounds remarkably like The University of Texas at Austin, founded in 1883,) in an announcement says it is "dedicated to the fearless pursuit of truth." It is not currently accredited and offers no degrees.

But some of the people it is attracting have highly-controversial backgrounds. Indeed, some, like Weiss and Sullivan, seem to thrive on creating controversy.

It's clear, from its founder's message, that this is an enterprise dedicated to protect those who use their huge platforms to decry being "canceled."

"Nearly a quarter of American academics in the social sciences or humanities endorse ousting a colleague for having a wrong opinion about hot-button issues such as immigration or gender differences,"Pano Kanelos, the former president of St. John's University and apparently the founder of The University of Austin, writes Monday at Bari Weiss' Substack. "Over a third of conservative academics and PhD students say they had been threatened with disciplinary action for their views. Four out of five American PhD students are willing to discriminate against right-leaning scholars, according to a report by the Center for the Study of Partisanship and Ideology."

Kanelos discusses some of the University's founding faculty – a prerequisite appears to be having been subjected to criticism.

"On our quads, faculty are being treated like thought criminals. Dorian Abbot, a University of Chicago scientist who has objected to aspects of affirmative action, was recently disinvited from delivering a prominent public lecture on planetary climate at MIT. Peter Boghossian, a philosophy professor at Portland State University, finally quit in September after years of harassment by faculty and administrators. Kathleen Stock, a professor at University of Sussex, just resigned after mobs threatened her over her research on sex and gender."

Its FAQ answers the question "Why Austin?" by jokingly replying: "If it's good enough for Elon Musk and Joe Rogan, it's good enough for us."

The big question of course is who is funding this endeavor? The "University" says it will have a physical campus.

That's expensive, as is paying top names.

"We have secured the seed money necessary to launch the university. But we are in the process of securing $250 million, which will enable us to grow into a comprehensive university," it says.

"UATX has requested and is awaiting a tax-exempt determination from the IRS. At present, UATX is fiscally sponsored by Cicero Research, a tax-exempt entity organized under section 501(c)(3) of the Internal Revenue Code."

An online search for "Cicero Research" nets almost nothing, except a one page listing on Cause IQ, a company to help nonprofits grow.

According to that filing for the year ending December 2020, Cicero Research has no full-time employees, no assets, but under "characteristics" is tagged "political advocacy."

Who's actually funding this is currently unknown.

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The Women Who Were Right About the Economy

#

bigthink

Who could have saved us from the global financial crisis? In a word, women. The release of the Federal Reserve’s transcripts of policymaking meetings up to 2007 has shed new light on the machinations inside the central bank as the Great Recession dawned. One member of the Board of Governors cast in a positive light is Janet Yellen, the vice-chair, who saw the potential for trouble in the shadow banking system. She isn’t the only woman who might have done a better job than the man who outranked her:

:{

Brooksley Born. The former chair of the Commodities Futures Trading Commission warned that the Commodities Futures Modernization Act of 2000 could lead to excesses in the derivatives markets. The act eliminated most monitoring and regulation of the over-the-counter derivatives market where the subprime loan crisis exploded.But Born was overruled by Larry Summers, the Treasury secretary, and President Bill Clinton signed it into law.}:

Alice Rivlin. As vice-chair of the Board of Governors and a possible successor to Alan Greenspan as chair, her resignation in 1999, just as the Fed began to raise interest rates for the first time in four years, came as a surprise. Her view of monetary policy the late 1990s suggests she correctly perceived the global economy as more fragile than Greenspan did; the markets’ crash in 2000 soon forced him to reverse course. She later criticized Greenspan for endorsing the 2001 Bush tax cuts, which ended up casting the nation into deep deficits.

Sheila Bair. She chaired the Federal Deposit Insurance Corporation before, during, and after the financial crisis. A strong believer in aiding consumers more and big banks less, she dissented from Treasury Secretary Timothy Geithner’s view that bailing out big banks – some of which she said didn’t need the help – was the best way to get the economy back on its feet. She argued for more accountability, but she lost; the big banks got their money, with few strings attached.

Christina Romer. The first chair of President Barak Obama’s Council of Economic Advisers wanted a much bigger stimulus package than the one he eventually proposed to Congress in 2009 - $1.8 trillion rather than about $900 billion. But before Obama even saw the plan, Summers, who was director of the National Economic Council, persuaded her to water it down to $1.2 trillion. The shortcomings of the initial package led Obama to pursue additional stimulus, an effort largely stymied by the Republicans in the Congress. 

Would we be better off today if these women had held the top jobs in economic policy rather than the men who steamrolled them? There’s no way to know for sure, but my guess is that, in at least a few cases, the answer is yes.

==

Larry Summers

President Emeritus of Harvard University, Former Chief Economist of the World Bank

My sense is that cap and trade is not the route to the future. It did not make it politically in the US at a moment of great opportunity in 2009. And European carbon markets have been plagued by constant problems. And globally it’s even harder. My sense is that the right strategy has three major elements. First, as the G20 vowed in 2009, there needs to be aconcerted phase out of fossil fuel subsidies. This would help government budgets, drive increases in economic efficiency and substantially reduce global emissions. Second, there needs to be assurance of adequate funding for all areas of basic energy research. As a practical matter my guess is the world will produce non fossil fuel power in the next 25 years at today s fossil fuel prices or it will fail with respect to global climate change. Third, there is a strong case for concerted carbon taxes to further discourage greenhouse gas emissions. But this is a follow-on step for after the elimination of fossil fuel subsidies.

larry summers funder, women can' make it in college brookely born et al kicked his ass FIRE funder?

Meanwhile, gender- and ethnicity-speech battles continue. Horowitz says a particularly troubling example involved Harvard University President Lawrence Summers. In January Summers became the target of outrage when he suggested that “intrinsic differences” between men and women may account for the low representation of women at top levels of science.Women's groups and some faculty members loudly called for his resignation, and Summers ended up issuing repeated apologies.

==

==

But the Enron loophole was small potatoes compared to the devastation thatunregulated swapswould unleash. Credit default swapsare essentially insurance policies covering the losses on securities in the event of a default. Financial institutions buy them to protect themselves if an investment they hold goes south. It's like bookies trading bets, with banks and hedge funds gambling on whether an investment (say, a pile of subprime mortgages bundled into a security) will succeed or fail. Because of the swap-related provisions of Gramm's bill—which were supported by Fed chairman Alan Greenspan and Treasury secretary Larry Summers—a $62 trillion market (nearly four times the size of the entire US stock market) remained utterly unregulated, meaning no one made sure the banks and hedge funds had the assets to cover the losses they guaranteed.

In essence, Wall Street's biggest players (which, thanks to Gramm's earlier banking deregulation efforts, now incorporated everything from your checking account to your pension fund) ran a secret casino. "Tens of trillions of dollars of transactions were done in the dark," says University of San Diego law professor Frank Partnoy, an expert on financial markets and derivatives. "No one had a picture of where the risks were flowing." Betting on the risk of any given transaction became more important—and more lucrative—than the transactions themselves, Partnoy notes: "So there was more betting on the riskiest subprime mortgages than there were actual mortgages." Banks and hedge funds, notes Michael Greenberger, who directed the cftc's division of trading and markets in the late 1990s, "were betting the subprimes would pay off and they would not need the capital to support their bets."

These unregulated swaps have been at "the heart of the subprime meltdown," says Greenberger. "I happen to think Gramm did not know what he was doing. I don't think a member in Congress had read the 262-page bill or had thought of the cataclysm it would cause." In 1998, Greenberger's division at the cftc proposed applying regulations to the burgeoning derivatives market. But, he says, "all hell broke loose. The lobbyists for major commercial banks and investment banks and hedge funds went wild. They all wanted to be trading without the government looking over their shoulder."

http://www.prwatch.org/node/12232

Failing Up to the Fed, A Reporters' Guide to the Paper Trail Surrounding Larry Summers

by Mary Bottari — September 3, 2013 - 7:35am

• Topics: Banking

• Projects: Real Economy Project

 Share this

The Washington Post's Ezra Klein reports that Larry Summers is the "overwhelming favorite" of the Obama team for the job as Federal Reserve chairman. To convince the American public that one of the chief architects of the 2008 financial crisis should be the chief regulator of the U.S. financial system, supporters of Summers have their work cut out for them.

Cue the rewrite.

The New York Times reports that some of Mr. Summers's supporters "argue that better oversight of derivatives would not have prevented or significantly diminished" the 2008 financial crisis. One former Treasury official told the *Times* that Summers secretly wanted derivatives regulated, but couldn't win the support of Greenspan or Senate Republicans so dropped the idea.

For journalists who are being told what a brilliant man and insightful regulator Larry Summers was behind the scenes, here are a few items from his public record you might want to review.

The final report of the National Commission on the Causes of the Financial and Economic Crisis in the United States puts over-the-counter (OTC) derivatives "at the center of the storm," and specifically cites the Commodities Futures Modernization Act as a major contributing factor. "The enactment of legislation in 2000 to ban the regulation by both the federal and state governments of over-the-counter derivatives was a key turning point in the march towards the financial crisis." Read the report here.

In the spring of 1998, Deputy Treasury Secretary Larry Summers called Brooksley Born, the head of the Commodity Futures Trading Commission (CFTC), and yelled: "I have 13 bankers in my office who tell me you're going to cause the worst financial crisis since the end of World War II" if she moved forward with plans to bring transparency and reporting requirements to the OTC market. OTC derivatives were already causing huge loses around the globe. In 1994 Orange County California lost $1.5 billion speculating on OTC derivatives. Watch the Frontline investigation "The Warning" here.

Summers attacked Born publicly, testifying in Congress in July 1998: "As you know, Mr. Chairman, the CFTC's recent concept release has been a matter of serious concern, not merely to Treasury but to all those with an interest in the OTC derivatives market. In our view, the Release has cast the shadow of regulatory uncertainty over anotherwise thriving market-- raising risks for the stability and competitivenessof American derivative trading. We believe it is quite important that the doubts be eliminated." "The parties to these kinds of contracts are largely sophisticated financial institutions that would appear to be eminently capable of protecting themselves from fraud and counterparty insolvencies." Read Summers testimony here.

One of Summers primary arguments was that any new regulation could invalidate the burgeoning swaps market, yet Born made it clear in her release and in her testimony that new rules would be prospective. Previously the CFTC had generated prospective rules. "The release does not in any way alter the current status of any instrument or transaction under the Commodity Exchange Act. Any proposed regulatory modifications resulting from the concept release would be subject to rulemaking procedures, including public comment, and any changes that imposed new regulatory obligations or restrictions would be applied prospectively only." Read the concept release here.

Even though the 1998 Long-Term Capital Management derivatives disaster shook regulators anddemonstrated that derivatives deals could pose systemic risk to theentire economy,bank regulators and Congress ignored Born who cited "an immediate and pressing need to address possible regulatory protections in the OTC derivatives market."Instead they placed a six month moratorium on any CFTC regulation and Born resigned in early 1999.Read Born's speech on LTCM here.

Summers became Treasury Secretary in July 1999, receiving a congratulatory letter fromKen Lay, the President of Enron Corporation,addressed "Dear Larry." In his response to "Ken" on May 25, 1999, Summers included a handwrittenPS: "I'll keep my eye on power deregulation and energy-market infrastructure issues." Read the letters here.

Summers helped negotiate the World Trade Organization's Financial Services agreement that opened global markets to derivatives and other financial products and made it harder for signatory nations to regulate banking in the public interest. In the WTO agreement, which was negotiated behind closed doors, the United States effectively pledged to get rid of the 1933 Glass-Steagall law, which was seen as a barrier to market entry by many foreign banks that were structured differently. In 1997, Tim Geither urged Larry Summers to personally call the heads of America's top five banks to seal the deal. See the Geithner memo to Summers here and attached below.

Summers pushed for the repeal of the Glass-Steagall, which was created after the Great Depression to wall off traditional commercial banking activity from the Wall Street casino. The repeal allowed commercial banks to merge with investment banks, securities firms and insurance companies, creating "too big to fail" behemoths and unleashing an era of reckless speculation. On November 5, 1999 Summers hailed the passage of the repeal: "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st Century. This historic legislation will better enable American companies to compete in the new economy." Read the statement here.

On November 9, 1999, Summers and other regulators issued a report that would serve as the Congressional blueprint for the Commodities Futures Modernization Act drafted the following year. The "President's Working Group on Financial Markets" concluded that "under many circumstances, the trading of financial derivatives by eligible swap participants should be excluded from the CEA [Commodities Exchange Act]. To do otherwise would perpetuate legal uncertainty or impose unnecessary regulatory burdens and constraints upon the development of these markets in the United States." Read the Working Group Report here.

Summers personally reassured Ken Lay on November 22, 1999 that Enron's derivatives trades would not be regulated, directing him to pages 34-35 in the Working Group report that reads "in light of their small market share and the apparent effectiveness of private counterparty discipline in constraining the risk-taking of such derivatives dealers, the Working Group is not recommending legislative action with respect to such derivatives dealers at this time." Read the letter here.

Summers wrote to Congress on December 15, 2000 to "strongly support" the Commodities Futures Modernization Act. The bill that went even further than the legal changes called for in the President's Working Group Report, exempting derivatives from regulation by any federal bank regulator not just the CFTC. Summers also allowed the "Enron Loophole" to be included in bill (over the objections of the CFTC), which exempted energy trading on electronic commodity markets from regulation and helped Enron to gouge billions of dollars from West Coast consumers. Read the letter in the Congressional Record here.

As energy prices skyrocketed in California, Summers opposed Governor Gray Davis' plan to intervene with price controls, claiming: "This is classic supply and demand. The only way to fix this is ultimately by allowing retail prices to go wherever they have to go." Enron filed for bankruptcy in 2001, putting 20,000 employees out of work and Ken Lay was convicted of 10 counts of securities fraud, wire fraud and other offenses. Read Kurt Eichenwald's 2005 book on the collapse of Enron, "Conspiracy of Fools."

Summers departed the Treasury in 2001 and went off to be the President of Harvard, where he ignored repeated warnings by expert staff and lost Harvard some $2 billion of its endowment funds, including $1 billion on toxic interest rate swaps. Read about it in the Boston Globe and Bloomberg News.

:{Back at the White House in 2009 as head of the National Economic Council, Summers was a chief architect of the generous bank bailout, the weak stimulus and the limited structural reforms in Dodd-Frank. Summers opposed numerous efforts to strengthen the bill, most tellingly, the President's effort to include the "Volcker Rule." Volcker's aim was to put an end some of the riskiest practices by curtailing proprietary trading at U.S. banks and limiting their investments in private equity firms and hedge funds, but the rule was slow walked and weakened by Summers. Read Richard Wolffe's book "Revival::(style="background-color:#ffff66ff"):}:The Struggle for Survival Inside the Obama White House:{."}:

Summers was overheard in November of 2008 chastising Arthur Levitt (former head of the SEC under Clinton) for saying that Brooksley Born was right "I read somewhere you were saying that maybe Brooksley Born was right. ... But you know she was really wrong." Levitt confirmed the account, available here.

In the years that followed the 2008 meltdown, Clinton, Greenspan, Levitt even Rubin admitted they made mistakes or expressed some regret for these actions. Summers abided by his own advice to Geithner, as Geithner prepped for his confirmation session as Treasury Secretary, "don't anyone admit we did anything wrong." Read Ron Suskind's "Confidence Men."

In 2012, Summers was grilled by a British reporter and defended his record on derivatives, saying "at the time Bill Clinton was president, there essentially were no credit default swaps. So the issue that became a serious problem really wasn't an issue that was on the horizon... If you want to assign responsibility, If you take amarket that essentially didn't exist in the 1990s, that grew for eight years from 2001 to 2008, and then brought on a major collapse, if you were looking to hold people responsible, you would look to... officials of the Bush Administration."Credit default swaps were invented by JP Morgan Chase to offset the risk of the Exxon Valdez disaster in 1994 and plenty of people were worried about them, including presidential adviser Joseph Stiglitz. Watch the Summers interview.

In the shadows, between 2000-2008, the OTC derivatives market grew from $95.2 trillion to $672.6 trillion, notational value. When the dark market deals started to go sour, the impact was felt around the world. The man who was featured on the cover of Time Magazine as part of the "Committee to Save the World" with Robert Rubin and Alan Greenspan in 1999,instead helped bring it to its knees.

==

outgoing clinton Treas folk tried to broker deal w/ davis, lay etc; larry seems even handed Kurt E conspiracy of fools

lisa

 Opposition is growing to the idea of President Obama naming Larry Summers to head the Federal Reserve. As William Greider wrote in The Nation [4], "Summers is a toxic retread from the old boys' network and a nettlesome egotist who offended just about everyone during his previous tours in government. More to the point, Summers was a central player in the grave governing errors that led to the financial collapse and a ruined economy."

Summers is so cocksure and callous he once suggested [5] using "underpopulated countries in Africa" as toxic waste dumps.

Now he is on Obama's short list for replacing Ben Bernanke as chairman of the Fed's governing board. Bernanke was chosen by President George W. Bush in 2006 after the retirement of President Ronald Reagan's choice, Alan Greenspan. In recent years, Greenspan has acknowledged that he failed to properly assess the Wall Street practices that crashed the economy in 2008 and has endorsed more regulation of the big banks.

Summers, however, has failed to acknowledge [6] his own significant contributions to the financial crisis.

When he served as the Secretary of the Treasury under President Bill Clinton, Summers pushed to repeal Glass-Steagall, unleashing monster "too big to fail" banks and putting taxpayers on the hook for their reckless gambling. He famously opposed CFCT Chair Brooksley Born's efforts to regulate the growing

derivatives market. Even Clinton has admitted that wasn't the smartest move [7].

Insiders in DC have nodded to a "whisper campaign" against the elevation of the Fed's Vice-Chairman Janet Yellen. She would be the first woman to serve as Chairman, if she were nominated and confirmed.

Some allies of Summers have been busy damning Yellen with the faint praise of being knowledgeable about monetary policy but not"aggressively brilliant." [8] Meanwhile, Summers is often referred to as brilliant, despite the numerous severe failures in judgment he has racked up over the years, including a record of what many consider to be sexism [9].

Sound familiar? Apparently Summers' friends referred to by the New York Times as the "Rubin boys" also think that women innately lack men's "aptitude" at math and sciences. This famous remark by Summers helped spark a "no confidence" vote and censure by the faculty while he was President of Harvard.

But when he helped Harvard rack up some $2 billion in investment fund losses [10], the university was forced to act. Moreover, as detailed in the Naked Capitalism [11]: "the scandal that led to his ouster at Harvard, was NOT the 'women suck at elite math and sciences' remarks. The university has conveniently let that be assumed to be the proximate cause."

"In fact, it was Summers' long-standing relationship with and protection of Andrei Schleifer, a Harvard economics professor, who was at the heart of a corruption scandal where he used his influential role on a Harvard contract advising on Russian privatization to enrich himself and his wife, his chief lieutenant Jonathan Hay, and other cronies."

After Summers resigned the Harvard presidency, he took a "part-time" post making $5 million for a little more than a year at a hedge fund, plus nearly $3 million in speaker fees from corporations. He also opposed caps on executive pay at firms receiving federal stimulus money, after accepting free flights on luxury corporate jets from Citibank.

And, as if all that were not damning enough, Summers considers the late free market fundamentalist Milton Friedman his mentor, proclaiming "we are all now Friedmanites." Friedman is considered the economic architect of policies that are basically capitalism unrestrained and his legacy includes a determination to destroy the public school system in America by privatizing it. That's one of the reasons why a number of right-wing legislators from the American Legislative Exchange Council 12 -- a group so captured by corporations that legislators vote as equals with lobbyists on model bills --were overheard chanting "Milton Friedman, Milton Friedman, Kookookachoo!"

The last thing America needs right now is a Friedmanite at the helm of the Fed. Summers would bring more winter in the economy for ordinary Americans while his buddies on Wall Street would get more and more of America's wealth to offshore.

As R.J. Eskow observed [13], "Democrats would be insane to let the president nominate Larry Summers."

Center for Media and Democracy • 520 University Avenue, Suite 260 • Madison, Wisconsin 53703 

Phone: 608-260-9713 • Fax: 608-260-9714

Source URL: http://www.prwatch.org/news/2013/08/12201/voices-rising-against-hedge-fund-millionaire-larry-summers-head-fed

Links:

[1] http://www.prwatch.org/users/35268/lisa-graves

[2] http://www.prwatch.org/projects/banksterusa

[3] http://www.addtoany.com/share_save?linkurl=http%3A%2F%2Fwww.prwatch.org%2Fnews%2F2013%2F08%2F12201%2Fvoices-rising-against-hedge-fund-millionaire-larry-summers-head-fed&linkname=Voices%20Rising%20Against%20Hedge%20Fund%20Millionaire%20Larry%20Summers%20to%20Head%20the%20Fed

[4] http://www.thenation.com/blog/175372/stop-larry-summers-he-messes-again#axzz2b3pbpvqA

[5] http://progressive.org/larry_summers_unfit_to_head_world_bank.html

[6] http://business.time.com/2011/04/12/larry-summers-no-regrets-on-deregulation/

[7] http://www.bloomberg.com/news/2010-04-18/clinton-says-rubin-summers-gave-him-wrong-advice-on-derivatives-rules.html

[8] http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/19/the-subtle-sexist-whispering-campaign-against-janet-yellen/

[9] http://blog.ourfuture.org/20130724/not-sexist-summers-please

[10] http://www.boston.com/news/local/massachusetts/articles/2009/11/29/harvard_ignored_warnings_about_investments/?page=1

[11] http://www.nakedcapitalism.com/2013/07/why-larry-summers-should-not-be-permitted-to-run-anything-more-important-than-a-dog-pound.html

[12] http://www.ALECexposed.org

[13] https://www.commondreams.org/view/2013/07/26-1

The last thing we need is a chair of the Federal Reserve that prioritizes Wall Street over the rest of us. If you aren’t familiar with Summers, he is notorious for dismissing concern over the lack of regulations in financial markets right before the crash in 2008. In fact, in the 1990's he led the charge to deregulate Wall Street in the first place. 

If that isn’t enough, Summers is also known for his offensive views that women are somehow less capable in science, technology, and economic fields. With women dominating institutions of higher education and taking a lead in the job market, we should have someone at the Federal Reserve who respects the important role women play in our economy and our society. 

Please, sign our petition and tell President Obama not to appoint Larry Summers as chair of the Federal Reserve. We can do better. 

=== 

joked 3rd world is underpolluted (vultures 325)

bono on 5/13 charlie rose  says larry s big in debt forgive; calls out API for quash transparency corruption revel how much paid for access

===

The Sellout of the Ivory Tower, and the Crash of 2008 (Excerpt)

Posted: 05/22/2012 8:33 am

Re-printed fromPredator Nation: Corporate Criminals, Political Corruption, and the Hijacking of America; Copyright © 2012 by Charles Ferguson. Published by Crown Business, a division of Random House, Inc.

Many people who saw my documentary film about the 2008 economic crisis, Inside Job, found that the most surprising, and disturbing, portion of the film was its revelation of widespread conflicts of interest in universities, think tanks, and among prominent academic experts on finance, economics, business, and government regulation. Viewers who watched my interviews with eminent professors were stunned at what came out of their mouths.

Over the last thirty years, in parallel with deregulation and the rising power of money in American politics, significant portions of American academia have deteriorated into "pay to play" activities. These days, if you see a famous economics professor testify in Congress, appear on television news, testify in a legal case or regulatory proceeding, give a speech, or write an opinion article in the New York Times (or the Financial Times, the Wall Street Journal, or anywhere else), there is a high probability that he or she is being paid by someone with a big stake in what's being debated. Most of the time, these professors do not disclose these conflicts of interest, and most of the time their universities look the other way. Increasingly, professors are also paid to testify for defendants in fraud trials, both civil and criminal. The pay is high -- sometimes a quarter of a million dollars for an hour of congressional testimony. But for banks and other highly regulated industries, it's a trivial expense, a billion or two a year that they barely notice; and just as with politicians, it's a very good investment, with very high benefits.

Academics on industry payrolls are now so numerous and powerful that they can often prevent universities, professional associations, and academic journals from adopting or enforcing strong conflict-of-interest policies. They also have a chilling, even dominant, effect on several areas of academic research and policy analysis.

The sale of academic "expertise" for the purpose of influencing government policy, the courts, and public opinion is now a multibillion-dollar business. Academic, legal, regulatory, and policy consulting in economics, finance, and regulation is dominated by a half dozen consulting firms, several speakers' bureaus, and various industry lobbying groups that maintain large networks of academics for hire specifically for the purpose of advocating industry interests in policy and regulatory debates.

These consulting firms are not like McKinsey or the Boston Consulting Group. They do not exist to help companies make better products or operate efficiently. Their principal focus is on helping companies avoid or influence legislation, public debate, regulation, prosecution, class-action lawsuits, antitrust judgments, and taxes. The largest academic regulatory consulting firms are the Berkeley Research Group, the Analysis Group, the Brattle Group, Criterion, Compass Lexecon, and Charles River Associates. All have relationships with many prominent academics. Their combined academic roster is around one thousand, and their combined revenues are certainly well over $1 billion per year. (Most are private and don't release revenue information.) In some cases, they include a majority of the prominent academics in important policy-related fields, such as antitrust policy and the economics of regulation.

But how important and influential are these people and their relationships? Let's take two examples, one Republican and one Democratic: Glenn Hubbard and Larry Summers.

R. Glenn Hubbard became dean of Columbia Business School in 2004, shortly after leaving the George W. Bush administration, where he was chairman of the White House Council of Economic Advisers from 2001 through 2003. Hubbard has a PhD from Harvard and has taught at Columbia since 1988. Hubbard is co-chairman of the Committee on Capital Markets Regulation, a nonprofit organization that serves as a de facto public policy lobbying organization for Wall Street.

Much of Hubbard's academic work has been focused on tax policy. A fair summary is that he has never seen a tax he would like, particularly one on corporations or the wealthy. He was deeply involved in designing the Bush administration's tax cuts in 2003, which heavily favored the wealthy; half of their benefits went to the wealthiest 1 percent of the population.

Hubbard also coauthored an astonishing article with William C. Dudley in November 2004. The article, entitled "How Capital Markets Enhance Economic Performance and Facilitate Job Creation," was published by the Goldman Sachs Global Markets Institute. Dudley, his coauthor, was the chief economist at Goldman Sachs at the time. In 2009, when Tim Geithner became Obama's treasury secretary, Dudley succeeded Geithner as president of the Federal Reserve Bank of New York; he's still there. This should not reassure you. But neither should the fact that Glenn Hubbard remains dean of Columbia Business School.

Their article would be kind of funny, if it weren't deadly serious. Remember, this is November 2004, with the bubble well under way.

• "The ascendancy of the US capital markets . . . has improved the allocation of capital and risk throughout the US economy. . . . [The benefits include] enhanced stability of the US banking system . . .more jobs and higher wages . . . less frequent and milder [recessions] . . . a revolution in housing finance."
• "The capital markets have helped make the housing market less volatile. . . . 'Credit crunches' of the sort that periodically shut off the supply of funds to home buyers, and crushed the homebuilding industry . . . are a thing of the past."
• "The revolution in housing finance has also led to another radical transformation that has been important in making the economy less cyclical."
• "We believe that the economic performance of the United States over the past decade provides strong evidence of the benefits of well-developed capital markets."

Hubbard refused to say whether he was paid to write the article. He also refused to provide me with his 2001 federal financial disclosure form (from when he entered the George W. Bush administration), which we could not obtain otherwise, because the White House had already destroyed it. Hubbard also refused to identify most of his private consulting clients. He is currently on the boards of MetLife, ADP, Inc., KKR Financial Corporation, and BlackRock Closed End Funds. In 2010, the first three paid him $707,000 in cash and stock. Consulting/advisory relationships listed on Hubbard's CV include Nomura Holdings, Bank of America, Capital Research, Citigroup, Fidelity,

Franklin Resources, JPMorgan Chase, Visa, Laurus Funds, Chart Venture Partners, and Ripplewood Holdings. Until January 2009, he was also on the board of Capmark, a major player in commercial real estate during the bubble that went bankrupt after the crisis.

Hubbard was paid $100,000 to testify for the criminal defense of two Bear Stearns hedge fund managers prosecuted in connection with the bubble, who were acquitted. That assignment came through the Analysis Group, one of the large economic consulting firms mentioned earlier. Hubbard's Columbia web page lists the Analysis Group as a consulting client but does not list the ultimate, real clients for whom he worked via this relationship. Nor does his Columbia web page list his paid speaking engagements. However, satisfied clients giving public testimonials to Hubbard's speaking abilities include the Alternative Investment Group, BNP Paribas, the Massachusetts Bankers' Association, and Barclays Bank.

In 2011, Hubbard became a senior economic advisor to Mitt Romney's presidential campaign.

Larry Summers, who is undeniably brilliant, became a full professor at Harvard at a very young age and by now has held almost every important government position in economics. After being chief economist of the World Bank, he became, successively, undersecretary of the treasury for international affairs, deputy treasury secretary, and finally treasury secretary in the Clinton administration. He then became president of Harvard, his candidacy championed by Robert Rubin, until Summers was forced out in 2006. In 2009 he became director of the National Economic Council in the Obama administration; he returned to Harvard in 2011 as a professor at the John F. Kennedy School of Government.

At the World Bank, Summers authorized a memo suggesting that wealthy nations should export pollution to the poor; when president of Harvard, he suggested that women might be innately inferior to men in scientific reasoning. Then there were his policy choices: remaining entirely silent about the abuses within investment banking that furthered the Internet bubble; working with Robert Rubin and Alan Greenspan to repeal the Glass-Steagall Act and then to ban regulation of all privately traded derivatives.

When Summers became president of Harvard, he also started consulting to, and making speeches for, financial services firms. Because Harvard, along with most other major universities, does not require its faculty (or its presidents) to disclose outside income, we do not know how much Summers made. Even now, his Harvard Web page lists none of his consulting clients or speaking engagements.

Most of our information about his outside activities at Harvard comes from his mandatory federal disclosure form. (Like Summers himself, Harvard's president and provost declined to be interviewed for my film and also declined to respond to written questions.) Shortly after he was forced to resign as president and returned to being a professor, Summers agreed to work one day a week at D. E. Shaw, a large hedge fund, which paid him over $5 million in the year before Summers entered the Obama administration in 2009.

Summers's 2009 federal disclosure form stated his net worth to be $17 million to $39 million. His total earnings in the year prior to joining the administration were $7,813,000. He made $1,729,000 from thirty-one speaking engagements, nearly all for financial services companies; Goldman Sachs paid him $135,000 for one speech. He was also paid $45,000 by Merrill Lynch for a speech on November 12, 2008 -- after Merrill had completely collapsed financially, and one week after Obama's election. After questions were raised, Summers donated the Merrill Lynch fee to charity.

In the Obama administration, Summers opposed strong measures to sanction bankers or curtail their income. He has never apologized for any of the decisions or statements he made between 1995 and 2006.

And as of early 2012, the web page on his speaking agent's website included testimonials about Summers from seven clients. All but one (Regent University) were financial; they included the Texas Pacific Group, the Chinese Finance Association, Charles River Ventures, and Institutional Investor magazine.

Lawrence Henry "Larry" Summers is Director of President Obama's National Economic Council, an economic policy agency within the executive branch of the US government. President Obama appointed Summers to this position in November, 2008. ^[1]^ Summers is also a professor at Harvard University's Kennedy School of Government.

Role in financial crisis and bailout

Advocate of Financial Deregulation

Between 1992 and 2001, Summers held various positions in the US Treasury Department, including that of Treasury Secretary from 1999 to 2001.^[2] Summers has described the 1990’s as a time when “important steps” were taken to achieve “deregulation in key sectors of the economy” such as financial services. He has also said that during this period government officials and private financial interests collaborated in a spirit of cooperation “to provide the right framework for our financial industry to thrive.” ^[3]^ Summers recommended before he left the Treasury Department that removing policies that “artificially constrict the size of markets” should remain a priority for the US government.^[4]

Along with Robert Rubin and Alan Greenspan, Summers brought about elimination of key US financial regulations including the Glass-Steagall Act. He was particularly aggressive in his efforts to block regulations of derivatives, regulations that might have prevented the economic meltdown the US suffered in 2008. According to economist Dean Baker, "The policies he promoted as Treasury Secretary and in his subsequent writings led to the economic disaster that we now face." ^[5]^

Support for Repeal of the Glass-Steagall Act

When he was Treasury Secretary, Larry Summers advocated repeal of the Glass-Steagall Act^[6], which was a target of the financial industry. In their report - “Sold Out: How Wall Street and Washington Betrayed America” - Robert Weissman and Harry Rosenfeld identified the repeal of this legislation as one of the main causes of the 2008 financial crisis. According to Weissman and Rosenfeld, “The Financial Services Modernization Act of 1999 formally repealed the Glass-Steagall Act of 1933 (also known as the Banking Act of 1933) and related laws, which prohibited commercial banks from offering investment banking and insurance services…The 1999 repeal of Glass-Steagall helped create the conditions in which banks invested monies from checking and savings accounts into creative financial instruments such as mortgage-backed securities and credit default swaps, investment gambles that rocked the financial markets in 2008.” ^[7]^

Summers worked for Congressional approval of the Financial Services Modernization Act, sponsored by Republicans Phil Gramm, Jim Leach and Thomas Bliley. This Act eliminated provisions in the Glass-Steagall Act that prohibited banks from affiliating with securities firms. It also repealed provisions in the Bank Holding Company Act that prevented banks from underwriting insurance. Arianna Huffington points out that the Financial Services Modernization Act “created an oversight disaster, with supervision of banking conglomerates split among a host of different government agencies -- agencies that often failed to let each other know what they were doing and what they were uncovering.” ^[8]^

Summers has promoted financial deregulation as a form of modernization, rather than a return to the lack of government oversight and instability of the pre-Depression era. In 1999, Summers claimed the Financial Services Modernization Act would create a financial regulatory system “for the 21st century” and “promote stability in our financial system.” ^[9]^ However, Democrat Senator Byron Dorgan warned at the time “I think we will look back in 10 years’ time and say we should not have done this, but we did because we forgot the lessons of the past, and that that which is true in the 1930s is true in 2010. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.” ^[10]^

Summers argued for elimination of the Glass-Steagall Act by saying it imposed “archaic financial restrictions.”^[11] He said that the US government “must allow competition to work” and that meant “allowing common ownership of banking, securities and insurance firms.” Summers insisted that US financial organizations must have the ability to choose “the structure that is right for them” and to offer “a full range of products.” In Summers’ view, the Financial Services Modernization Act that repealed Glass-Steagall struck the right balance between giving financial institutions more flexibility and protecting US taxpayers. ^[12]^

Summers cast the repeal of the Glass-Steagall Act as a victory for the international competitiveness of US financial firms and for US consumers: “If it can be done without compromising other critical objectives, repeal of the common ownership restrictions of current law would be an important boost to our financial system. Our leadership of the world's financial markets would be enhanced. And consumers would see the benefits in the form of greater innovation and lower prices.” ^[13]^

However, the financial innovation that followed the repeal of the Glass-Steagall Act has been criticized for its damaging effects on the US economy and US taxpayers. In their report proposing financial regulatory reform, the Congressional Oversight Panel for the Troubled Asset Relief Program observed that “Creativity and innovation are too often channeled into circumventing regulation and exploiting loopholes.” The Panel’s report notes how after the introduction of key financial regulations during the Depression - including the 1933 Glass-Steagall Act that Summers helped to repeal - the US had enjoyed a long period of high economic growth that was also free of major financial crises. ^[14]^

Opposition to Regulation of Derivatives

Summers’ principal link to the 2008 financial crisis may be the role he played while at the Treasury Department in blocking regulation of derivatives ^[15]. Conducted outside of formal exchanges, most derivative trading is not only unregulated, it is also largely unreported so that the full extent of the risk financial institutions are exposed to cannot be known. Over-the-counter derivatives are traded in “dark markets” with little transparency.

Summers argued as Treasury Secretary that the US should deregulate derivative markets so they could grow. He saw benefits for the US housing market from expansion of derivatives, arguing that “by enabling more sophisticated management of assets, including mortgages, consumer loans, and corporate debt, derivatives can help lower mortgage payments, insurance premiums, and other financing costs for American consumers and businesses.” ^[16]^

However, Frank Partnoy, a former Wall Street trader, has explained how unregulated derivatives transformed the US sub-prime mortgage crisis into a full-blown global financial crisis. “Without derivatives, the total losses from the spike in subprime mortgage defaults would have been relatively small and easily contained…Instead, derivatives multiplied the losses from subprime mortgage loans, through side bets based on credit default swaps ^[17]. Still more credit default swaps, based on defaults by banks and insurance companies themselves, magnified losses on the subprime side bets. As investors learned about all of this side betting, they began to lose confidence in the system. When they looked at the banks’ financial statements, all they saw were vague and incomplete references to unregulated derivatives.”^[18]

While he was at the Treasury Department, Summers’ enthusiasm for financial deregulation conflicted with the views of Brooksley Born, who became Chair of the Commodity Futures Trading Commission in 1996. Born had extensive previous experience working as a lawyer in the derivatives area and was concerned about the lack of oversight of this multi-trillion dollar financial market. However, Summers collaborated with Alan Greenspan, Robert Rubin, and Arthur Levitt to block Born’s efforts to initiate discussion of regulating derivatives. According to New York Times report Timothy O’Brien “They were all part of a very concerted effort to shut her up and to shut her down. And they did, in fact, shut her up and shut her down. Bob Rubin is not a guy who likes confrontation. He's confrontation-averse. But he understands that you need someone in there who can swing a heavy axe, and that person was Larry Summers. He was the enforcer.” ^[19]^

Former CFTC director Michael Greenberger has recounted how Summers called Born personally to accuse her of risking a major financial crisis with her proposal ^[20]^ to discuss regulation of derivatives. Summers echoed the concerns of bankers who were in his office at the time he made the call to Born.^[21]

In his Senate Committee testimony opposing Brooksley Born’s initiative, Summers stated that opening the door to regulation of derivatives had “cast the shadow of regulatory uncertainty over an otherwise thriving market - raising risks for the stability and competitiveness of American derivative trading.” Summers opposed even raising “the possibility of increased regulation over this market” because of the uncertainty it might create. ^[22]^

Summers praised the $26 trillion, unregulated, over-the-counter (OTC) US derivatives market as “second to none”, playing “a major role in our own economy”, and acting as “a magnet for derivative business from around the world”. Summers argued that not only Wall Street but also the average person had an interest in the growth of derivatives markets: “OTC derivatives directly and indirectly support higher investment and growth in living standards in the United States and around the world.”.^[23]

Summers’ view of derivatives as benefiting average Americans contrasted with Born’s, who testified that "Losses resulting from misuse of OTC derivatives instruments or from sales practice abuses in the OTC derivatives market can affect many Americans." ^[24]^ The US economy had already experienced a number of disasters that signaled the dangers of unregulated derivatives: the largest municipal bankruptcy in US history – that of Orange County, California – occurred in 1994 because of losses on derivatives amounting to $1000 for every resident^[25]; two US corporations – Proctor and Gamble and Gibson’s Greeting Cards – had been “taken to the cleaners” in 1994 by derivative traders from Bankers Trust^[26]; and in 1998, as Summers was testifying about the risk-management benefits of derivatives, Long Term Capital Management was in the process of self-destructing and almost taking the banking system down with it, having made $1.25 trillion in derivative trades with major banks despite holding only $4 billion to back them up. ^[27]^

Support for Permanent Deregulation of Derivatives

As well as blocking Brooksley Born’s efforts to regulate derivatives, Summers worked to ensure derivatives remained permanently deregulated by promoting passage of the Commodity Futures Modernization Act. ^[28]^ Summers said the Act would “allow the United States to maintain its competitive position in this rapidly growing sector…” This legislation was another piece of deregulatory legislation sponsored by Republican Senator Phil Gramm. Summers supported the Act’s exclusion of over-the-counter derivatives from regulation under the Commodity Exchange Act, and also from state-level laws that regulate gambling.

In a report ^[29]^ he co-authored on derivatives that preceded passage of the Commodity Futures Modernization Act, Summers recommended the US government permanently exclude from the Commodity Exchange Act derivative trades between “sophisticated” parties. While Summers was President of Harvard, the university purchased derivatives in the form of interest rate swap contracts. These derivative contracts involved Harvard in paying high fee to investment banks and having to compensate for massive losses when interest rates fell. The losses occurred despite the “sophistication” in financial issues that might have been expected of Harvard’s leaders, including Summers. ^[30]^

Summers and his co-authors in the report on derivatives argued against imposing “unnecessary regulatory burdens and constraints upon the development of these markets in the United States.” Although the US had already experienced problems with derivatives, the report concluded there was “no compelling evidence of problems involving bilateral swap agreements that would warrant regulation under the Commodity Exchange Act.” ^[31]^

Summers characterized both the Financial Services Modernization Act and the Commodity Futures Modernization Act, despite their deregulatory impacts, as “clear steps to strengthen the integrity of America's financial system.” He told a business lobby group that “Even in the U.S., with the most open financial markets in the world, further deregulation of domestic financial markets, as we've recognized in our financial services legislation proposals, can make an important difference in spurring a healthier and more efficient financial sector.”^[32]

Record and controversies

Role as Director of the National Economic Council

The National Economic Council is the agency responsible for advising the U.S. President on economic policy. As Director of the NEC, Summers is “the only top adviser with a West Wing office, sees the president more than the other economic advisers and controls the daily economic briefings.” ^[33]^

Summers had a key role in determining the size of the economic stimulus package the Obama administration submitted to Congress. In a July 2009 speech, Summers highlighted how bad the economy was when the Obama administration took office. He said “Fear was widespread and confidence was scarce.” The lesson he took from previous economic crises was that government’s response could not be “too little or too late.” ^[34]^

The size of the stimulus however has been criticized as too little. Economist Paul Krugman warned that while cutting the size of the stimulus might get more Republican votes, it would fail to significantly reduce unemployment. This failure would then be blamed on the Democrats and be used to argue that government spending does not work. ^[35]^

Links to the Financial Industry

After resigning under pressure from being President of Harvard University, Summers sought jobs on Wall Street with Goldman Sachs and Citigroup. ^[36]^ He was hired by one of the world’s largest hedge funds, D.E. Shaw, where he worked one day a week and earned $5.2 million in the year before he became Director of the National Economic Council. ^[37]^ Between 2004 and 2006, he had worked as a consultant for another hedge fund, Taconic Capital Advisors. In 2009, Summers tried to get one of the founders of Taconic appointed to head the government’s financial bailout oversight office. Summers now seeks input on public policy issues from the hedge fund managers he met while working with the industry, including the CEO of BlackRock. ^[38]^

While his former financial industry colleagues say they feel more confident in the administration with Summers in his current post, others have questioned whether the public is served by his ties to the financial sector. Professor Andrew Sabl has said “This is what might be called contamination. Did Summers spend so much time with the hedge fund, or its investors, sovereign wealth funds, and so on, that he started to think like them?” ^[39]^

Summers’ financial disclosure forms for 2008 indicate that in addition to his $5.2 million compensation from D.E. Shaw, he also earned $2.7 million in speaking fees. Among the financial institutions that paid him to speak were JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch, with Goldman Sachs paying $135,000 for a single appearance. ^[40]^

Views on the Role of Regulation in Financial Markets

As Treasury Secretary, Summers recognized potential problems could arise due to “lack of transparency, the risks that hedging strategies and models may not live up to their design, and the toxic combination of excessive leverage and illiquidity.” These problems would end up creating the 2008 financial crisis. However, despite his own criticisms of the notion that markets are self-correcting, in 2000 Summers argued against government regulation on the grounds that the financial industry had demonstrated “significant self-correction where excesses had developed”. He gave the following rationale for limited government oversight of the financial industry:

“As I have stated before, it is the private sector, not the public sector, that is in the best position to provide effective supervision and reduce the likelihood that these issues rise to a level that could threaten market stability. Market discipline is the first line of defense in maintaining the integrity of our financial system.”

The “best approach to regulation” in Summers’ view, was “to ensure that public activities do not crowd out the supervision provided by counterparties, creditors and investors.” ^[41]^ Financial regulation should be “based on a presumption of permission rather than a presumption of prohibition.” ^[42]^

A section of one of Summers’ speeches ^[43]^ as Treasury Secretary is titled: “Providing a Strong Legal and Regulatory Framework for the Financial Markets.” However, the examples Summers gives of the public sector’s contribution to this “strong regulatory framework” are in fact the deregulatory acts he championed: the 1999 Financial Services Modernization Act which repealed the Glass-Steagall Act and the 2000 Commodity Futures Modernization Act. Summers appeared to view deregulation as the primary contribution the public sector could make to strengthen financial markets.

According to Summers, the goal of government policies should be to help financial corporations expand, and that was why deregulation was needed. He claimed that governments should implement “policies that help to expand the size of markets…That means that deregulation becomes that much more important, to ensure that government is not preventing or distorting the development of fast-growing markets. That is we worked so hard to pass the right kind of Financial Modernization legislation last year…”^[44]

Robert Rubin, Summers’ mentor and predecessor as Treasury Secretary, relates in his memoir that “Larry thought I was overly concerned with the risks of derivatives.” Summers has recently explained his own lack of concern by saying “If we had known that derivatives markets would mushroom the way they did and that regulators would remain spectators, we would have acted.” ^[45]^ However, Summers’ rationale for deregulating the derivatives market was precisely so that it could expand and he took a lead role in sidelining regulators like Brooksley Born who wanted to act.

Summers’ opinion while at the Treasury Department was that public servants should work co-operatively with the financial institutions they are responsible for regulating: “By drawing on a spirit of cooperation between the private sector and the public sector, over the past 8 years this Administration has worked to provide the right framework for our financial industry to thrive.” ^[46]^

During George Bush’s presidency, Summers was critical of the government’s lack of oversight of critical areas of the economy. Asked to explain his apparent change of attitude towards regulation, Summers said the following: “And so when things were pretty screwed up, and the dominant thrust of the policy had been of doing nothing, the inclination was much more on the activist side. But I don’t think it’s because I changed, I think it’s because the world changed.”^[47]

Views on the Role of the Finance Industry in the US Economy

Summers promotes the concept of “a post-industrial age” where manufacturing is not key to prosperity. He has said that the strength of the US economy largely relies on the strength of its financial system. An expression he was fond of repeating as Treasury Secretary was: “Financial markets do not just oil the wheels of economic growth. They are the wheels.” ^[48][49]^

For Summers, “modern competitive finance” is an area where the US excels: “No other financial market is so open to foreign competition or so quick to innovate, whether it be in the area of securitization, financial derivatives, high-yield debt, or equity finance”. He has particular praise for the US derivatives market, which he sees as “a powerful symbol of the kind of innovation and technology that has made the American financial system as strong as it is today.” In contrast, Warren Buffet likens derivatives to “time bombs, both for the parties that deal in them and the economic system. ^[50]^

Summers identifies the well-being of US financial institutions with that of the overall economy: “In a very real sense, the financial system is the central nervous system of our economy. And just as the past dynamism of our financial sector has been central to America's current prosperity, so the future success of that sector will be very important to the well-being of the economy as a whole.” ^[51]^

Recently, Summers has commented on the ways to address high unemployment job rate and the lack of economic growth. "This is a profoundly important problem for our society, but it's the task of economists to analyze it in a more bloodless way." ^[52]^ "Asked when that high unemployment would abate, he explained that it would depend upon "the pace of the economic recovery in terms of GDP" [Gross Domestic Product] and whether the formula that economists have historically used to predict job growth based on GDP would continue to be skewed by unusually high productivity. "Make your judgment about the GDP forecast over the next several years. Take your guess about whether the formula is going to snap back, or continue to be off, and you can form a view about the unemployment rate." Maybe things will restore to normal," he said -- in which case job growth would actually outpace GDP. "That would be my guess, though not one I would hold confidently." ^[53]^ "But asked if the country needs another stimulus, he replied: "I don't think framing the question in terms of a 'stimulus' is very helpful." He said he favored continuing unemployment insurance, new funding for local governments and investments in energy efficiency -- three major progressive goals. But beyond that, he said: "Is this the moment for some major new experiment in Keynesian pump-priming? Absolutely no." ^[54]^

With respect to the growth of large American Banks, Summers opposes breaking huge banks into smaller institutions. "But that's not the important issue," Summers said during the interview, adding to his answer as to why the U.S. shouldn't break up megabanks. "[Observers] believe that it would actually make us less stable, because the individual banks would be less diversified and, therefore, at greater risk of failing, because they would haven't profits in one area to turn to when a different area got in trouble. And most observers believe that dealing with the simultaneous failure of many -- many small institutions would actually generate more need for bailouts and reliance on taxpayers than the current economic environment," he added. ^[55]^

Views on Trade

Summers had worked as a consultant for the Coalition of Services Industries - a lobby group founded by American Express, Citibank and AIG - before he joined the Treasury Department. The Coalition was founded in the 1980’s to get an international agreement on trade in financial services. According to Harry Freeman, the American Express vice-president assigned to head this lobby group, the decision by Amex to spend unlimited funds on the lobbying campaign and hire Larry Summers and others “paid off.” ^[56]^

As Treasury Secretary when he was speaking to a luncheon sponsored by the Coalition of Service Industries, Summers thanked participants on behalf of the Treasury Department for their “terrific co-operation” in advancing trade priorities that “the U.S. government and that U.S. industry share.” ^[57]^

Summers has said that the most important issue that will affect the lives of Americans for the next fifty years is the country’s support for global integration and open markets. In advance of the World Trade Organization 1999 Ministerial in Seattle, Summers argued that while there is a strong political, economic, and national security case for trade, the benefits are undervalued. He gave as an example that Americans do not notice they are able to buy twice as many Christmas toys “because of our increased trade links with very poor countries who can make these things more cheaply.” ^[58]^

In a 1999 speech to the insurance industry, ^[59], Summers boasted about the Clinton administrations’ negotiations of 240 new trade agreements, including NAFTA, and highlighted the World Trade Organization agreement on financial services in particular. This agreement committed countries to trade in the full range of financial products, including derivatives.

Views on Social Programs

Summers believes social assistance, unemployment insurance, and unions cause unemployment. Government assistance to the unemployed, in Summers’ view, provides both an incentive and the means for them not to work. He moderates these assertions by also saying that “It is, however, a great mistake (made by some conservative economists) to attribute most unemployment to government interventions in the economy or to any lack of desire to work on the part of the unemployed.” ^[60]^

Role in the Enron Crisis

When he was about to take office as Treasury Secretary, Summers received a congratulatory letter from Ken Lay, the President of Enron Corporation. The letter was addressed “Dear Larry”. In his response addressed to “Ken”, Summers promised: “I’ll keep my eye on power deregulation and energy-market infrastructure issues.” ^[61]^

During California’s energy crisis in 2000, Summers rejected the idea that energy companies like Enron were manipulating the market and gouging consumers. He opposed Governor Gray Davis’ plan for governments to intervene with price controls, claiming “This is classic supply and demand. The only way to fix this is ultimately by allowing retail prices to go wherever they have to go.” Summers also encouraged energy executives to compromise for the sake of preserving the potential for energy deregulation in other states. ^[62]^

Summers has been criticized for allowing the “Enron Loophole” to be included in the Commodity Futures Modernization Act, a loophole that ensured the Commodity Futures Trading Commission could not regulate energy trading. In its review of original correspondence between Enron and Summers, Public Citizen has concluded Summers responses “marked a departure from previous Working Group consensus and indicated a sea change in the Clinton administration’s policy, suggesting the administration would not oppose Enron in its pursuit of legislation to further deregulate the energy trading business.” Public Citizen connected the Enron Loophole with the crisis California subsequently suffered: “Following passage of the Commodity Futures Modernization Act of 2000, sponsored by Gramm and not opposed by the Clinton administration, Enron and other energy traders were allowed to operate unregulated power auctions that greatly enhanced their ability to manipulate deregulated electricity and natural gas markets.” ^[63]^

Role in International Crises

As Undersecretary in the Treasury Department in the early 1990’s, Summers pressured Russia to institute rapid privatization and liberalization. He suggested that multilateral support, which would include IMF funds, would be withdrawn if these changes were not made fast enough. Reviewing the impacts of these prescriptions, Naomi Klein has written in The Shock Doctrine about the corrupt enrichment of oligarchs and the impoverishment of the general populace. Sharp rises in alcoholism, suicides, homicides, and homelessness resulted from what Klein describes as the “planned misery” Summers and others forced on Russia. ^[64]^

Summers worked to strengthen the ability of the IMF to enforce neo-liberal policies on foreign countries. In his analysis of US influence on foreign countries’ economic policies, Edward Luce has written: “Led by Robert Rubin and Lawrence Summers, Mr Clinton’s economic team spent the decade adding heft to the International Monetary Fund’s often intrusive attempts to restructure exposed economies - from Mexico in 1994 to the victims of the Asian flu crisis in 1997. These countries had strayed from the orthodoxies of the Washington consensus and were required to don the hairshirt in recompense.” ^[65]^ In the South Asian financial crisis of the late 1990’s, Summers was the Treasury official sent to block efforts by Japan and other Asian countries to create a fund for a bailout. Korea, Indonesia, and Thailand were forced to deal with the IMF and conform with its policy directives to cut public spending, privatize, and open their economies to foreign companies. According to Mark Weisbrot, “The orders from Washington were clear: any bailout would have to go through the IMF, with results that turned out to be an economic and human disaster. ^[66]^ Former IMF economist Simon Johnson remembers having “the IMF in one room and the South Koreans in another, but Larry Summers was the guy dictating the conditions from a third.” ^[67]^

Harvard

Summers became President of Harvard University in 2001 and resigned under pressure in 2006. While the Weekly Standard named Summers its "favorite university president"^[68] his term as president was associated with a number of controversies, including: - Derivative losses. Summers had advocated that the university lock in interest rates because he believed they would rise – a prediction that proved wrong. ^[69]^The university lost money on derivatives it bought based on wrong interest rate bets. Summers’ has been faulted for having allowed this to happen while he was Harvard’s president, while others deny that he should be considered responsible for the losses. ^[70]^ - Views on women. In 2005, Summers gave a speech speculating that the reason why women were underrepresented as tenured engineering and science professors was due to their unwillingness to work the long hours required, and “issues of intrinsic aptitude, and particularly of the variability of aptitude”. He argued that “socialization and continuing discrimination” were “lesser factors.” ^[71]^ - Support for Reserve Officers’ Training Corps (ROTC) at Harvard. Summers made a special effort to encourage the ROTC presence at Harvard. According to the campus newspaper, Summers “broke with precedent and spoke at the annual ROTC ceremony every year during his presidency in an effort to show support for students in the program and for expanded military access to the campus. ^[72]^ - Harvard payment to settle case of Summers’ close friend, Professor Andrei Shleifer. Harvard paid $26.5 million to settle a suit after “a U.S. district court found Shleifer liable for conspiracy to defraud the U.S. government, and concluded that Harvard had breached its contract with the government.” Shleifer and his wife had invested in Russia at the same time that they were on contract with the government’s Agency for International Development, resulting in a conflict of interest. Faculty members were critical of the payment Harvard made to settle the case and the lack of disciplinary action taken against Shleifer. One professor said at a meeting with Summers “The outcome of the tawdry Shleifer affair...would have been unthinkable—unthinkable—during the last two presidencies, but is all too characteristic of the present malaise.” ^[73]^

Tobacco

Larry Summers is mentioned in the tobacco-related research library.

This article may include information from Tobacco Documents Online.

Background info

Summers was born November 30, 1954 in New Haven, Connecticut, and grew up in suburbs of Philadelphia, Pennsylvania.

He received a Bachelor of Science degree from the Massachusetts Institute of Technology and a PHD from Harvard. He worked in 1982 as part of President Reagan’s Council of Economic Advisers, and then returned to Harvard to teach.

In 1991, he took the position of vice president of development economics and chief economist of the World Bank.

From 1993 to 2001 he worked at the Treasury Department. In 1993, he was named as undersecretary of the treasury for international affairs. In 1995 he was promoted to deputy secretary of the treasury.

July 1999 - Confirmed as Secretary of the Treasury. (His signature appeared on U.S. paper currency as a result of holding this job.)

July, 2001 - Became president of Harvard University. He resigned in 2006 following a no-confidence vote by Harvard faculty.

Before he became Director of the National Economic Council in 2008, he taught at Harvard and worked as a part-time managing director at the hedge fund, D.E. Shaw. ^[74]^

Previous Affiliations

• Director, Teach for America
• Member, Global Development Program Advisory Panel, Gates Foundation ^[75]^
• Policy Board (Chair), Harvard AIDS Institute ^[76]^

• Board of the Brookings Institution
• Board of the Center on Global Development
• Board of the Institute for International Economics,
• Board of the Global Fund for Children’s Vaccines
• Board of the Partnership for Public Service.
• Member of the Council on Foreign Relations,
• Member of the Trilateral Commission
• Member of the Bretton Woods Committee
• Member of the Council on Competitiveness
• Member of the UNCTAD Panel of Eminent Persons. ^[77]^
• Board of Governors, Eli and Edythe L. Broad Foundation ^[78]^

Contact details

Articles & resources

Related Sourcewatch articles

References

1. ↑ News release, President –Elect Barack Obama[1], November 24, 2008.
2. ↑ Department of the Treasury – History
3. ↑ Remarks by Treasury Secretary Lawrence Summers to the Securities Industry Association, November 9, 2000.
4. ↑ Remarks by Treasury Secretary Lawrence Summers to the Haas School of Business, University of California, Berkeley, December 6, 2000.
5. ↑ Dean Baker, “Summers at Treasury: What Would We Tell the Children?”, “The Huffington Post”, November 7, 2008.
6. ↑ Statement by Treasury Secretary Lawrence H. Summers, Office of Public Affairs, Treasury Department, October 22, 1999.
7. ↑ Robert Weissman and Harry Rosenfeld, “Sold Out: How Wall Street and Washington Betrayed America,” Wall Street Watch, March 2009, p. 17.
8. ↑ Arianna Huffington, “Larry Summers: Brilliant Mind, Toxic Ideas”, Huffington Post, March 25, 2009.]
9. ↑ Statement by Treasury Secretary Lawrency H. Summers Office of Public Affairs, Treasury Department, November 4, 1999.
10. ↑ ”10 Years Later, Looking at Repeal of Glass-Steagall”, New York Times, November 12, 2009.
11. ↑ Statement by Treasury Secretary Lawrence H. Summers,[2] Office of Public Affairs, Treasury Department, October 22, 1999.
12. ↑ Lawrence H. Summers, "Toward a 21st Century Financial Regulatory System”, Office of Public Affairs, Treasury Department, October 5, 1999.
13. ↑ Lawrence H. Summers, "Toward a 21st Century Financial Regulatory System”, Office of Public Affairs, Treasury Department, October 5, 1999.
14. ↑ Congressional Oversight Panel, “Special Report on Regulatory Reform”, January 2009, p.20.
15. ↑ [[3]]
16. ↑ Lawrence Summers, Testimony before the Joint Senate Committees on Agriculture, Nutrition, and Forestry and Banking, Housing and Urban Affairs, June 21, 2000.
17. ↑ [4]
18. ↑ Frank Partnoy, F.I.A.S.C.O – Blood in the Water on Wall Street, 2009, pps. 267-268.
19. ↑ PBS Transcript,“The Warning”, October 20, 2009.
20. ↑ [5]
21. ↑ PBS, Transcript of [ http://www.pbs.org/wgbh/pages/frontline/warning/etc/script.html “The Warning”], October 20, 2009.
22. ↑ Lawrence Summers, Treasury Deputy Secretary, “Testimony before the Senate Committee on Agriculture, Nutrition, and Forestry on the CFTC Concept Release”, Treasury Department, July 30, 1998.
23. ↑ Lawrence Summers, Treasury Deputy Secretary, “Testimony before the Senate Committee on Agriculture, Nutrition, and Forestry on the CFTC Concept Release”, Treasury Department, July 30, 1998.
24. ↑ Steve Korris, ”Official Tried in Vain to Avert Wall Street Catastrophe.”, The Madison-St. Clair Record, March 27, 2009
25. ↑ Frank Partnoy, F.I.A.S.C.O – Blood in the Water on Wall Street, 2009, p. 164.
26. ↑ PBS, Transcript of [ http://www.pbs.org/wgbh/pages/frontline/warning/etc/script.html “The Warning”], October 20, 2009.
27. ↑ Interview with Brooksley Born, Transcript, PBS, October 20, 2009.
28. ↑ US Treasury Department, “Statement by Treasury Secretary Lawrence H. Summers”, December 14, 2000.
29. ↑ President’s Working Group on Financial Markets,” Over-the-Counter Derivatives Markets and the Commodity Exchange Act”, November 1999.
30. ↑ Bloomberg News, “Harvard Losing AAA Benefit in Market Shows Swap Risk”, March 3, 2009.
31. ↑ President’s Working Group on Financial Markets, ”Over-the-Counter Derivatives Markets and the Commodity Exchange Act” November 1999.
32. ↑ Lawrence Summers, Remarks to the Coalition of Service Industries and Congressional Economic Leadership Institute, Washington, DC., August 12, 1997.
33. ↑ [“Times Topics - People - Summers, Lawrence H.”, New York Times. Accessed March 20, 2010.
34. ↑ Lawrence Summers, “Rescuing and Rebuilding the US Economy: A Progress Report”, Speech to the Peterson Institute for International Economics, July 17, 2009.
35. ↑ Paul Krugman, “Stimulus arithmetic (wonkish but important)”, New York Times, January 6, 2009.
36. ↑ Louise Story, “A Rich Education for Summers (After Harvard)”, New York Times, April 5, 2009.
37. ↑ Philip Rucker and Joe Stephens, “Top Economics Aide Discloses Income”, The Washington Post, April 4, 2009.
38. ↑ Louise Story, “A Rich Education for Summers (After Harvard)”, New York Times, April 5, 2009.
39. ↑ Louise Story, “A Rich Education for Summers (After Harvard)”, New York Times, April 5, 2009.
40. ↑ Philip Rucker and Joe Stephens, “Top Economics Aide Discloses Income”, Washington Post, April 4, 2009.
41. ↑ Remarks by Treasury Secretary Lawrence Summers to the Securities Industry Association, November 9, 2000.
42. ↑ Lawrence Summers, Remarks to the Coalition of Service Industries and Congressional Economic Leadership Institute, Washington, DC., August 12, 1997.
43. ↑ Remarks by Treasury Secretary Lawrence Summers to the Securities Industry Association, November 9, 2000.
44. ↑ [ http://www.treas.gov/press/releases/ls922.htm Remarks by Treasury Secretary Lawrence Summers to the Kennedy School of Government], September 27, 2000.
45. ↑ Ryan Lizza, [http://www.newyorker.com/reporting/2009/10/12/091012fa_fact_lizza?currentPage=all “Inside the Crisis: Larry Summers and the White House Economic Team”], The New Yorker, October 12, 2009.
46. ↑ [ http://www.ustreas.gov/press/releases/ls1005.htm Remarks by Treasury Secretary Lawrence Summers to the Securities Industry Association], November 9, 2000.
47. ↑ Ryan Lizza,“Inside the Crisis Larry Summers and the White House Economic Team”
48. ↑ Lawrence Summers, “The United States and China at the Dawn of a New Century”, Remarks to the Asia Society Annual Dinner, October 12, 1999.
49. ↑ Lawrence Summers, Remarks to the Coalition of Service Industries and Congressional Economic Leadership Institute, Washington, DC., August 12, 1997.
50. ↑ Warren Buffett, Berkshire Hathaway Annual Report for 2002
51. ↑ Remarks by Treasury Secretary Lawrence Summers to the Securities Industry Association, November 9, 2000.
52. ↑ Dan Fromkin,"Stop Robert Rubin Before He Kills Again,", "Huffington Post," April 30, 2010.
53. ↑ Id.
54. ↑ Id.
55. ↑ Shahien Nasiripour, "Larry Summers Defends Megabanks, Says Too Many Small Banks Make U.S. Less Stable,", "Huffington Post," April 23, 2010.
56. ↑ Harry L. Freeman, “The Role of Constituents in U.S. Policy Development Toward Trade in Financial Services”, Chapter 10, in Constituent Interests and U.S. Trade Policies by Alan V. Deardorff, Robert Mitchell Stern, 1998, p. 184.
57. ↑ Lawrence Summers, Remarks to the Coalition of Service Industries and Congressional Economic Leadership Institute, Washington, DC., August 12, 1997.
58. ↑ Lawrence Summers, “The Case for American Support for Open Markets”, Remarks to the U.S. Chamber of Commerce, Washington, DC, November 10, 1999.
59. ↑ Lawrence Summers, “Issues for the Financial Services Industry in 1999”, Remarks to Property-Casualty Insurers Industry Forum New York, NY, January 13, 1999.
60. ↑ Lawrence Summers, “Unemployment”, The Concise Encyclopedia of Economics, accessed March 15, 2010.
61. ↑ Associated Press, “Ex-Treasury Chief Told Lay He’d Watch Key Issues”, March 8, 2002
62. ↑ Kurt Eichenwald, Conspiracy of Fools: A True Story, December 2005, pps. 403 and 411.
63. ↑ Public Citizen News Release, “Recently Released Treasury Documents Chronicle Enron’s Influence in Washington”, April 28, 2003.
64. ↑ Naomi Klein, The Shock Doctrine- the Rise of Disaster Capitalism, pps. 262-294.
65. ↑ Edward Luce, “Self-doubt tarnishes Brand America,” Financial Times, December 29, 2009.
66. ↑ Mark Weisbrot, “Globalization on the Ropes”, Harper's Magazine, May 2000.
67. ↑ Edward Luce, “Self-doubt tarnishes Brand America,” Financial Times, December 29, 2009.
68. ↑ James Traub, “Harvard Radical”, The New York Times, August 24, 2003.
69. ↑ Geraldine Fabrikant, “Endowment Director Is on Harvard’s Hot Seat,” [[6]](http://www.nytimes.com/2009/02/21/business/economy/21harvard.html?_r=1&pagewanted=all "http://www.nytimes.com/2009/02/21/business/economy/21harvard.html?_r=1&pagewanted=all") The New York Times, February 20, 2009.
70. ↑ Felix Salmon, “Annals of rank hubris, Larry Summers edition, [7] Reuters, July 22, 2009.
71. ↑ Lawrence Summers, “Remarks at NBER Conference on Diversifying the Science & Engineering Workforce,” January 14, 2005.
72. ↑ “After Harvard Leaders' Absence, ROTC Supporters Fear Return to Icy Relations,” [8] June 22, 2007.
73. ↑ “’Tawdry Shleifer Affair’ Stokes Faculty Anger Toward Summers,” [9], The Crimson, February 10, 2006.
74. ↑ Lawrence H. Summers, “Biography,” [10] accessed March 26, 2010.
75. ↑ Program Advisory Panels Announced by the Bill & Melinda Gates Foundation, Bill & Melinda Gates Foundation, accessed December 9, 2007.
76. ↑ Policy Board, Harvard Aids Institute, accessed October 13, 2008.
77. ↑ Lawrence H. Summers, “Biography”, Harvard, accessed March 26, 2010.
78. ↑ 2009/10 Annual Report, Eli and Edythe L. Broad Foundation, accessed 4 February 2011.

External resources

• "Biography: Lawrence H. Summers", undated, accessed September 2004.

• Lawrence Summers speeches as Treasury Secretary

• Ryan Lizza, “Inside the Crisis Larry Summers and the White House Economic Team”, The New Yorker, October 12, 2009.

• Arianna Huffington, “Larry Summers: Brilliant Mind, Toxic Ideas”, Huffington Post, March 25, 2009

Categories: Real Economy Project | Tobaccowiki | Economists | Economists: Conflict of Interest | Tobacco documents biographies

http://www.sourcewatch.org/index.php?title=Larry_Summers