Larry Summers may be off the short list for Treasury!
November 13, 2008
by Violet Socks, Editor
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“Intense backlash from women’s groups may have pushed former Clinton Treasury Secretary Larry Summers off the short-list to lead Treasury for President-elect Barack Obama,” the Politico is reporting tonight.
The New Agenda is front and center in the story:
The New Agenda, a non-partisan women rights’ group founded by former supporters of Sen. Hillary Rodham Clinton (D-N.Y.), criticized the potential for a Summers’ appointment in a press Nov. 6 press release that declared his “record of derogatory comments aimed at women ensures that his selection would be divisive and thus distract from efforts to fix the economy.”
The group has launched an e-mail campaign that has members across the country urging key transition team officials to dump Summers, said co-founder Amy Siskind. Members with connections to Obama’s campaign – about a third supported him in the general election – and other Democratic ties are sending the message as well.
“We are voicing it from all means that we can,” Siskind said. “We’re in a real mess here in the financial world … This is not the time to bring in a distraction.”
“We just want the best Treasury secretary at this moment in time,” said Nancy Hopkins, a New Agenda member and biologist at Massachusetts Institute of Technology, who walked out of the talk where Summers made the infamous comments.
Not only does Summers statement raise serious questions about his judgment, Hopkins said, but he also displayed an inability to listen throughout his tenure as Harvard’s president. Female faculty members had tried for some time to draw his attention to the dwindling numbers of women being hired and tenured under his watch.
“He couldn’t hear them,” Hopkins said.
He also did a poor job of running the university, she said. “He couldn’t run Harvard… [I]t came to a grinding halt.”
This is terrific news, and I’ve got my fingers crossed ol’ Larry really has been scrubbed.
Thanks to everyone who pitched in with our effort, and to the other women’s groups who also spoke out. Go, us!
I received this tonight. I’m sure many of you have it, or have read it.
Keep Larry Summers as Far as Possible from the U.S. Treasury
By Mark Ames, TheNation.com. Posted November 12, 2008.
In light of all of the corruption and cronyism that have marked the career of Lawrence Summers, why is Obama considering him for treasury secretary?
We all know in the backs of our minds that Barack Obama’s incredible victory will eventually be followed by disappointment. But does it have to come so soon, and hit so hard? The answer will be yes, if Lawrence Summers is named treasury secretary in the president-elect’s cabinet, as many observers believe will be the case. Summers was one of the key architects of our financial crisis — hiring him to fix the economy makes as much sense as appointing Paul Wolfowitz to oversee the Iraq withdrawal. And when you look at the trail of economic destruction Summers left behind in other crisis-stricken countries who sought his advice in the past, then “terror” might be a more appropriate word than “disappointment.”
The conventional wisdom is that Summers is the “centrist” choice — Fareed Zakaria (“I think Summers is an extraordinarily brilliant guy”) and David Gergen (“Larry Summers would be superb at this job”), two titans of centrism, both weighed in Sunday on the Stephanopoulos show in favor of Summers. And yet so far the debate over Summers has been largely confined to two outrageous moments in his career: his 1991 World Bank memo calling Africa “UNDER-polluted,” and his more recent declarations, while serving as president of Harvard, about women’s genetic inferiority in math and science. By themselves, these two incidents might be dismissed as merely provocative in a maverick-moron sort of way, as many of Summers’ supporters argue; but in the context of Summers’s track record, in which he oversaw the destruction of entire economies and covered up cronyism and corruption, his Africa memo and sexist declarations aren’t exceptions but rather part of a disturbing pattern.
From the start, Summers has been on the wrong side of Obama’s supporters. In 1982, while still a graduate student at Harvard, Summers was brought to Washington by his dissertation advisor Martin Feldstein, the supply-side economist, to serve on Ronald Reagan’s Council of Economic Advisors. Those first years in the Reagan administration were crucial in the right-wing war against New Deal regulation of the banking system and financial markets — a war that Reagan’s team won, and that we’re all paying for today. Although Summers eventually identified himself with the Democratic Party — albeit the right wing of that party — nevertheless, as the New York Times’s Peter T. Kilborn wrote in 1988:
He worked for 10 months as a top analyst in President Reagan’s Council of Economic Advisers when his mentor, Martin S. Feldstein, was running it, and his colleagues don’t recall him venting anti-Reagan heresies then ….
“One of the ironies of this business is that Summers’s economics are quite close to Feldstein’s,” said William A. Niskanen, who was a member of the Feldstein council.
It’s ironic if you expected Summers to be a liberal Democrat — but par for the course in the context of Summers’s real record. Some fifteen years after Summers’s stint in the Reaganomics war room, he reappears as one of the key villains fighting to suppress the regulatory efforts of a top
official, Brooksley Born, who was trying to call attention to the dangers of the unregulated derivatives, such as credit swap defaults, which today are considered the key to the current economic crisis.
But let’s return to the Summers timeline. After his stint in the Reaganomics brain trust, he returned to Harvard to serve as one of the university’s youngest professors. In 1988, he was Michael Dukakis’s chief economic advisor, but when that campaign failed to bring Summers to power, he turned to America’s great rival, the former Soviet Union, to try out his economic experiments. In 1990, Lithuania, a restive Soviet republic seeking independence, hired Summers to advise on that country’s economic transformation. Poor Lithuania had no idea what it got itself into. This was Summers’s first opportunity to tackle a country in economic crisis and put his wunderkind theories into practice. The results were literally suicidal: in 1990, when Summers first arrived, Lithuania’s suicide rate was 26.1 per 100,000 and falling. Just five years after Summers got his hands on Lithuania’s economy, life became so unbearable under the economic transition that the suicide rate nearly doubled to 45.6 per 100,000, worse than any other ex-Soviet republic in transition. In fact, it was the highest suicide rate in the world, suggesting something particularly harsh and brutal about the economic transition in that country as opposed to the others, where suffering and pain were common. Things got so bad that in 1992, after just two years of Summers-nomics, the traumatized Lithuanians voted the communist party back into power, the first East European nation to do so — even though just a year earlier Lithuanians actually died on the streets fighting communism.
Fresh off his success in Lithuania, Summers moved to the World Bank, where he was named the chief economist in 1991, the year he issued his famous let’s-pollute-Africa memo. It was also the year that Summers, and his Harvard protg Andrei Schleifer (who worked with Summers on the Lithuania economic transformation), began their catastrophic “rescue” of Russia’s crisis-ridden economy. It’s a complicated story involving corruption, cronyism and economic devastation. But by the end of the 1990s, Russia’s GDP had collapsed by more than 60 percent, its population was suffering the worst death-to-birth ratio of any industrialized nation in the twentieth century, and the financial markets that Summers and Schleifer helped create had collapsed in what was then the world’s biggest debt default ever. The result was the rise of Vladmir Putin and a national aversion to free markets and anything associated with Western liberalism.
But that’s not all. Summers, through Schleifer, was also tainted with some of that country’s corruption, which resulted in a US Justice Department lawsuit against Schleifer and others. While Schleifer was being paid by US taxpayers to advise the Russians on capital markets in the 1990s, his wife, Nancy Zimmerman, bought and traded Russian equities for a Boston hedge fund she ran — they even used Schleifer’s US taxpayer-funded offices to run Zimmerman’s Moscow-based hedge fund operations.
How close were Larry Summers and Andrei Schleifer? According to former Boston Globe economics correspondent David Warsh, Summers and Schleifer “were among each other’s best friends,” and Summers taught Schleifer “as an undergraduate, sent him on to MIT for his PhD, took him along on an advisory mission to Lithuania in 1990, and in 1991, shepherded his return to Harvard as full professor, where he was regarded, after Martin Feldstein and Summers, as the leader of the next generation.”
In 2000, the Justice Department sought $102 million in damages from Schleifer, one of Schleifer’s Harvard associates and Harvard University in a conflict-of-interest suit resulting from Schleifer’s role as the lead US adviser to Russia’s economic reforms — questioning the way Schleifer and his wife profited from his position. Schleifer’s Harvard team in Moscow was funded by USAID in a no-bid contract, and supported by Summers as soon as he moved into the Treasury Department in 1993. So Schleifer benefited from his relationship with Summers twice: first, by getting a choice contract as the US government’s man in Moscow in the 1990s when Summers was in power in the US government, one that benefited his wife’s hedge fund (earlier this year, Portfolio suggested that the Schleifers’ hedge funds made them billionaires ). Then after Schleifer returned to Harvard to face the lawsuit, Summers, now president of Harvard, presided over a controversial settlement that all but let his protg off the hook. Thanks to pressure by Summers, Schleifer kept his chair at Harvard, where he continues to teach today.
Summers’s other favorite man in Russia was Anatoly Chubais — who consistently ranks at the top of Russia’s ” most hated man” polls. Chubais was executor of the Russian government’s privatization program, in which state companies worth tens of billions of dollars were handed over to insiders for a fraction of their worth in blatantly rigged auctions. Summers praised Chubais as a “demigod” and called Chubais and his free-market cohorts “the dream team.” In September 1998, after Russia’s capital markets collapsed, along with billions in US-taxpayer-backed loans, Chubais boasted to a Russian newspaper, “We swindled them.” By “them,” he meant the Western and American aid institutions that funded his reforms.
In light of all of the corruption, cronyism and devastation that have marked his career, Summers’ statements about an under-polluted Africa or intellectually-inferior women no longer seem like provocative eccentricities but part and parcel of the Summers shtick. And now there’s talk that President-elect Obama may hand the keys to national treasury to Summers — meaning that he’ll be in charge of overseeing a trillion-dollar taxpayer bailout of the entire financial industry, a process already rife with conflicts of interest, cronyism and corruption — as detailed by Naomi Klein.
The bailout, as currently implemented, threatens to devastate America’s economy much as Russia’s and Lithuania’s were devastated before. The idea that this is exactly the right time and place to put Larry Summers in charge of our economy’s future is so frightening that it makes the Sarah Palin vice presidential choice seem almost quaint by comparison. Let’s hope the rumors are wrong.
I am so glad that you have signaled out Larry Summers!
Keep it up! You have my support, and millions of others too.
Thank you for the update and the terrific commentary, “Keep Larry Summers as Far as Possible from the U.S. Treasury” by Mark Ames of TheNation.com. Good stuff.
However, our job is not done—not until a different Treasury Secretary and all other major positions have been filled. A lot of people are pushing for Larry Summers; he’s an aggressive guy and is maneuvering hard for himself. So, we need to keep the pressure on. Please continue to voice your thoughts on Larry Summers. We need to KEEP UP THE PRESSURE until all appointments are made. Here’s how you can help:
1. Email Valerie Jarrett, who is part of Obama’s Transition Team at vjarrett@barackobama.com to tell her what you think about Larry Summers as Treasury Secretary.
2. Leave a note on Obama’s transition website about your vision—NO to Larry Summers. There are two places you can leave your message:
http://www.change.gov/page/s/yourvision
http://www.change.gov/page/s/contact
3. You can also sign the Petitions to stop Barack Obama from considering Larry Summers for the Secretary of the Treasury post. The petitions will go to Obama’s Transition Team.
The Nation:
http://salsa.wiredforchange.co.....on_KEY=494
The Open Left:
http://action.openleft.com/page/petition/nosummers
This would be a GREAT TIME to contact The View’s producer, if they haven’t already contacted you Amy
Amy you take just the right tone. You are remarkable.
This sends a message loud and clear: don’t think you can jerk women around with impunity.
.
What is the point of the slap at Sarah Palin at the end of this article? I find the description of her as the VP choice as “quaint” very condescending?
“The idea that this is exactly the right time and place to put Larry Summers in charge of our economy’s future is so frightening that it makes the Sarah Palin vice presidential choice seem almost quaint by comparison.”
great news. great work.
[...] The conventional wisdom is that Summers is the “centrist” choice — Fareed Zakaria (”I think Summers is an extraordinarily brilliant guy”) and David Gergen (”Larry Summers would be superb at this job”), two titans of centrism, …[Continue Reading] [...]
NYT reported last Saturday on Nancy Pelosi’s view on Larry Summers:
“Speaker Nancy Pelosi, through a spokesman, on Friday also praised Mr. Summers as “one of America’s leading economic minds” and “a valuable resource to House Democrats” as they have sought ways to address the economic crisis.”
*applause*
Awesome!!!!
I hope it shows people that sexist remarks CAN come back to bite them!
The point is they dismiss whatever women do. This should not go unnoticed, so though I saw that comment and just shook my head at it, I posted the article.
Elsewhere I saw someone say this possible position for Hillary would put her in the position of taking the fall for Iraq under Obama. Thoughts?
- another notch carved, another coup counted and with 52% of the electorate being women, why not? What’s with that stupid sexist remark made by Ames at the end of his piece re Sarah Palin? She manages a 6+ billion budget. That is not “quaint” Ames, it’s a hard reality of a competent woman executive doing what she was elected to do.
Wonderful, wonderful post! This is so exciting!
Keep up the excellent work!
Narcissists are only afraid of one thing, shame. So since the New Agenda has been getting media attention Obama wouldn’t want to risk feminist criticism of him actually becoming a MSM top story.
“.. it makes the Sarah Palin vice presidential choice seem almost quaint..”
Good catch, Cynthia. Very evolved viewpoint, huh? But I was thinking the other day, once something has taken hold in the American “narrative” it’s pretty much there to stay. Take the Al Gore “invented the internet” meme. Even after it’s been debunked, and people know he didn’t say that, the story is there forever, even if only as a joke.
Palin’s narratives are there, too. She’ll be forever linked with “seeing Russia from my backyard” even tho she didn’t say that.
So Mark Ames is using a lazy cheap shot to make his point, because the media narrative is there, that McCain “made a bad choice” that was fatal to his run. It’s not true, yet that’s the current spiel.
It’s not that Palin won’t be able to get past that with the public, as Gore did his own labels, it’s just that the media narrative is here to stay…even to the day Palin gets to make the narrative a parody of itself instead of her.
Thank you, thank you, Amy. And everyone who pushed to keep LS out of the Treasury position.
So how were Pelosi, Zakaria, and Gergen so wrong? So publically and blatantly wrong? Did they know the truth and endorsed Summers because the truth didn’t matter and something else was in play? Or perhaps economics isn’t their area of expertise? Do they know Summers was a party to further destruction of Lithuania and a further increase in the suicides in their country? Or was Lithuania just like a game of Monopoly gone wrong? And Pelosi is meeting with GM to explore an economic plan for them? Is Summers advising her? My god–poor Michigan. And all of those retired union workers whose health insurance GM wants to wriggle out of paying for?
I love that pix of LS above right. May print and frame.
He may be off the short list, but he is still on the short bus.
I am seriously worried that picking Summers for Treasury would cause another stock market crash.
Speaking of a media myth continuing after it has been debunked (or the facts have changed), here’s an interesting article from the Harvard Crimson about media spin on Larry Summers.
http://www.thecrimson.com/article.aspx?ref=506127
As a Clinton supporter, I’m still working on a fact site supporting Summers — who was the Clinton’s choice to clean up after Bush Sr, promoted by the Clintons from the beginning of the Clinton admin up to Treasury Secretary near the end. That’s three confirmation processes the Clintons supported him through.
It’s currently at
http://clintondems.com/2008/11.....ment-15856
I posted this elsewhere….
If this is an accurate record of Summers’ lecture I think it is quite clear what the man was saying. I will let you all decide for yourselves, but for me no amount of backpeddling and spinning after the fact will change my opinion.
http://www.president.harvard.e...../nber.html
I don’t feel I need anyone to interpret what he meant for me and I don’t care who endorsed him and who didn’t. I think we pay too much attention to that kind of thing instead of thinking for ourselves. I think he is at the very least a sexist and I read it for myself.
As a Clinton supporter, I’m concerned that painting Summers, their 90s choice) as some sort of monster is in effect accusing the Clintons also. Bill and Hillary vetted him and watched him learn Wahington diplomacy for almost a decade. If he were really ‘a sexist’, they’d have noticed such tendencies during the 90s while he served in their Treasury, and rejected him. Instead, they kept promoting him and defending him on other issues through three confirmation hearing processes (Undersecretary, then Deputy, finally Secretary).
I have enough confidence in Bill and Hillary’s judgement that I trust there is nothing seriously wrong with Summers. In fact the 90s Clinton Treasury appointees did a good job cleaning up from Bush Sr. Let’s get back as many of them as we can, in their old jobs, till they at least clean up from Bush Jr and prevent a financial disaster. Then judge whatever actions Summers takes now — instead of just some careless words from 2005. Once the financial crisis is over, Obama will probably be glad of any excuse to destroy an old Clinton person.
Let’s hope and pray that Summers is really out of the running for Secretary Treasury. Here’s why I think he should be OFF the list for our next Treasury Secretary.
Harvard alum Iris Mack, MBA/PhD requested a meeting with Larry Summers to express her concerns about how her Harvard Management Company (HMC) boss Jeff Larson used derivatives to manage an HMC portfolio. Larson eventually left HMC to start Sowood hedge fund with hundreds of millions of dollars of Harvard alums’ donations. Sowood was one of the first hedge funds to blow up during the subprime mortgage derivatives crisis.
Dr. Mack communicated with Summers’ office regarding such derviatives trades. Perhaps, she could have saved Harvard alums hundreds of millions of dollars if Summers had bothered to continue to hear her out before forcing her resignation. There is a wealth of information describing this derivatives whistleblowing case: correspondence between Dr. Mack and Summer’s office (emails, faxes, snail mail, phone records, etc.); legal documents; reports from FBI and DOJ interviews, etc.
Given all this, you have to wonder whether Summers was either too
(a) corrupt and wanted to coverup up something(s) at HMC.
(b) arrogant to think that Dr. Mack had anything of value to tell him about mathematical finance and derivatives. Please recall Summers’ comments about women and math. Also, please note that Dr. Mack has a doctorate in Applied Mathematics from Harvard and a Sloan Fellows MBA from London Business School.
(c) incompetent to understand what Dr. Mack was trying to warn him about regarding derivatives trades in HMC portfolios.
Did Summers try to silence Dr. Mack the way he, Rubin and Greenspan tried to silence Attorney Brooksley Born of the CFTC? Who knows what goes on in Summers’ head? Nevertheless, he seems like a dreadful choice for our nation’s next Treasury Secretary.
Agreed. It’s not over, til it’s over.
CNBC isn’t listing him as a likely contender anymore.
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