Mike the Mad Biologist

Why Is Larry Summers Indispensable?

There’s been a lot of discussion over Obama economic advisor Larry Summers’ economic ties to Wall Street (7.2 million such ties in 2008 alone). What I don’t get is why Obama sees the need to keep him around.

Yes, Summers is an asshole. He was an asshole at Harvard, and I don’t see why he would have changed. Yes, he’s a corrupt asshole, but we already knew he was getting paid millions by a hedge fund. But what I don’t get why Obama considers him to be essential. Consider these speaking fees:

GIANT BAILOUT SECTOR
Goldman Sachs: $202,500 (two speeches)
Citigroup: $99,000 (two speeches)
JP Morgan: $67,500
Merrill Lynch: $45,000 (donated to charity)

DOMESTIC FINANCIAL SECTOR
Investec Bank: $157,500
State Street Corporation: $112,500
Pricewaterhouse Coopers LLC: $67,500
Lehman Brothers: $67,500
American Express: $67,500
Siguler Guff & Company (private equity): $67,500
TA Associates (private equity): $67,500
Charles River Ventures (Venture Capital): $67,500

FOREIGN FINANCIAL SECTOR
Skagen Funds (Scandinavian mutual fund): $180,000 (three speeches)
Centro de Liderazgo y Gestion (the Center for Leadership and Management, in Colombia): $112,500
Association of Mexican Bankers: $90,000

OTHER
Securities Industry & Financial Markets Association: $33,750
Pension Real Estate Association: $67,500
Hudson Institute: $10,000

Glenn Greenwald is absolutely right when he refers to this as an “advanced bribe.” It’s testimony to Summers’ arrogance that, knowing either Democrat would tap him for an important position, he took the money anyway–he just doesn’t give a shit.

But why is Summers essential? I’m sure he’s a bright guy–a very bright guy. But there are other economists who have endorsed the administration’s plan: Brad DeLong comes to mind. Maybe they’re fools, maybe they’re not (I hope not, since we’re stuck with this policy). Unlike Summers, they do not suffer from massive conflicts-of-interest. Maybe Summers has evil Dark Side of the Force Jedi mind powers.

It’s absolutely puzzling.

Comments

  1. #1 llewelly
    April 9, 2009

    The alternatives to Summers will not try nearly as hard to preserve the grossly over-valued finance industry.

  2. #2 iRobot
    April 10, 2009

    This is 1 of my 2 main disappointments about Obamma’s tenure so far. He does not seem willing to touch the financial industries structure. He also is too close to W on war and security policies, re: state secrets privilege. Oh well, no one’s perfect. We just have to try and put pressure on Washington to get rid of the banksters power and Summers.

  3. #3 D
    April 10, 2009

    Brad DeLong? Summers is smarter than that man could hope to be. Corruption (if any…all you demonstrate are speaking fees) or prickishness don’t imply diminished ability. There aren’t that many people who’ve won one of these or made tenure at Harvard before the age of thirty. Also, unlike many academic economists he’s got large amounts of real world experience. What’s your positive argument for why he shouldn’t be there?