Felix Salmon: Larry Summers Continues To Deny His Role In The Financial Crisis

Reuters.com:

In mid-2009, I went on a search for apologies, from the people who laid the intellectual and regulatory foundations for the financial crisis. I wondered whether and when Larry Summers, in particular, would apologize for what he did at Treasury, and I was heartened when Bill Clinton came out and said that, with hindsight, he was wrong about derivatives regulation.

Read the whole story: Reuters.com

Comments

[Linda from Deerfield]

10:07 PM on 01/27/2012

That was a valiant effort, greatly appreciated. I really thought that I had seen a couple of hints of humility from Summers, certainly not from Rubin, but this settles it -- he is a small man, not a leader.

I was just treated somewhat rudely, elsewhere, for suggesting that the head of a corporation might not have the smartest outlook in the context being discussed -- the excuse that was offered was that the man was clearly a successful person, probably more successful than me. If money and visibility is the measure of success, then Larry Summers is more successful than most of us, but I think that those of us who have a head on our shoulders and thoughtfully ponder the past and future of this nation owe it to others to try to be brave enough to challenge with clarity of thinking the apparently successful person if something seems wrong with their presumptions or their motivations or the system that granted them their success.

I am thus doubly grateful to the reporters who have tried to challenge Mr. Summers.

[Janzee12000]

09:27 PM on 01/27/2012

I'm sure if they wanted they could of devoted the whole documentary on just what a loathesome individual you really are and not just a componenet of a complete failure...

[VPerry24]

12:38 PM on 01/27/2012

Larry, did you or did you not advise President Clinton to use the pension funds and invest them elsewhere? It is not just "inside job" that is pointing out your selfish and greedy behavior.

[littlepuffycloud]

12:26 PM on 01/27/2012

The Winklevosses were right about the phat shiece of pit that is Larry Summers..

[andyou]

11:47 AM on 01/27/2012

If he were man enough to apologize, he already would have done so. Obviously, he lacks the insight or character.

[judow]

02:02 PM on 01/27/2012

sociopaths believe they're above any wrongdoing, Washington DC is the sociopath capitol of the world

[muck-raker]

10:56 AM on 01/27/2012

But Greenspan was insistent, she said.

Finally, he said, "Well, Brooksley, I guess you and I will never agree about fraud." (Greenspan did not respond to requests for comment. Daniel Waldman and Michael Greenberger, both top aides of Born's, were briefed on the lunch at the time and independently confirmed Born's recollection of the conversation.)

That was just the beginning. By early 1998, Born had also tangled with Treasury Secretary Robert Rubin, his deputy, Summers, and Securities and Exchange Commission head Arthur Levitt, not to mention members of Congress, financial industry heavyweights and business columnists. She wanted to release a "concept paper" -- essentially a set of questions -- that explored whether there should be regulation of over-the-counter derivatives. (Derivatives are so-named because they derive their value from something else, such as currency or bond rates.)

They warned that if she did so, the market would implode and predicted tidal waves of lawsuits. On top of that, Rubin told her, she didn't have legal authority to regulate the derivatives anyway. And last SUMMERS told Born I HAVE 13 BANKERS in my office and they all say you are going to create a major depression because you want to regulate.

[catbite]

10:40 AM on 01/27/2012

With an ego like Summers has, you can't expect him to confess to anything. We knew that Obama had to hire the very people who took down the system, in order to understand what they did and how we can fix it. Unfortunately, Obama's decision of harboring crooks and not prosecuting others has not put stability in the system. We are more divided, more corrupt and banks are bigger and more unregulated than ever. Go watch "Inside Job" because it will infuriate you. There has to be a way to stop government treasury employees, lobbyists and bankers from witching sides. That's why it's an inside job.

[VPerry24]

12:40 PM on 01/27/2012

..and then read the book "RETIREMENT HEIST" and get really, really angry. T'was Larry Summers, Reich and Rubin who advised Clinton to use the pension fund money, and that is why everything is broken now.

[judow]

02:11 PM on 01/27/2012

"We knew that Obama had to..." Really, he has you that convinced? Obama is as big a crook as the rest of his predecessors R & D alike, that's how he got the " inside job". read "Creature from Jekyll Island" it'll help you understand what has to be done to "stop government..."

[Vinkaye]

10:16 AM on 01/27/2012

When I voted for President Obama, I was under no false impressions that he was either a liberal or a savior, I simply thought him far better than the GOP alternative. I hoped maybe he would be bolder than he was in the Senate or on the campaign trail, since the country faced such a perfect storm. Disappointment on that front, I could have handled, since I still think he's probably a fine person, and I'd hoped he would do well. However, to me, the most egregious thing that President Obama has done, and continues to do... is his reliance on Summers and Geithner for his financial perspective. Still after 3 years, he still doesn't see the problem with these two. He still is looking to have Summers head up the World Bank. To me, this decision, to have this philosophy as the crux of his fiscal policy, has defined his Presidency. It is also a central issue that was entirely under the President's control, it required no bi-partisanship or super majority. President Obama was free to decide the components of his financial team. Not only did he choose poorly, but he continues to support them in the face of their complete failure to stem the crisis. He has watched them make our financial system worse, and he still cheers their efforts.

[muck-raker]

11:05 AM on 01/27/2012

I must agree with you but I will, again vote for our Prez again only because the alternative is to ugly to comprehend...

[mater]

11:12 AM on 01/27/2012

That is very pragmatic and brave. Weighing the priorities for ourselves personally, as well as nationally, makes me come to the very same conclusion. Changing out Geitner and Mrs. Clinton, among others, may refresh and invigorate the Administration next time. And, hopefully, enough of a Congressional FLIP will occur to make The President's ability to get some reform accomplished less adversarial.

[VPerry24]

12:40 PM on 01/27/2012

Ron Paul for me. He is in it heart and soul.

[OldTulsan]

09:21 AM on 01/27/2012

This memo shows what Mr. Summers is made of...

http://www.whirledbank.org/ourwords/summers.html
Our Words: The Lawrence Summers Memo

"DATE: December 12, 1991
TO: Distribution
FR: Lawrence H. Summers
Subject: GEP

'Dirty' Industries: Just between you and me, shouldn't the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Less Developed Countries]? I can think of three reasons:

1) The measurements of the costs of health impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.

2) The costs of pollution are likely to be non-linear as the initial increments of pollution probably have very low cost. I've always though that under-populated countries in Africa are vastly UNDER-polluted, their air quality is probably vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste.."