Is Larry Summers smart? Maybe, given that he became one of the youngest tenured professors at Harvard at age 28. But so what? If you're smart and sleazy the sleazy cancels out the smart when you're being considered for a job running America's central bank.
What is most baffling is President Obama's complete reversal when it comes to Summers' creds, given that Obama blamed Summers for the essential repeal of Glass-Steagall in the form of the Gramm-Leach-Bliley Act of 1999. This law was the major driver behind not only the collapse of Wall Street but the taxpayer bailout of the Too Big to Fail Banks. And then there's those pesky derivatives, the deregulation of which Summers defended, despite their role in bringing down financial markets in 2008. Summers has also collected $2.7 million in speaking fees from Wall Street firms that got bailout money and overall has amassed more than $17 million in consulting fees from financial firms, according to Bloomberg. In the same fashion that members of Congress should not take campaign contributions from industries they oversee, future Fed heads should not be compensated by them.
Summers not only enabled reckless financial policies as Treasury Secretary but mismanaged Harvard's finances while he was its President from 2001 to 2006. Summers approved a decision to invest $3.52 billion of its endowment in interest rate swaps which by late 2008 had lost over $1 billion, forcing Harvard to pay nearly half a billion dollars in termination fees and will likely pay another $425 million over a 30-40 year period.
And Summers not only has been the center of controversy over blatantly sexist comments about women's lack of scientific chops, which makes me dumbfounded that Obama would defend him. When at Harvard, Summers accused African America Studies department head Cornel West of "grade inflation" and called an album West produced as an "embarrassment" to the university.
And then there's the Summers speech suggesting that the under-representation of women in science and engineering could be due to a "different availability of aptitude at the high end." So I guess I should assume that my daughter, who is pursuing a doctorate in microbiology at Cornell-Weill Medical School, had a sex change operation that she didn't tell me about? His outrageous remark not only led to his resignation as President of Harvard but may have cost him his job as Treasury Secretary under Obama, according to the Independent. Hmmmm. (By the way, the source for this and other Summers content is, Wikipedia which is the most extraordinary research site on the Internet.)
Here's hoping that courageous Senators such as Elizabeth Warren, the inventor of the Consumer Financial Protection Bureau, continue their battle to ensure that Janet Yellen gets the job heading the Fed, given her excellent job history exclusively working either in academia or various Feds. But whatever the outcome, the president owes us an explanation, not to mention an apology, for his mind-boggling about-face. (Incredibly, when I tried to do a fact-check I learned that it's virtually impossible to get contact info for PR folks at the White House.)
If you agree that Obama owes us an explanation, please consider submitting your comments to the White House at this link.