Why Larry Summers Shouldn't Be Permitted to Run a Dog Pound, Much Less the Federal Reserve

[xchrom]

http://www.alternet.org/economy/larry-summers-federal-reserve



I’ve been gobsmacked to see that not only is Larry Summers on various short lists of candidates to become the next Fed chairman, but that Summers is also supposedly closing in on the favorite, Janet Yellen.

In early 2012, Summers was lobbying hard to become the head of the World Bank and didn’t get the nod. The fact that he is now under consideration for a bigger job should set alarm bells off. While Paul Krugman weighs in on both, concluding that Yellen would be the better pick, he’s still far kinder to Summers than the Harvard economist deserves.

The big problem with Summers is not his record on deregulation (although that’s bad enough) or his foot-in-mouth remarks about women in math, or for suggesting that African countries would make for good toxic waste dumps. No, it’s his appalling record the one time he was in a leadership position, as president of Harvard. Summers was unquestionably the worst leader in Harvard’s history.

Summers, unduly impressed with his own economic credentials, overruled two successive presidents of Harvard Management Corporation (the in-house fund management operation chock full of well qualified and paid money managers that invest the Harvard endowment). Not content to let the pros have all the fun, Summers insisted on gambling with the university’s operating funds, which are the monies that come in every year (tuition and board payments, government grants, the payments out of the endowment allotted to the annual budget). His risk-taking left the University with over $2 billion in losses and unwind costs and forced wide-spread budget cuts, even down to getting rid of hot breakfasts. The Boston Globe provided an overview:

[SamKnause]

1. Why he shouldn't be chosen.

He should not be chosen because he is a crook.

He will be chosen because the crooks that govern this country want him to be chosen.

The majority of people chosen, appointed, or anointed by President Obama are crooks.

[byeya]

6. + +

[Egalitarian Thug]

21. +2

[Enthusiast]

43. I bet he is the President's choice.

All that crook stuff, shit, they said all that about Nixon. Good mericans.

[rhett o rick]

47. I am beginning to believe that maybe the President doesnt have a choice.

I think we will agree that president Bush didnt have a clue what was going on. There was a cabal that made the decisions. When Obama was elected what happened to the cabal? I think the cabal included people like Gen Clapper, Comey, Mueller, Bernanke, McChrystal, Hegal, etc. Or some combination of them. Maybe the Carlyle Group is involved.

Theoretically Pres Obama could have fired them all and gathered his own group, but he didnt. So we have the same group running the country except for the President. Ms. Pritzker is probably new to the "Group".

[Enthusiast]

52. At this point, nothing would surprise me.

We may never know the full truth.

After all the complaining, that so many of us have done, I have to see the appointment of Pritzker as rubbing our nose in it.

There was a Republican guy on C-Span yesterday telling us how Dodd-Frank would be bad for business. I know what would be worse for business, throwing those criminal fucks into prison where they belong.

[rhett o rick]

54. Penny Pritzker the Democrats version of Mitt Romney.

But I knew at Rick Warren that something was very wrong. I figured he was deliberately antagonizing the left to win the right so he could win in 2012. But now he is a lame-duck and there is absolutely no excuse to be appointing conservative corporatists like Pritzker, Comey and Summers. Pres Obama is revealing his true ideology and in my book, it isnt Democratic.

[Enthusiast]

55. True identity?

And true ideology.

[AnotherMcIntosh]

2. With those credentials, it sounds like Obama is going to appoint him.

[madrchsod]

3. obama`s problem is he`s a horrible judge of character or....

he actually thinks the people he chooses are worthy of those positions. let`s face it he`s never going to pick anyone who is a true reformer.

[bigwillq]

4. K and R (nt)

[marmar]

5. I feel for that dog pound.

[octoberlib]

7. African countries would make for good toxic waste dumps?

I hadn't heard that one. Despicable.

• He has consistently argued for privatization and deregulation of the financial sector;

• He oversaw the repeal of Glass-Steagall via the passage of the Gramm-Leach-Bliley Act;

• He approved the (previously illegal) merger between Citibank and Travelers;

• He oversaw (and indeed encouraged) concentration in the financial sector, thinking bulked up banks are a virtue. This led to the rise of the TBTF institutions (formerly known as mega-banks);

• He successfully fought Brooksley Born, then chair of the Commodity Futures Trading Commission, to rein in financial derivatives;

• He oversaw passage of the Commodity Futures Modernization Act of 2000, preventing ALL Federal regulation of derivatives. The CFMA also exempted derivatives from state insurance oversight and antigambling laws;

• Thanks to Summers, derivatives still have no minimum reserve requirements, no disclosure obligations, no transparency and no exchange listing/reporting requirements. […]

http://www.dailykos.com/story/2013/07/23/1226062/-Open-thread-for-night-owls-Hasn-t-Summers-done-enough-damage-Why-not-Christina-Romer-for-the-Fed

[90-percent]

8. Obama

Obama is obligated to blindly obey the wishes of Goldman Sachs and the like.

OUR INSTITUTIONS ARE INFESTED WITH CORRUPT SOCIOPATHS

Amazing how the 1% got us in the 99% by the 'nads, isn't it?

Life liberty and the pursuit of happiness are just meaningless words on a stupid piece of paper.

Relatively speaking, I do still find Obama appealing. His nice speeches are really world class statesman-like and I sure hope a lot of democracy ideals within them do eventually take root to make America a place to be proud of again.

America's behavior on the world stage has reached the point where anything American should be banished from the polite society of the rest of the world.

-90% Jimmy

[byeya]

10. If it hasn't come to that, it's within spitting distance and that's more than sad - it's criminal or

whatever other synonym a person might choose.

[byeya]

9. The best reading I can get out of the floating of Summer for FED chief is that 0bama is softening

us up for someone lousy but not this off-the-wall Neo-Lib, Neo-Con, Mr. Failure, lousy. Janet Yellin may be the best we can hope for and if she's appointed we can say, "Hooray, it's not Larry Summers"

[forestpath]

11. That Obama likes a sexist pig like Summers and praises a racist pig like Kelly says it all.

[byeya]

14. When Bloomberg referred to the NYPD as "My army" nothing was heard from Kelly to remind the mayor

that it was a police force and not an armed body to be deployed at mayoral whim.

[forestpath]

17. The NYPD really is the armed guard of the 1%...no wonder Obama praised Kelly.

[Divernan]

12. Where are the defenders to put lipstick on this pig?

The OP has been up for 2 and 1/2 hours. It's nearly 10 a.m.! Their silence may well mean that O has already decided against Summers.

From Reuters:http://blogs.reuters.com/felix-salmon/2009/11/29/how-larry-summers-lost-harvard-18-billion/

Under Summers' rule, Harvard lost 27 percent of its $6 billion "cash" account.

Summers, amazingly, wanted to invest 100% of the university’s cash in the endowment, and had to be talked down to investing a mere 80%. No wonder Meyer and El-Erian tried to talk him out of it: the Harvard endowment was never designed as a place to invest sums of cash which might be needed immediately. Instead, it’s designed to invest for the very long term, taking advantage of the higher returns on illiquid investments.

Summers was playing a high-risk carry-trade game with Harvard’s cash:

[byeya]

13. The usual answer is that the script is in final draft; but, like you say, maybe Summers was

seen to be a very bad idea and is no longer considered for the post.

[Divernan]

15. Tells you how tightly controlled the whole bunch are

that not a single defender of the faith dares post independently.

[byeya]

16. Seems that way to me: They seem most comfotable when they clot.

[Divernan]

22. Love the term "clots". Clots of bots! or Bot-Clots.

[geek tragedy]

23. Why not call Obama supporters "vermin" or "monkeys" while you're

in dehumanizing mode?

Hate speech is not very progressive.

[Divernan]

28. To me "bots" is short for a group of robots.

And clots of bots would refer to a group in lockstep, or, as is defined in web usage, a program that operates as an agent for a user or another program or simulates a human activity.

I would never call an Obama supporter the terms YOU posted. I have read quotes where Nazis used those terms. So basically, you're likening me to a Nazi. I believe that is against the DU rules.

Shame on you! Trying to turn policy-based political comments into "racism" by introducing those objectionable terms and trying to tie them to someone who never used them. And you DARE to prattle on about hate speech?
Pretty desperate, aren't you? Why don't you dare to get back to the subject matter of this thread and attempt a thoughtful comment?
Nobody ever tells me what to post, and I assume no one ever tells you what to post either. In which case you are not a bot, are you? So why so defensive?

Everything is not always about YOU.

[geek tragedy]

29. "I never dehumanized Obama supporters. I just called them soulless robots."

The substance of this thread is that Larry Summers is a first rate assclown, and that's why no one's publicly arguing for him---not at DU, not anywhere.

The only substance you contributed was to baselessly insult a group of people. You were so hoping to get one sucker to argue for Summers, and when you didn't you invented a half-baked conspiracy theory wherein the only reason those inhuman, robotic Obama supporters don't support Summers is because their masters in the control room ordered them not to.

[Divernan]

31. You keep trying to put words in my mouth. Your latest is "soulless robots."

[geek tragedy]

32. Do robots have souls? nt

[Divernan]

33. Learn how to accurately use quotes, sweetie!

[geek tragedy]

26. No, that just shows how paranoid you are.

The way you have it set up, either:

A) Obama supporters defend a potential Summers pick, making them brainless apologists; or

B) Obama supporters don't defend a potential Summers pick, making them programmed brainless drones.

It doesn't occur to you that Obama supporters are human beings, and that sometimes they disagree with Obama, and that Larry Summers would be such an awful choice that no one is willing to endorse it.

Note, by the way, that virtually no one outside of DU is advocating for Summers either.

[Divernan]

30. Or C) Obama supporters actually speak up & criticize Obama's choice

This OP has been up since around 7 a.m. this morning, and your comment:
"Larry Summers would be such an awful choice that no one is willing to endorse it."
is the only one on this thread from a self-proclaimed Obama supporter, and it didn't show up until ELEVEN HOURS LATER. By contrast, the great majority of threads criticizing an Obama choice or action will get multiple Obama-supporting comments within minutes, and continue throughout the life of the thread.

[geek tragedy]

34. This is actually a good OP. I agree with it. But, writing "Larry Summers sucks"

gets old after a while. It's not a contested subject here.

[rhett o rick]

35. Here's how I see it. The "Obama supporters" as you call them never seem to post

in any thread about issues unless they are defending the President. Posts on the TPP, the XL Pipeline, fracking, Sen Warren issues, on and on, will be posted and have none, zero, zilch Obama supporters partaking in the discussions. I take that back I know of one or two that will. So it makes me wonder why they are here. IMO they do not meet the DU test of "politically liberal". They seem to be dedicated only to cheer leading.

You say that they (Obama supporters as you called them) have occasion to disagree with Obama. I have never, ever seen it. Most have told me that any disagreement with the Pres is enabling the right-wing. Which I find ironic because it is a right-wing tenancy to not accept critical discussion.

I always ask them if they support the Patriot Act, the TPP, the XL Pipeline, indefinite detention, Social Security cuts, etc. And they never have, not once, answered. They do not show me they are interested in discussing issues other than defending Obama.

I believe that Pres Obama is a decent man. Why he chooses to appoint the worst of the worst is heartbreaking. Penny Pritzker has to be the ultimate betrayal. She stands for everything sacred for the Republicans.

[geek tragedy]

36. Every ecosystem has its niche players.

I would worry about Obama if he didn't have a partisan mob that had his back at every turn.

I'm no fan of Pritzker by any means, but Commerce Department is essentially the Corporate Welfare department, so that kind of person is who I would expect to get that job. I'd be inclined to just get rid of the Commerce Department entirely.

[Divernan]

39. OMG. You actually referred to Obama supporters as "a partisan mob" - your words.

You're going to be in big trouble with geek tragedy - oh, wait. Never mind!

[rhett o rick]

46. The "partisan mob" that are essentially sycophants dont help the system.

There should be no sycophants in the Democratic Party. That is a Republican trait. Democrats often dont agree and sometimes fight among themselves to the betterment of the Party.

And there is no rationalization for appointing Ms. Pritzker to anything. She is what we fought so hard to defeat in 2012. The Pres should be appointing good honest Democrats.

[geek tragedy]

48. It's not sycophantism, it's recognition that there will be a concerted effort

to destroy every Democratic President who dares set foot in the Oval Office. The great majority of that comes from the right, of course.

But it does exist. And the consequences of tearing down and delegitimizing a Democratic president means more Republicans being elected and more Republican policies being enacted.

[rhett o rick]

49. It appears to me that the Pres has decided to fight the Republican Party by

appointing them to important posts in his Admin. Huh? He has not show any inclination to want backing from the left. In fact I would say he appears to be discouraging it.

[geek tragedy]

50. The lovely thing about a Presidential administration

with literally thousands of appointees and hundreds of EO's etc is that one can pick and choose which parts of a President's record they want to emphasize and craft a narrative based on those data points.

How many Democrats vs Republicans do you count in this list:

http://www.whitehouse.gov/administration/cabinet

I count 1 republican.

[rhett o rick]

51. Let's look at the NSA, FBI, Homeland Security, CIA, and the DNI. And how about Bernanke? nm

[geek tragedy]

53. FBI is a Republican reporting to a Democrat (Holder), DHS is a Democrat (Napolitano)

NSA is under Keith Alexander (party affiliation unknown), CIA is Brennan (career CIA, party affiliation unknown) DNI is James Clapper (career intelligence/armed forces guy, party affiliation unknown).

I'm not a fan of several of these guys, especially Brennan and Clapper, btw.

[Enthusiast]

44. " I have never, ever seen it." Me too....nt

[Divernan]

37. Fears rise that Obama is leaning towards replacing Bernanke w/ Summers.

You write: "virtually no one outside of DU is advocating for Summers either."

That is not the case, as a brief use of google documents. As of yesterday, this report over at HuffPo.

http://www.huffingtonpost.com/2013/07/23/larry-summers-fed-chairman_n_3641737.html

Fears Rise That Larry Summers Is Likely To Be Named Fed Chairman

Posted: 07/23/2013 6:34 pm EDT | Updated: 07/24/2013 10:58 am EDT

WASHINGTON -- President Barack Obama is leaning towards former White House Economic Adviser Larry Summers as his choice to replace Ben Bernanke as chairman of the Federal Reserve, according to people who have been briefed on the administration's thinking. Liberal critics of Summers' economic record, along with those who continue to question his ability to work with women, are waging a last-minute campaign to persuade the president to change his mind and instead choose the other frontrunner for the job, Fed Vice Chair Janet Yellen.

Chatter increased Tuesday among Summers' opponents when Fed Governor Sarah Bloom Raskin's name was floated as a possible deputy to Treasury Secretary Jack Lew. Raskin, who has been harshly critical of the Fed, is broadly popular with progressives. Liberal Fed watchers suspected the move was aimed at people pressing Obama to name a woman to the Fed, and they worried selecting Raskin for Treasury would give the president cover to name Summers Fed chairman.

"We are concerned by rumors that Larry Summers, a man known for his offensive and callous opinions on women, is currently being considered to head the Federal Reserve. Women will not soon forget if President Obama picks Mr. Summers for such an important post, a man who believes women are somehow inherently less capable than men," Shaunna Thomas, co-founder of feminist group UltraViolet, said in a statement. "It is high time to shatter the glass ceiling at the Fed and appoint a woman to a post that impacts so many women, and Janet Yellen would be a much celebrated pick."

and: Others who have been briefed by the administration cautioned that the decision is not yet final. As speculation that Summers' ascension was all but assured picked up on Tuesday, administration officials told congressional Democrats that a choice hadn't been made.

At least one senator expressed his dismay Tuesday at the possible selection of Summers. "Larry Summers for Fed Chair? Disconcerting," Sen. Jeff Merkley (D-Ore.) tweeted, "many questions to answer."

AND: earlier this month, from the Financial Times:

Larry Summers has an edge in the race to head the Federal Reserve

Edward Luce By Edward Luce
Charm is overrated. The most important quality for the role is intellectual leadership
http://ricochet.com/main-feed/Is-Obama-Really-Going-to-Pick-Larry-Summers-to-Replace-Bernanke


Is Obama Really Going to Pick Larry Summers to Replace Bernanke?
James Pethokoukis · July 9, 2013 at 1:08pm
Larry-Summers-600x420

While the common wisdom has been that dovish Fed vice chair Janet Yellen was the modest favorite to replace Ben Bernanke, the summer buzz in Washington is that the job is Larry Summers’ to lose. While that well may be, I am not sure why.

Take a recent pro-Summers Financial Times commentary by my friend Edward Luce. Luce writes that if President Obama “wants to fill the job solely on merit, Mr Summers ought to have the edge. … The most important quality is intellectual leadership – something Mr Summers would offer in greater abundance than the others.”

Yet the bulk of the piece actually makes the anti-Summers case quite well, mentioning Summers’ a) reputation as being abrasive and charmless, b) central role in the financial deregulation of the 1990s, and c) 2004 resignation as Harvard University’s president “after seeming to cast doubt on women’s aptitude for maths.” And let me add, Summers’ role as architect of the Obama fiscal stimulus plan, which GOPers see as a monstrously expensive failure.

But Luce thinks Summers’ economic IQ and “neutrality” on monetary policy would trump those negative factors.

[geek tragedy]

38. Note that virtually no one is willing to make the argument for Summers in public.

Maybe one guy--Ed Luce.

[Divernan]

40. And yet the PRIVATE buzz says otherwise.

Transparency! We need it now more than ever!

[geek tragedy]

42. Or hopefully this leak was designed to squash such talk. nt

[JoeyT]

18. I haven't seen any yet.

But you can pretty much guess the shades of the lipstick from past behavior.

First we're going to get the "You're just engaging in baseless speculation. There's no proof the President will....." posts.

Then when it becomes obvious the President does intend to do it will come the posts minimizing all the bad and desperately searching for any what little good there is to praise. Even if it requires movie review levels of editing dishonesty to create it, there will be some good to praise.

When those fail they'll run around yelling about emo-progs and Ron Paul.

It's the "There's no proof of this bad thing/this is really a good thing and I never said it was bad/YOU NEVER LOVED HIM ANYWAY!" cycle.

[IDemo]

20. In a nutshell

DU has pretty much become like an old married couple's arguments that way. Threads consist more about questioning of motives, recall of past transgressions, painting of the mother-in-law as a saint, and name calling than discussion of actual core issues.

[geek tragedy]

24. And what if Yellen gets the nod instead? nt

[leftstreet]

25. DURec

[matthews]

27. Krugman said Yellin would be the better pick? Are you sure? Because I was reading

something somewhere yesterday and it said Krugman favored Summers. So because I already had a headache, I didn't go read the article. I was totally discombobulated that Krugman would do that.

Now you say differently.

P.S. - That post said that Yellin was a really poor nominee. Now I'll have to go check this out.

P.P.S. - Summers even being considered disgusts me. He is the living, breathing proof of the validity of the Peter Principal.

[Triana]

41. DU rec! n/t

[woo me with science]

45. K&R

Thank you for posting this.