… Since leaving government, [Lawrence] Summers took a lot of money from Citigroup. As one of the key architects of the bailout, he was responsible for the decision to prop up Citi with hundreds of billions of dollars of public money and Federal Reserve cheap capital rather than breaking Citi up. As Fed Chair, he will be a principal regulator of too-big-to-fail banks including Citi.
At the very least, this looks terrible. He saves Citi management and shareholders, then he gets a nice pile of money from them for not much work, and now he is regulating them again.
… [At Harvard,] Summers’s questioning of the intellectual capacity of women contributed to his downfall, but in many ways it was the least of his problems. Far more serious were his penchant for overruling the Harvard endowment’s professional money managers with impulsive investment decisions that cost Harvard billions, and his involvement in the Andrei Shleifer affair.
… Summers is also vulnerable for his activities since 2010. Harvard has a strict rule requiring that full-time faculty spend at least 80 percent of their professional time on Harvard business. With all of his extracurricular Wall Street affairs, there is no realistic way that Summers could have met this rule. Either Harvard bent its own rules, or the companies on whose boards Summers served were violating their legal duties by using Summers as a marquee name or paying him in the expectation of future IOUs, but not as a true fiduciary…
There’s a recurrent theme here of personal and institutional greed – get-rich-quick credit swaps that turned out to cost Harvard billions, massively self-serving Wall Street “affairs.” It always seemed bizarre to UD that a man this crass and cynical would be placed in front of the Senate for confirmation. What was the Obama administration thinking?