Why Obama Should Not Choose Summers as Treasury Secretary 11 comments
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Pudgy fingers bear-hugged a Diet Coke can while cookie crumbs wriggled from his other hand. Larry Summers grunted his way past the professors and students waiting for him and hunkered to the front of the room, grabbing a few more morsels of baked goods along the way. Without letting me introduce him, Summers then brilliantly proceeded to outline his plans for the future at Harvard in light of new challenges facing higher academia. Suddenly, Summers was done and he stormed out of the room without giving a personal word to any of us lined up to talk to him. His coterie of assistants ran after him, and Summers did pause momentarily to choose which bowl to scoop up a few more handfuls of cookies out of.
When Larry Summers took over the presidency at Harvard after much debate as to where he would land after being Secretary of Treasury under Clinton, I was taking over as President of Student Council at Harvard Graduate Schools of Arts and Sciences. One of my main roles was to keep the Harvard Deans and other leaders at Harvard abreast of the needs of graduate students and lobby for them, so I found myself meeting with Summers once in a while. In this case I had invited Summers to meet the graduate students for the first time, and he acted like the Summers I came to know – brilliant but unable or unwilling to connect with the people around him.
Summers is undeniably brilliant – I do not know how to quantify that but once you talk to him you know his brilliance -- and it would great for Obama to look to Summers for advice in solving the financial crisis smacking the US. It is a tough time, and we need the best minds in positions of influence as I fear at least 5 years of stagnating markets.
However, one of the great problems with the economy right now is the lack of confidence in the US Government to do the right thing and to explain to the American public what needs to be done simply and truthfully. It is not the slowing credit or weak earnings numbers that is the real concern – America’s consumers are fearful that the horrid Bush administration and self-serving Congress will not get it right. As a result, they are petrified about their financial security and starting to stop buying… except for guns, cheap alcohol, cigarettes, and spam. With 2/3 of the US economy driven by American consumers, that lack of confidence is the first thing Congress needs to work on. Unlike in China where our research shows that 80% of consumers are very optimistic that the Chinese Government will get it right to jumpstart the economy, the confidence in the US Government is at an all-time low.
The 3-page to encyclopedic tome bailout is an example, as was a maddened McCain romping about like a caged raccoon willing to do anything to try to get elected. Does sanity exist? Is the Government there to do what is best for the country or for special interests?
It is for this reason that Obama cannot choose Summers. Summers has the worst people skills of anyone I have ever met. His arrogance – and I have known arrogant men and women – would stop him from being able to create confidence in the American public that Obama would be doing the right thing on the economy. I have never seen a smarter person feel the need to demonstrate not just that he is smart but that he is smarter and better than you. In every meeting that I had with Summers, he liked to mentally browbeat people he felt were intellectual inferiors to his towering mind.
For all of the uproar Summers caused at Harvard, it was more his lack of people skills than his thoughts on women’s scientific ability that caused the Faculty revolt and his downfall. And while Harvard professors are a notoriously arrogant bunch, yet incredibly brilliant, their arrogance pales to the stumping Congressmen that dot Washington. Unable to control himself with Harvard Professors like Cornel West, I do not see it ending well when a charismatic but mental half-wit of a Senator asks Summers a question he deems stupid. He will blitz into him, TV cameras be darned, and immediately cause any Congressmen to vote against what Summers wants (and which the American economy and public needs) in order to put him in his place.
After 8 years of polarization, we need a President AND a Treasury Secretary who can build consensus on both sides of the aisle and get the Congress working together effectively and quickly to get the American economy back on track.. We also need a Treasury Secretary who can connect with the American consumer and re-build that trust in the American economy and American system and way of life.
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This article has 11 comments:
I see this as a good thing. Ignorant members of Congress need to be revealed for who they are.
It's been hard to decide if our leaders are that dim-witted, or if they're simply pathological liars who will say anything to pacify the masses while protecting the special interest groups.
Was Volcker charismatic?
Frankly, we need Dr. House, not Doogie Howser.
"Unlike in China where our research shows that 80% of consumers are very optimistic that the Chinese Government will get it right to jumpstart the economy"
I think what people in China doesn't understand is that China and the West will be competing for natural resources very soon. And China will lose, because the West has a head start. There are limits to growth, imposed by the planet, and 1.3 million mouths are a lot of people to feed. Could you imagine 1 billion cars in China? I sure can't. Having said that, they will surely come out of this current recession, but they need to understand they are a "dot -com", a bubble that can't keep going up, forever.
Summers' "inartful" comments about third world countries needing more of our toxic waste because "life is worth less there" will also not be helpful in dealing with South America and Africa.
I think Obama should take a look at FDIC head Sheila Bair, who talked herself hoarse about the dangers of the subprime lending craze to anyone who would listen - which unfortunately for us was too few people who were in charge at the time. She's an expert on mortgages, which is one of the burning issues of the moment. Tim Geithner sounds like top-notch material, but he's needed at the NY Fed and not picking him might also make it easier for Summers to not feel slighted, since the two are so closely linked. Perhaps in that way Obama can keep good relations with both men and hold onto them as informal counsel.
"I'd rather entrust the government of the United States to the first 400 people
listed in the Boston telephone directory than to the faculty of Harvard University."
William F. Buckley, Jr.
us1.institutionalriska...
Rahm Emanuel will insist on this small tribute as a final act of obeisance (did I spell that correctly?) from all cabinet members. One wonders how far down in the ranks this might eventually go - hmmm?
Dr. Mack communicated with Summers' office regarding such derviatives trades. Perhaps, she could have saved Harvard alums hundreds of millions of dollars if Summers had bothered to continue to hear her out before forcing her resignation. There is a wealth of information describing this derivatives whistleblowing case: correspondence between Dr. Mack and Summer's office (emails, faxes, snail mail, phone records, etc.); legal documents; reports from FBI and DOJ interviews, etc.
Given all this, you have to wonder whether Summers was either too
(a) corrupt and wanted to coverup up something(s) at HMC.
(b) arrogant to think that Dr. Mack had anything of value to tell him about mathematical finance and derivatives. Please recall Summers' comments about women and math. Also, please note that Dr. Mack has a doctorate in Applied Mathematics from Harvard and a Sloan Fellows MBA from London Business School.
(c) incompetent to understand what Dr. Mack was trying to warn him about regarding derivatives trades in HMC portfolios.
Did Summers try to silence Dr. Mack the way he, Rubin and Greenspan tried to silence Attorney Brooksley Born of the CFTC? Who knows what goes on in Summers' head? Nevertheless, he seems like a dreadful choice for our nation's next Treasury Secretary.
Dr. Mack communicated with Summers' office regarding such derviatives trades. Perhaps, she could have saved Harvard alums hundreds of millions of dollars if Summers had bothered to continue to hear her out before forcing her resignation. There is a wealth of information describing this derivatives whistleblowing case: correspondence between Dr. Mack and Summer's office (emails, faxes, snail mail, phone records, etc.); legal documents; reports from FBI and DOJ interviews, etc.
Given all this, you have to wonder whether Summers was either too
(a) corrupt and wanted to coverup up something(s) at HMC.
(b) arrogant to think that Dr. Mack had anything of value to tell him about mathematical finance and derivatives. Please recall Summers' comments about women and math. Also, please note that Dr. Mack has a doctorate in Applied Mathematics from Harvard and a Sloan Fellows MBA from London Business School.
(c) incompetent to understand what Dr. Mack was trying to warn him about regarding derivatives trades in HMC portfolios.
Did Summers try to silence Dr. Mack the way he, Rubin and Greenspan tried to silence Attorney Brooksley Born of the CFTC? Who knows what goes on in Summers' head? Nevertheless, he seems like a dreadful choice for our nation's next Treasury Secretary.
Dr. Mack communicated with Summers' office regarding such derviatives trades. Perhaps, she could have saved Harvard alums hundreds of millions of dollars if Summers had bothered to continue to hear her out before forcing her resignation. There is a wealth of information describing this derivatives whistleblowing case: correspondence between Dr. Mack and Summer's office (emails, faxes, snail mail, phone records, etc.); legal documents; reports from FBI and DOJ interviews, etc.
Given all this, you have to wonder whether Summers was either too
(a) corrupt and wanted to coverup up something(s) at HMC.
(b) arrogant to think that Dr. Mack had anything of value to tell him about mathematical finance and derivatives. Please recall Summers' comments about women and math. Also, please note that Dr. Mack has a doctorate in Applied Mathematics from Harvard and a Sloan Fellows MBA from London Business School.
(c) incompetent to understand what Dr. Mack was trying to warn him about regarding derivatives trades in HMC portfolios.
Did Summers try to silence Dr. Mack the way he, Rubin and Greenspan tried to silence Attorney Brooksley Born of the CFTC? Who knows what goes on in Summers' head? Nevertheless, he seems like a dreadful choice for our nation's next Treasury Secretary.
I would not want a Treasury Secretary who is so anxious to please his masters that he will make easy short-term choices instead of the right long-term choices.