This kind of thing really gives me the willies:
Lawrence Summers, the chairman of President Obama’s Council of Economic Advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees from several troubled Wall Street firms and other organizations.
[….]Summers, a leading architect of the administration’s economic policies and response to the global recession, appears to have collected the most income. Financial institutions including JP Morgan, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.
The Geithner-Summers plan to continue with TARP-buying (as opposed to nationalizing) is very popular with the firms that paid Summers all that money over the past year. Maybe it’s the right plan anyway. But these kinds of things sure look like de facto bribes to me.
ThymeZoneThePlumber
You are right. Summers’ making a lot of money as a big cheese in the financial world and then appointing himself to Obama’s cabinet is almost as troubling as Dick Cheney choosing himself to be VP and then outsourcing a war to Halliburton.
I’m glad we caught this Summers thing in time.
As you can tell I am right with you on this. Now, what I am wondering is, if finance was 40% of America’s economy, and the part that controlled the control of capital, how do we establish order without hiring guys who know their way around in that world?
Sure, I’d much rather have hired the president of the Goose River Bank of North Dakota, and who wouldn’t? But these are extraordinary times.
DougJ
I agree with you about this, but you can’t tell me that it inspires much confidence when people are paid millions by companies and then hold positions where they decide those companies’ fates.
robertdsc
Summers was instrumental in the deregulation frenzy during the Clinton years. How he got to where he is at today when he should have been shunned is beyond me.
For all his strengths, the President failed miserably at bringing Summers on board.
ThymeZoneThePlumber
@DougJ:
Yes, but perhaps my snark-fu was too strong. How do you ride herd over those very people (the ones Obama told, last week that he was the only thing standing between them and the people with the pitchforks) without hiring from inside their ranks?
One of the things I like about Summers and especially Geithner (who I like more with every passing day) is that they know how the games are played and where the stashes are hidden.
Just call me an anti-concern troll.
Just Some Fuckhead
I agree with DougJ. It stinks. Summers is part of the problem, not the solution.
Just Some Fuckhead
@ThymeZoneThePlumber: "Sycophant" is shorter and more to the point.
JackieBinAZ
I hope compassionate corporatism is kinder than compassionate conservativism has been.
ThymeZoneThePlumber
@Just Some Fuckhead:
?
Which point is that?
guest omen
has summers explained why he thinks it’s okay to pollute africa?
rob
Disturbing indeed but, Summers is supposed to be some kind of economic genius or something. Whatever- just fix this freakin’ economy now…
guest omen
@rob:
somebody posted this earlier:
http://thisishistorictimes.com/2009/03/the-evil-dead/
rob
@guest omen
yeah I know- it’s only been 2-3 mos. Patience is a virtue. Joe the Plumber is on Bill Maher- and it reminds me that Thank God Obama is the President. Also…
rob
Joe the P is a complete idiot.
guest omen
does krugman know about this? he says summers is his favorite.
guest omen
if i were a plumber, it would kill me that that jerk was misrepresenting my profession and giving it a bad name. so i’ve been calling him joe the dumber.
Woody
One way that’s worked in the past is to take their children hostage.
They don’t actually have any skin in the game otherwise…
ThymeZoneThePlumber
I know, I really miss the Bush Crime Family.
Good times.
guest omen
@Woody:
i want to emulate the french. instead of holding a lowly manager hostage, let’s get a couple of ceos.
what’s a bushian euphism for "holding hostage"? temporary restricted engagement?
Brick Oven Bill
Wait, you mean that Geithner and Summers both worked for Rubin, who worked for the Clintons, you know the ones who made all the money after they stepped down from power? And that Geithner’s Chief of Staff is a lobbyist who came to him from Goldman Sachs and that he cannot find any other staff? Because there are no lobbyists on Obama’s staff except for the 19 really important ones?
And that Geithner got a $400k+ ‘severance’ that was not a ‘bonus’ because it was a promotion? And that the banks are getting trillions in taxpayer funds while the smokers are now paying $8/pack, which is OK because all smokers make more than $250k/yr?
Q: How will we know when the economy hits bottom?
A: When the birth certificate is leaked.
Buy stocks when the birth certificate comes out (if there is still a functioning stock market). Your rate of return will exceed 20% in this instance.
ThymeZoneThePlumber
@Brick Oven Bill:
Friday night … you’re drunk again.
What a pleasant surprise.
guest omen
@Brick Oven Bill:
funny how you guys could never turn that high power lens on cheney and his den of contractor thieves.
John H. Farr
People who routinely receive that much money for just showing up, and there are a bunch of them, have no idea what life is like for the rest of the world. The fee for just one of Summers’ speeches would relieve so much pain and anxiety for most families, yet in his world it probably counts for next to nothing.
This inability to empathize represents a sickness of the soul. And to keep on raking it in, even when one doesn’t need it speaks for itself. Such individuals should never hold positions of authority and warrant only pity for their lack of self-awareness. How wonderful it would be if our society rewarded elegance of spirit instead of how much one can eat!
The ghosts of all the unhelped souls will chase these bastards through the halls of karma into to pits of hell. This is simply natural law, which is why I’m always baffled that as a species, we take so long to learn. We know what makes the rain come down, and we adapt. We know instinctively what causes misery, yet we do almost nothing.
ThymeZoneThePlumber
Somebody named Daniel Hannan, who I take to be a brit, is on CSPAN saying that stimulus won’t work because "If throwing around all that money is the solution, then communism would have worked."
My question is, how do people like that get on television?
Just Some Fuckhead
What John Farr said.
Martin
Hmm. There’d be almost universal support for Warren Buffet in either Summers’ or Geithner’s job, yet he’d earn massively more from the same entities. So there’s something more to qualify/disqualify than just making money off speaking fees. What is it that Buffet has/does that Summers doesn’t?
ThymeZoneThePlumber
@Just Some Fuckhead:
What exactly did he say? That Summers took enough money for an appearance to "relieve pain and anxiety for most families" and therefore …. something?
Wow. This is remarkable stuff. The guy took a generous speaking fee and therefore …. well, we just don’t like him. Or something.
Rob has it just about right at 10: Fix the problems. I don’t really care if Summers eats an occasional kitten. The moral imperative for fixing the big problems greatly outweighs the petty objection to a rich guy getting paid a lot of money to make a speech. If he helps fix things, more power to him. I don’t have to like him.
The kitten thing is a figure of speech. Of course I really meant, "Chocolate bunny."
Martin
Not all investors make more than $250k/yr, and some smokers do make more than $250k/yr.
Realistically, can most people stop investing? Would that be a good thing for them and society?
Realistically, can most smokers stop smoking? Would that be a good thing for them and society?
The ‘smoking tax is a tax on poor people’ really pisses me off, BTW. It’s not a tax on poor people – it’s a tax on smokers. Most poor people don’t smoke and they aren’t being taxed.
Brian J
I can guarantee you there is nothing wrong with what happened. Okay, maybe that is too strong a word, but it’s not exactly like Summers was an obscure academic before he started to work for Obama. On the contrary, he’s one of the most famous economists in the country, if not the entire world. Thus, his past is well known, and since he’s been with Obama for a long time, I’m sure this was looked into.
From what I can tell, for people like Summers (i.e. highly reputable and very intelligent), this is very common. Laura D’Andrea Tyson, Bill Clinton’s CEA head and an economic advisor to Obama, has been a director at Morgan Stanley since 1997, to give just one example.
Actually, to make a long point shorter, this is probably similar to Krugman collecting a fee from Enron a few years before the trouble started with that firm. It’s troubling only if you refuse to scratch the surface, beneath with you’d find nothing, and only if you think that any association whatsoever is grounds for a black mark.
ThymeZoneThePlumber
Yes. I smoked for 40 years, and stopped in five minutes.
If I can do it, anybody can do it. They just have to believe they can do it.
guest omen
@ThymeZoneThePlumber:
cspan has been working overtime trying to give the man traction. he’s been referenced a few times earlier in the week.
guest omen
@Martin:
it’s cuckoo to even compare the two.
Brian J
Oh yeah, as for what might amount to a bribe in everything but name, I’m not sure what to think. I don’t really know what to think about Summers’ potential views on nationalizing, because he’s not going to announce the president’s plans ahead of time. In the same way that anybody in the administration is going to say the opposite right up until they announce any plans to nationalize, Summer is going to keep his mouth shut. Maybe someone has some inside knowledge, either because of his academic work or because of a rumor, but it’s not exactly right to pretend he’s doing anything but voicing the official line of the administration at this point.
ThymeZoneThePlumber
@guest omen:
He speaks beautifully and says the most remarkably impossibly incomprensibly idiotic things.
Brian J
That’s a much, much bigger issue, and you’re right to bring it up, but at the same time, it seems like a lot of otherwise decent, intelligent people felt that way at the time. Like others, Summers has supposedly changed his mind on regulation, and if he’s willing to give his stature and expertise to the administration while admitting his mistakes, it’s not unreasonable to give him a shot.
Yes.
ThymeZoneThePlumber
Oh dear, I was imcomprensible. Which is almost as bad as being incomprehensible.
AnneLaurie
When he was challenged about that memo saying that "outsourcing America’s toxic wastes to the less-developed world would be a win-win situation", Summers first tried to justify it as a ‘thought experiment’ and then claimed that it was ‘meant to be sarcastic’. He may be a brilliant economist — a talent I am beginning to think may be as socially useful as being the world’s leading Ptolemaic astronomer — but he pushes the whole ‘contrarian thinker’ idea to the point of being a genuine arsehole. He’d better give some speedy demonstration that he’s willing to start ratting out his former employers, because Mr. ‘Maybe-women-just-aren’t-cut-out-to-be-scientists’ Summers is bound to say something outrageous enough to offend a considerable number of people into calling for his resignation, or defenestration, before the summer solstice.
ThymeZoneThePlumber
@AnneLaurie:
Hmm. I just lived through 8 years of government by approved personality. A Justice Dept where people were asked if they were pro life before they were hired.
Somehow an economist who has goofy cultural ideas doesn’t worry me that much. If he knows which bank presidents are the ones to threaten to get the economy working better, then he has earned his keep.
Besides, economics is a cargo cult. I don’t care if these guys are just weird. They don’t strike me as being as unlikeable as computer people, which is the crowd I hang around with IRL. You talk about a bunch of creepy, sociopathic assholes? Yes, we are.
John Cole
Is anyone watching Maher?
Joe the Plumber is so full of shit he can’t even keep a straight face.
And David Frum is still a wingnut, and only seems sane when compared to Mark Levin.
Reihan Salaam should stick to print.
And Sam Donaldson is like a walking wax museum.
ThymeZoneThePlumber
@John Cole:
Turned off my premium channels. Turned off my land line.
Stopping the paper. Eating Safeway brand food products.
Cutting back. Battening down. Tightening up.
Storm coming.
Mnemosyne
@guest omen:
This is my BOOMSTICK!
Emma Anne
@Martin:
I suspect it is because Buffett has shown some concern for people who make ordinary amounts of money. He disagreed with a system that resulted in his secretary paying a higher marginal tax rate than him. He opposes abolishing the estate tax.
Summers just seems like a insulated, spoiled asshole. Which wouldn’t matter if people had any faith in him to fix the economy. But while I have heard plenty of people say he is smart, I haven’t heard much of anything that makes me think he has good judgment.
Brandon T.
OH NOES!!
My Ph.D. advisor regularly takes engagements and speaking fees from Merck, Pfizer, Roche, etc….I had no idea he was a tool of evil Pharma!!
I should quit grad school right now, in protest.
On a more serious note: Doug, you presumably have some experience with academia. Tell me you don’t know that famous economists/chemists/biologists routinely get invited to give talks/consultations for fees in proportion to their notoriety–and that it generally involves only the most superficial connection with those companies. Tempest in a teapot indeed.
Emma Anne
@guest omen:
Krugman knows Summers and respect him. But I don’t get the feeling that he is thrilled by his performance thus far.
ThymeZoneThePlumber
if it weren’t the topic of the thread.
Which it more or less is. Despite that, however, it still doesn’t matter.
What matters is the outcome. The outcome is the unemployment rate 6, 12 and 18 months from today.
11, 14, and 16+ percent, bad.
11, 10, and 7 percent, good.
Summers’ personality, moot.
Pidgin English, fun.
Brandon T.
People with aspergers and other autism-spectrum disorders generally seem to act like assholes. It’s been widely suspected by a great many people that Summers is one of them.
TenguPhule
By shooting them all and starting over from scratch?
TheHatOnMyCat
@TenguPhule:
hoʻomalu
TenguPhule
In other news, Madoff brother gets access to $10,000 a month for living expenses.
It just never stops with these people.
Corner Stone
@TenguPhule
Hey! C’Mon now! That’s only like $120K a year!
Poor bastard can barely afford caviar or escargot on that workmanlike salary.
J. Michael Neal
Is Lawrence Summers an asshole?
He’s an economist. Of course he’s an asshole. They all are. Paul Krugman is a giant, flaming jackass. If you’re going to start choosing your economists by who has a great personality, you aren’t going to end up with any of them on your team.
Brian J
I thought Frum was by far the worst. (The others were okay, if only in spirit.) I’d like a list of Democrats who are looking to heavily regulate the economy like it was in the 1970s–assuming, of course, it was the way Frum characterized it. (It could very well have been like that, but I wasn’t alive then, and these people have a way of, ahem, exaggerating their claims just a bit.) You can argue over the merits of various proposals in a number of ways, but it’s pointless to pick a fight against the plans of the other side that just don’t exist. And yet, that’s what these guys keep doing. Plus, he came across like a snippy little douche bag, and not in a fun way.
Brian J
Perhaps he is, but since he’s working for Obama, I’m going to assume that he’s in agreement with the ideology behind his plans, even if he doesn’t agree with the ways to get there. So when Obama speaks out about a way to shift more of the burden to those who have actually done pretty well in the last few decades, I’m going to assume Summers is right there with him. If this is the case, then he’s probably not a spoiled asshole.
Of course, I could look at what he’s written, but since it’s late and I am going to bed soon, I won’t…right now.
Doug H.
@TenguPhule: That worked so well for the French, Soviets, and Chinese.
AhabTDefenestrator
With all due respect, I submit that the Gentleman is just a "when all you have is a hammer…" type of guy.
guest omen
soon coming to a walmart near you:
Johnny Pez
@Doug H.: I notice you left the Americans off your list there.
TenguPhule
@Doug H
It worked perfectly well for us 233 years ago.
TenguPhule
Nah, it’s just that every fucking problem these days is a nail.
lethargytartare
I must have missed the glorious tales of the minutemen storming the White Tower and the beheading of King George in my history class…
MikeJ
Not even close. We (and by we I assume you mean the US) had a political revolution. We didn’t have the massive anti-intellectual purges that have so often come along with revolutionary movements.
I would suggest that rounding up school teachers and forcing them to work in rice paddies isn’t the best solution to America’s problems. Believe it or not, rounding up the *bankers* to work in the rice paddies isn’t the best solution either,
HeartlandLiberal
You should all read this diary currently at top of req list at DailyKos:
Moyers drops bailout bomb on Obama
And in the comments of this diary, note this post:
list of the notable speeches given by Summers last year, the amount he was paid
Below is a list of the notable speeches given by Summers last year, the amount he was paid, and the date of the address.
Skagen Funds, $60,300, (1/9/2008)
Skagen Funds, $60,300, (1/10/2008)
Skagen Funds, $59,400, (1/11/2008)
JP Morgan, $67,500, (2/1/2008)
Itinera Institute, $62,876 (1/8/2008)
Citigroup, $45,000 (3/3/2008)
Goldman Sachs Co., $135,000, (4/16/2008)
Associon de Bancos de Mexico, $90,000, (4/3/2008)
Lehman Brothers, $67,500, (4/17/2008)
State Street Corporation, $45,000, (4/18/2008)
Siguler Guff & Company, $67,500, (5/7/2008)
Hudson Institute, $10,000, (05/28/2008)
Citigroup, $54,000, (5/30/2008)
Investec Bank, $157,500, (6/13/2008)
Goldman Sachs, $67,500, (6/18/2008)
Lehman Brothers, $67,500, (7/30/2008)
Tata Consultance Services, $67,500, (9/21/2008)
State Street Corporation, $112,500, (10/2/2008)
McKinsey and Company, $135,000, (10/19/2008)
Charles River Ventures LLC, $67,500, (11/112008)
Pricewaterhouse Coopers, $67,500 (9/9/2008)
American Chamber of Commerce In Argentina, $135,000 (10/7/2008)
American Express, $67,500 (5/7/2008)
Xenos
@ThymeZoneThePlumber:
I think Pollyanna Troll might be le mot just.>
bayville
Lawrence Summers is this administration’s James Watt. A totally unlikeable guy, who swore on the merits of mortgage back securities during the 1990s – while continuing to fail his way to wealth and fame.
kay
Summers scares me much more than Geithner does. I read the profile of Orzag in the NYTimes.
Orzag and Summers battle for influence with Obama. Summers injected himself into both the stimulus discussion and crafting the budget blueprint. Summers was holding meetings on the budget, until Orzag objected. Orzag prevailed, and now goes around Summers to get to Obama.
I don’t believe that Summers, who did not have to be confirmed and thus escaped any real scrutiny, should have this much influence.
I feel as if all the hand-wringing over Geithner has given Summers cover. Geithner, for all his problems, is limited to Treasury, and is accountable. Summers is influencing the whole Obama agenda.
Enough already with Larry Summers in government. Tell him thanks and show him the door.
liberal
@ThymeZoneThePlumber:
The claim that the only guys with knowledge of the workings of modern finance we can hire are guys who are thoroughly corrupted and have a terrible track record (cf Summers arguing against regulating derivatives) is as silly as the claim that people who think Geithner should be replaced must name a particular replacement and have a thorough knowledge of that person’s biography.
liberal
@ThymeZoneThePlumber:
LOL! You like the fact that Timmeh is robbing American taxpayers of hundreds of billions, or trillions, of dollars?
Yeah. Uh huh. You’re implying that Geithner will eventually do right by those of us who aren’t banksters? Dream on.
liberal
@HeartlandLiberal:
That conversation never took place, because this "Black" person cannot possibly exist—as Thymezone pointed out, the only people with expertise are the criminals themselves.
liberal
@ThymeZoneThePlumber:
Yes, what matters is outcome, and you’ve presented zero evidence and no convincing argument that dumping money on the banks and swearing to protect their bondholders—while screwing the taxpayer—is going to be any more effective than just seizing large insolvent banks.
liberal
@Brandon T.:
LOL!
You’re arguing that pharma hasn’t corrupted drug research, the reporting of results, etc?
Guess you don’t read any major newspapers, huh?
liberal
@ThymeZoneThePlumber:
And the evidence that Summers is likely to threaten bank presidents to get something done which is truly against their interest, in a major way, is…?
liberal
@Brian J:
First, there’s no evidence Summers is decent.
Second, there were presumably many decent, intelligent people who actually got it right.
Only very recently, and the actions of the Obama administration on the financial crisis to date would indicate not meaningfully.
Ludicrous. What expertise? Why give him a shot? You could say the same thing about Donald Rumsfeld, for example.
MikeJ
Dude, when you post six comments in a row it’s time to adjust the Ritalin.
liberal
@Brian J:
Nope. The analogy fails, because Summers was intimately involved with ensuring derivatives could not be regulated. Krugman wasn’t personally involved with any policy moves that led to the Enron crisis, and wrote columns at the time of the California electricity crisis claiming that it was essentially entirely created by suppliers colluding to restrict supply, which puts him in opposition to Enron et al.
liberal
@ThymeZoneThePlumber:
[Emphasis added]
Except for the fact that there’s no reason to think Summers will help fix things, and good reasons to suspect he’s going to try to protect the banks and their bondholders for their own sake.
liberal
@Martin:
Not that I know enough about Buffett to voice 100% support for him being appointed to lead Treasury (and I don’t see how he’d get around his ownership stake in Berkshire—he’s not going to divest that, after all), but your question is very simple to answer:
Summers helped prevent the regulation of derivatives.
Buffett—long (IIRC) before the current crisis—referred to them as weapons of massive financial destruction.
liberal
@guest omen:
He also wrote this:
Brian J
But was he involved as an academic/and or government or as a paid employee of the firms for which he was advocating deregulation? When he was working in government, I don’t think he was employed by any financial firm. I don’t know the time line of his employment; perhaps you do.
I’m not saying that he didn’t do anything wrong, but on the same note, is it clear he did anything wrong or even ethically shady? Not to me.
By bringing up Krugman and Enron, I was trying to say that it’s likely that even if Summers did nothing wrong, he could smeared by mere association.
liberal
More fun stuff showing how big an idiot Summers is:
liberal
@Brian J:
You’ve got it completely backwards.
The point is that Summers did do something wrong, and that Krugman didn’t.
If Summers took all this money from financial firms yet advocated policies that were against their interest, or perhaps didn’t have any connection to policy making in that arena, yes, it would be guilt-by-association.
But because Summers has a history of advocating disastrous policies that benefit them, it’s just "guilt."
liberal
Aside: my impression is that Summers was a deputy or assistant Treasury Sec at the time.
Brian J
Once again, if they were going to nationalize, they wouldn’t do it until the last minute. Summers certainly isn’t going to drop large hints about administration plans; he’s going to voice the administration’s lines until he’s told to do otherwise.
You can’t seriously be arguing that the man isn’t an economics expert. Even his critics say he’s brilliant and knowledgeable.
You give him a shot because of his vast experience in government and because of his knowledge about economics. Not many people have either one of those, and even fewer have both. That carries a lot of weight with a lot of people. And despite having some disagreements with some in the Democratic party in the past, he’s been a solid supporter of the Democratic agenda.
If you combine his knowledge and expertise with the idea that he doesn’t scare people because, rightly or wrongly, he’s a known quantity, it makes it possible to get more done. Maybe a good comparison is Robert Gates at Defense. Just like he might be the only person who can press hard for cuts at the Pentagon, Summers might be one of the few people who can get Wall Street to go only with reform. You make a valid point that his viewpoints might indicate it might not come from him, or at least not as strongly from him as with other people, but we’ll see. The orders come from the top, and I’m pretty confident in Obama’s ability to see what needs to be done.
Brian J
That’s just it: right now, you don’t have much, if any, proof that he did anything wrong.
Patrick
If he was taking these speaking fees while in the Government, then that might be an issue. But a private citizen is allowed to give a speech for a fee. Whom would you like a leading economist to give speeches to?
Summers might or might not be a sleaze, but this isn’t proof either way. It is more guilt by "slight association with large leap of faith" that seems to pass for news these days. Obama was at a fundraiser in Bill Ayers house, is that equivalent to Obama being a Weatherman? It is the same argument.
DougJ
If Ayers had paid Obama five million dollars, I don’t think Obama would have won the election. Your comparison makes little sense.
CalD
The problem is that anyone who understands the financial markets well enough to even try to start untangling the mess we’ve got on our hands is likely going to be someone who’s recognized in the field as some kind of guru. And in the financial sector, people believed to be guru’s tend to make shitloads of money. People naturally want to hire gurus as consultants and hear them speak and I don’t know if you’ve noticed or not, but people in that industry are not exactly bashful about paying themselves well.
I am not offering this as any sort of character reference for Larry Summers, specifically. I’m just saying that of the people in the world who might credibly be qualified for the job, there’s a strong likelihood that any of them made a pretty good buck last year and that it would be unsurprising if their biggest customers were, in fact, the very people upon whom they would now be seeking to impose a little fiscal responsibility — even if that person were completely above reproach in every other way. I’m afraid that how much money someone made the last few years and from whom are not likely to be the most reliable predictors of their motives or intentions in this case.
lethargytartare
I spent the second half of the 80s HATING Dennis Rodman.
When the Bulls signed him I was sure it would be a disaster.
I think it was some time during the 18 game win streak that I admitted Phil Jackson and Jerry Krause might know a bit more about running a basketball team than I did.
just a thought…
Tim H.
That’s not apparent to some of us.
WashPo
So we’ll see, but if six months from now the only thing that has turned around is the banksters’ bottom line, Obama has a big problem.
ThymeZoneThePlumber
@liberal:
Yeah, what you mean is that you think there is no reason for you to think he will help fix things.
I don’t agree, for reasons already stated.
The foregoing assumes that you are sincere. I don’t have a reason to think that, necessarily. Around here, that just wouldn’t be prudent.
ThymeZoneThePlumber
Don’t be silly. Obama is the president, and the policies and actions will be at his direction, not Summers’.
Summers will advise and inform his colleagues in the administration, and the president, and engage in dialogue with them. Obama’s stated model for this is to have people around him who don’t necessarily agree with him, or with each other. It appears to me that he’s chosen people with that in mind.
If you want to put on the appearance of making a serious argument, you need to make a serious argument.
ThymeZoneThePlumber
Pretty tortured strawman there.
sparky
i think what people who support Summers are not responding to the main point–Summers has a track record in economics, and AFIAK it is all bad. you can be a brilliant theorist but be completely wrong. and that seems to be the case with him.
as for the speaking fees, it’s not smearing by association. it’s brought up to show that he is captive to the industry. business speakers aren’t hired because they (the speaker) is going to say something alarming. they will give platitudes, mush, reassurance that everyone sitting there is already doing great. if there was any–and i mean any–evidence to suggest that Summers somehow had changed his mind about any of his thinking or behaviour for that time, i would be inclined to give his presence the benefit of the doubt. but he hasn’t so i shan’t. nor do i see any reason (other than hope that somehow things will turn out better this time), to think otherwise.
J. Michael Neal
Black doesn’t understand the difference between a depository bank and other kinds of financial institutions. It only takes a cursory reading of the law to realize that he’s full of shit, rather than being an expert.
J. Michael Neal
No, his track record is not all bad. He was wrong on a specific subject. That’s not the same thing.
ThymeZoneThePlumber
So, he won’t get voted into the Always-Right Economists Hall of Fame?
Which is still, you know, looking for their first inductee. They have a thing for the bust to sit on and everything.
But anyway, economists who are right? That’s like chiropractors who can cure disease. Funny, but not real.
ThymeZoneThePlumber
Oh brother.
Yes, a good economist like Summers would have taken up selling garlic slicers at supermarkets, if he had a hair on his ass. That’s what the respectable ones do.
( rolls eyes )
I just don’t think that in the era of self-appointed Vice Presidents who start a useless war that they can outsource to their old employers, Summers’ speaking fees are going to be a big deal.
iluvsummr
@AnneLaurie:
I tend to agree with those who believe Summers has Aspergers or some other form of high-functioning autism. As an African, I’ve been wary of him since his World Bank memo about exporting toxic waste to underdeveloped countries leaked (toxic waste dumping by Italy and other countries doesn’t seem to be working out too well for Somalia right now).
But the first and last time I ever saw him in person he was very, very, very humble. I lived in Boston at the time and this was shortly after his comment about women in the sciences. He was invited to give a talk about international health and someone sent out emails to every female faculty member or researcher within a five mile radius of Avenue Louis Pasteur. The auditorium was packed to the rafters with women who heckled him and booed; he seemed absolutely contrite then.
I don’t think the speaker fees amount to a bribe, and I’m sure Obama’s listening to other voices on the economy. I haven’t heard what Austan Goolsbee, Paul Volcker and other Obama economic advisers’ views are on TARP versus nationalization but I’d bet they’re all on board with the current strategy.
Persia
I would comment on this, but as a woman, numbers confuse and frighten me. Just like toy trucks.
(Rephrased: I hate that man too much to be capable of coherent commentary on him. Maybe, for him, that proved his point. But fuck him if that’s the case.)
Rick Taylor
I don’t mind someone with ties to Wall Street working in the administration; I do like to see it balanced with academic types. Geitner is a step in that direction, though not as big as Id like. I’d be happier if we heard more from Paul Volker, and even happier if they picked up a contrarian like Stigglitz. This is a tremendously complex challenge we’re up against, different groups are going to have both strengths and blind spots, and I really would like to see a team of rivals in place.
As I understand, there are two different arguments for the plan to buy up toxic assets. They both assert we need to recapitalize the banks (something just about everyone agrees on). The first argument is direct; this will get capital into the banks because we’re buying up their devalued assets. The fact we’re buying up toxic assets is almost beside the point; we could almost just as well pay inflated properties for their toasters. Buying toxic assets does have the advantage that if the market really is severely undervaluing them, we won’t end up spending as much money in the long run, but that is secondary. I hear this argument when people respond to warnings we may overpay for these assets by saying that’s not a problem, because we want to get the banks capitalized.
I don’t think this argument works (and it isn’t the argument the administration is making). While we need to recapitalize the banks, it’s an inefficient way to do it, because you’re buying up all troubled assets, which would mean from all the banks whether they actually need the help or not. It’s scattershot. This has been the main criticism of Wall Street friendly solutions in general. Yes it’s maddening when so much money goes to people who got us into this mess, but what’s more important is that the money is not then going where it’s needed. As an example, the AIG bailout sent 12.9 billion dollars to Goldman Sachs, that says it doesn’t even need it. And by the way, that was enabled by Paulson, who used to be their president; how’s that for conflict of interest? The trouble is we’re playing on Wall Street’s terms, bailing out not just the bad mortgages, but all the insane bets they made about what those mortgages will do, and that puts us in an impossible situation.
So coming back from the digression, the argument for buying up toxic assets isn’t just that this will infuse some cash into the bad banks, it’s that these assets are currently undervalued, and this will introduce some liquidity, raising the price of the whole asset class. Frankly, this strikes me as crazy; and I say this hesitantly, because Geitner knows a lot more about these matters than I do. But if this is going to be effective, there has to be the perception that the prices paid for these assets make sense, so that other investors will be encouraged. I recently read an article that Citigroup and other banks we’re bailing out are considering in buying up other banks toxic assets under this plan! I’d assumed that would be forbidden, and I hope it will be. First, we’ve bailed out Citigroup so that it will start lending money to people, not so that it will buy up more up the toxic paper that got it into trouble in the first place. Second, if banks buy each others assets, there’s an obvious potential for collusion, bidding up the prices to help bail each other out. The problem with this is that if that happens, no one will take the resulting prices seriously, and the assets in general won’t become for viable, or if they do it will be temporary.
J. Michael Neal
Yes, because Larry Summers would have been an active participant in a conference on how to improve education for women if he thought that they were inferior.
iluvsummr
@Rick Taylor:
So basically you’re saying the administration’s strategy is to try to re-inflate/maintain the housing bubble so that mortgage-backed securities won’t lose too much of their value? Now I wish I’d taken more than one econ class in college; I don’t understand half of what’s going on.
someguy
DougJ, quit doing the Republican thing, which is damning with faintly raised objections that have no ties to actual known facts. If you don’t have facts, actual evidence of bribery, you probably shouldn’t allege it. It’s sort of irresponsible to do that, a winger thing to do.
Well, except you didn’t invoke Jesus, Real Americans, and how you hate immigrants.
But other than that it was pretty Republican of you.
Emma Anne
That is really, really rude, and I can’t approve of it.
But my God, is it funny.
Emma Anne
@J. Michael Neal:
Summers *does* think women are intellectually inferior. That isn’t an inference; he said so, in detail.
iluvsummr
@J. Michael Neal: I for one am glad that his active concern for women caused him to have a severe case of foot-in-mouth disease during the conference and led directly to Harvard hiring its first female president. They probably would have done it anyway just to keep up with MIT hiring Susan Hockfield in 2004, but Summers made it speedier. Hence my handle ;).
SqueakyRat
Death to Summers. Now.
Rick Taylor
@iluvsummr:
That’s my understanding of it, as someone who is not an econmist and who is trying to make sense of all this by reading other people. And not specifically the housing bubble, but the market in these securities that represent bundled mortgages. The argument is the market is currently undervaluing them, because not all of the owners represented by them will default, and for those who do, the houses will be worth at least something.
A counter-argument is that there was a great deal of fraud during this period, and while these probably are undervalued, it’s not to such a degree it will save the banks. One of the problems is that people bundled these things and sold them and resold them to the point where the owners have little idea what’s actually inside them. In many cases, banks did not demand the "loan tapes" that would document what the assets were based upon.
terry chay
We elected a guy to govern from the middle.
Unfortunately the middle is full of people who were wrong about the economy and enabled the bubble. The only consolation was that the D’s “middle” was full of people who now admit they were wrong.
No surprise, read the same establishment thinking that got us into the Great Depression in "Lords of Finance."
Brian J
This reminds of the episode of "Curb Your Enthusiasm" where Larry and Richard Lewis are at the Lakers game where Larry accidentally trips Shaq. Before that happened, Larry’s complaining that Jackson isn’t putting Shaq in the game, and Richard Lewis says to him, "Yeah, he’s got eight gold rings and he needs to be taking advice from Larry David."
Brian J
Maybe…