Larry Summers Made Out Like a Bandit on Wall Street: That May Be His Key Credential to Head the Fed

[Playinghardball]

Don't get BuzzFlash at Truthout wrong; we're not implying that Larry Summers, allegedly the White House's favored candidate to head the Federal Reserve, actually robbed anybody to make his millions. No, he just is the usual revolving door multi-millionaire "government servant" who has made a fortune from the same financial elite that he was supposed to advise the president on regulating as director of the National Economic Council. In reality -- along with Timothy Geithner -- he appears to have been one of the two key advisers to Obama on continuing to dump government money into saving Wall Street from its gambling debts, and of not proescuting the perpetrators.

It would have been hard for Summers to do anything else but urge the use of taxpayer money to salvage banks too big to fail for a variety of reasons. First, he was a key advocate of allowing large banks to trade in derivatives without regulation. (Summers took a position as early as the Clinton administration, in which he served as deputy secretary of the treasury and secretary of the treasury, that big banks should self-regulate themselves on derivatives.) Secondly, he was responsible for Harvard University, where he served a controversial term as president, losing an estimated one billion dollars in derivative tradings. Thirdly, he supported repealing vitally important protective provisions of the Glass–Steagall Act, the repeal of these regulations that many analysts consider the beginning of the rash recklessnes and unethical if not illegal behavior on Wall Street that led to the 2008 economic crash. Fourthly, Summers is of the same economic elite as those who control Wall Street and Silicon Valley (in fact, he is currently paid for his work with a "red flag" online financing service). This is a guy who served as a chief economist at the World Bank!
Fifthly (although we could go on to create quite a longer list), Lawrence Summers has enriched himself through his Wall Street and Silicon Valley ties to become another revolving door overseer of the institutions who have made him very rich.

As a lengthy Sunday New York Times (NYT) front page (print edition) above-the-fold article on Summers records:

But in 2006, Mr. Summers was forced out of the [Harvard] university presidency for a variety of reasons, including remarks he made questioning why few women engage in advanced scientific and mathematical work. Soon after, a young Harvard alum brought him into the hedge fund world with a part-time posting at D. E. Shaw. That firm, one of the largest in the industry, paid Mr. Summers more than $5 million.

Mr. Summers’s wealth soared from around $400,000 in the mid-1990s to between $7 million and $31 million in 2009, when he joined the Obama administration, according to a financial disclosure he filed at the time. Before returning to government service, he earned $2.7 million from speeches in one year alone.

As for his current work, representatives for Citigroup, Nasdaq and D. E. Shaw declined to disclose his pay. His speaking rates today run into the six figures, according to an associate who spoke on the condition of anonymity, and Mr. Summers has spoken to Wall Street companies like Goldman Sachs, JPMorgan Chase and Citigroup.

More at: http://truth-out.org/buzzflash/commentary/item/18139-larry-summers-made-out-like-a-bandit-on-wall-street-that-may-be-his-key-credential-to-head-the-fed

[FreakinDJ]

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