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Bye Larry Summers - Thanks for The Hangover

The Daily Beast did a round-up about Larry Summers' Exit including my comments alongside those of Eliot Spitzer, Desiree Rogers, Jesse Jackson, Arianna Huffington and others.

 “The departure of Larry Summers from President Obama’s Economic Advisory Free-market Squad, is similar to that of the high-school degenerate who left the keg party after the last barrel was emptied and the place was demolished. Only it was the reckless financial deregulation he promoted through Glass Steagall repeal as Treasury Secretary in 1999 that brought about the Great Bailout Party of 2008 where Wall Street drank the federal subsidy barrel dry and left the general economy trashed. It’s good he’s finally leaving, but it should have happened long ago.”

But, let’s take a moment to reflect on his legacy. This is the man, who as Robert Rubin’s protégé, and successor as Bill Clinton’s Treasury Secretary (after Rubin left to reap millions of dollars at Citigroup, a firm that personified the post Glass-Steagall repeal mega-bank sect), carried his mentor’s deregulation mantle with zeal.

Recall, Summers’ remarks at the signing ceremony for Glass-Steagall repeal in November 1999: “Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the twenty-first century. This historic legislation will better enable American companies to compete in the new economy.”

And, since that all worked out so well – President Obama decided to have Summers lead his economic team. Now, if only, Obama hadn’t just credited Summers with helping to stabilize the as-yet unstable fallout of the banking crisis, it might even seem like somewhere along the way, he got a clue, that would signal instigate a full-fledge makeover of his economic team. But, it’s more like -  Summers executed his most important task; ensuring that the Dodd-Frank debacle of a financial reform bill didn't undo the most bank-friendly aspects of Glass-Steagall repeal (that would have meant separating commercial from investment banks), and so now he can fade into the sunset of University and speaking circuit life– until the next time he pops up again.

And, if only Treasury Secretary, Geithner, the man whose mind is so melded with Summers'  that he once said “we can finish each other’s sentences.” would follow suit.






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Reader Comments (1)

Excellent thoughts, Ms. Prins.

I heard a rumor that Summers will be co-teaching a course, along with Feldstein at Harvard, titled "The Dismantling of the American Economy."

Most appropriate, especially given Martin Feldstein's directorships at Eli Lilly (when they paid the largest criminal fine in US history at that time, and HCA, when they paid the largest out-of-court settlement on Mediare-Medicaid fraud, at that time, and at AIG Financial Products, when you-know-what took place).

September 24, 2010 | Unregistered Commentermyth_slayer
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