Man of the People

It seems that Mr. Lawrence Summers, chief economic adviser for the Obama Administration, has had a comfortable existence post-Harvard. According to the Financial Times, Mr. Summers received "$5.2m in compensation over the past [two years] for a part-time advisory role at D.E. Shaw," as well as "about $2.7m for speaking appearances, including several to banks such as Citigroup, Goldman Sachs,... JP Morgan," among others (we've seen references to the investment banks, like Lehman and Merrill Lynch).

Mr. Summers worked for D.E. Shaw for only one day a week for two years. We find it is rather difficult to see why he enjoyed such a kingly stipend from an hedge fund with such a stringent recruitment process. He did not seem to do very much, other than being an overpaid glad-hander and a recognised name to make D.E. Shaw look snazzy. Perhaps he was indeed just a sounding-board for the traders at the hedge fund... but we think even a really smart person would be happy to be a once-a-week sounding-board for less than $50,000 a sounding.

It is probably very true that Mr. Summers has not actually done anything inappropriate or illegal, as the Financial Times points out. However, we feel it is not a good sign that the chief economic adviser to this Administration is a person who made millions working a nebulous job at a math-heavy hedge fund like D.E. Shaw. Mr. Summers was notorious for his bulldozer tactics as President of Harvard, so we wonder for whom will he now bulldoze. Will it be for the benefit of the taxpaying American citizens, or for his past (and, presumably, future), employers?

Frankly, we feel that Mr. Summers' revealed relationship with D.E. Shaw, as well as the super-banks and investment banks, is a black mark on the Obama Administration. It is becoming increasingly clear - perhaps excruciatingly so - that the brains behind the Administration are not young, fresh faces. Rather, they are the hardened gamblers who helped to get the United States, and indeed the entire world, into the Depression in the first place.