Larry Summers: His Genius Can't Be Measured In Dollars
The best part about news coverage of Larry Summers is seeing all the new ways people find to avoid saying that the current director of the President Obama's National Economic Council is an arrogant fool.
In this Boston Globe piece about Summers' mismanagement of Harvard University's finances during his scandal-plagued stint as that school's president, we learn that Summers was "a man unafflicted, former colleagues say, with self-doubt in matters of finance."
In the event, Summers' direct connection to the Great Spirit led him to disregard repeated warnings by Harvard endowment managers Jack Meyer and Mohamed El-Erian, a strategy that ended up costing the university billions of dollars—including a direct half-billion-dollar hit for credit default swaps Summers bought:
Widely considered one of the most brilliant economists of his generation, Summers pushed to invest 100 percent of Harvard's cash with the endowment and had to be argued down to 80 percent, financial executives say. The cash account grew to $5.1 billion during his tenure, more than the entire endowment of all but a dozen or so colleges and universities.
As a result, the widely anticipated bust in the credit markets lost actual operating funds—not only endowment funds—for the McGill University of the South.
Under ordinary circumstances anybody who contributed to the destruction of Harvard would be hailed as a national hero, but Summers has gone on to make the whole country poorer.
I don't understand the Washington cant that says Summers, Treasury Secretary Tim Geithner and other manifest failures can't be fired. Ronald Reagan, father of the debtorship society, fired six department heads in his first term, and made a point of first humiliating and then firing his deficit-hawk OMB director David Stockman. George W. Bush fired Treasury Secretary Paul O'Neill on his way to winning re-election. If Obama is ever to get serious about his march to socialism, he'd better remember the advice of history's greatest redistributionist: No man, no problem.