The Boston Globe has an excellent piece on Larry Summers’ mismanagement of Harvard’s finances today. As president from 2001 to 2006, Summers overstepped his presidential duties and pushed most of the university‘s cash into the market, against the frantic warnings of his investment chiefs. These moves lost Harvard close to $2 billion.
The article opens with a debate, Summers’ preferred mode of personal interaction:
It happened at least once a year, every year. In a roomful of a dozen Harvard University financial officials, Jack Meyer, the hugely successful head of Harvard’s endowment, and Lawrence Summers, then the school’s president, would face off in a heated debate. The topic: cash and how the university was managing – or mismanaging – its basic operating funds.
Through the first half of this decade, Meyer repeatedly warned Summers and other Harvard officials that the school was being too aggressive with billions of dollars in cash, according to people present for the discussions, investing almost all of it with the endowment’s risky mix of stocks, bonds, hedge funds, and private equity. Meyer’s successor, Mohamed El-Erian, would later sound the same warnings to Summers, and to Harvard financial staff and board members.
Summers essentially makes Wall Street look both smart and humble. An incredible feat!
The entire article is well worth a read.
Summers works two floors above the Oval Office right now. You have to wonder: what kinds of debates is he (brilliantly) winning right now?
Yesterday the New York Times reported that Christine Varney, the new antitrust chief at Justice, was running into resistance as she attempted to do her job (frowned upon in the halls of power).
The most significant dispute appears to have occurred between her and the Transportation Department, which approved an “antitrust immunity request” against Varney’s recommendations. The article noted that Transportation “endorsed a policy popular during the Bush administration that favored such industry agreements out of a desire for efficiency.”
How did they attempt to resolve this dispute? Naturally, they called in a mediator with a record of aggressively steamrolling opposition and blundering his way through all matters interpersonal:
Continue reading Mediator Summers?
Following on Saturday’s weather balloon detailing the Wall Street pay of Larry Summers, today the Times ran a piece on Summers’s work at the hedge fund DE Shaw. Replete with color from inside sources and spare in its critical content, the article is a striking example of journalistic capture; after discussing Summers’ ludicrous compensation ($5.2 million for a year in which he worked one day a week), the piece follows the lead of its sources in functioning to allay concerns about potential conflicts of interest that Summers faces as the chief architect of Obama’s economic policies.
Ironically, given Summers’ infamous remarks on women and science, the article was written by Louise Story, the same journalist who once “reported” that more women with Ivy League degrees were choosing to become stay-at-home moms. Jack Shafer of Slate immediately called that one out as a “bogus trend story,” pointing to its reliance on nebulous “weasel words,” and the piece subsequently became a favorite punching bag of media critics.
Continue reading Story gets it wrong on Summers