Last July, a series of stories detailed the long, disquieting relationship between alleged sex trafficker Jeffrey Epstein and Larry Summers, a prominent economist, hedge fund adviser, former Clinton and Obama administration official and one-time president of Harvard University.
While at Harvard, Summers wooed Epstein as a donor, and apparently was successfully counter-wooed into Epstein’s social circle. Epstein gave $9 million to Harvard over the years, beginning with a $6.5 million donation in 2003. The two men remained friends for years, long after Summers had been forced out of his university perch. In 2011, about eight months after Epstein was released from prison and classified as a class-three sex offender for soliciting an underaged prostitute, Summers attended a party at Epstein’s palatial Manhattan mansion, where he was photographed grinning alongside Epstein, billionaire philanthropist Bill Gates and James E. Staley, a former JPMorgan Chase executive.
Throughout the past year, as Epstein’s second criminal trial dragged this shameful past back into public view, Summers has been conspicuously close-mouthed about what he knew and when he knew it. There are, after all, few flattering things to be said about one’s connection to an international sex criminal. Epstein’s first arrest was in 2006. His prosecution was amply covered by Florida newspapers and national outlets including The New York Times. One of his defense attorneys was Harvard Professor Alan Dershowitz, whom Summers knew well. And shortly after Summers resigned as Harvard’s president (he remained on the economics faculty), the school’s own newspaper reported that the university had decided against returning Epstein’s gift. Conversations were underway about what to do about the Epstein problem.
All of which raises two distinct possibilities: Either Summers was ignorant of Epstein’s wrongdoing, itself an act of staggering incompetence, or he knew what had transpired and simply didn’t care. Is Larry Summers a fool or an enabler?
Joe Biden seems to be satisfied with whatever the answer to that question might be. On Thursday, Bloomberg News reported what had been rumored for weeks: Summers has been advising Biden on economic recovery strategies for the ongoing coronavirus collapse.
This prompted immediate outrage from the progressive wing of the Democratic Party, where Summers is loathed for, well, just about everything he has ever said or done. But Summers isn’t just a bad choice for a Democratic nominee trying to win over reluctant progressives. There are plenty of neoliberal economists out there. But none of them are nearly as toxic as Summers. He is someone you only turn to if you don’t give an iota about your own reputation.
Over the past three decades, Summers has amassed a policy record of almost unrivaled social ruin. As a Clinton Treasury official in the early 1990s, Summers advocated for the rapid privatization of Soviet assets after the fall of the U.S.S.R. ― a disastrous policy that allowed a few oligarchs to seize control of the country and led to the enthronement of Vladimir Putin. Summers’ protege in that debacle — another Harvard man, economist Andrei Shleifer — was eventually sued by the U.S. Department of Justice for allegedly abusing his position to defraud both the American and Russian governments. Harvard paid $26.5 million to dismiss the charges in 2005, ten years after Summers had blurbed Shleifer’s book, ”Privatizing Russia”: “The authors did remarkable things in Russia, and now they have written a remarkable book.”
The “tawdry Shleifer affair,” as it became known around Harvard, was instrumental in spurring Summers’ downfall as Harvard president. But the straw that broke the camel’s back was a speech Summers gave in which he argued that women are biologically predisposed to mediocrity in the sciences. Two years after Summers was forced to resign as university president, the global economy collapsed ― led to disaster by a slate of financial deregulation Summers had helped force through during his tenure as Clinton’s Treasury Secretary.
But while the 2008 crash ravaged Summers’ intellectual reputation, his political prowess remained strong enough to land him a job as chair of President Barack Obama’s National Economic Council, where he overruled other experts and undershot the size of the economic stimulus package ― a decision that ultimately allowed the unemployment rate to hit 9.8%.
By 2013, the Democratic Party seemed to have finally had enough of the guy. When Obama tried to name Summers as chairman of the Federal Reserve, five Democratic senators on the Banking Committee teamed up to block the nomination. The list included Elizabeth Warren (D-Mass.) and her fellow progressives Sherrod Brown (D-Ohio) and Jeff Merkley (D-Ore.). Obama was furious about the liberal opposition. In a private meeting with Democrats on the Hill, he chastised lawmakers for letting Summers become “a progressive whipping boy,” telling them “not to believe everything you read in The Huffington Post.”
But it was not only progressives who revolted against the Summers pick. The nomination fell apart when dyed-in-the-wool moderates Jon Tester of Montana and Heidi Heitkamp of North Dakota joined the opposition.
Summers spent most of the 2020 primary joining former New York City Mayor Michael Bloomberg and other very rich people in railing against the wealth taxes on billionaires and ultra-millionaires proposed by Warren and Sen. Bernie Sanders (I-Vt.).
But his argument didn’t really make sense. Summers insisted that the wealth tax was a bad idea, because rich people know more about putting money to good use than the government does ― after all, he told one forum in September, the rich were “smart enough to accumulate it in the first place.” Summers also simultaneously insisted that he truly, madly, deeply wanted to tax rich people ― just in different, less clearly defined ways than Warren and Sanders had proposed.
But when you are Larry Summers, your arguments don’t have to make sense. You don’t have to keep decent company or explain your relationships with notorious scoundrels. All you have to do is keep telling politicians that what the rich want is exactly what the country needs, and the most powerful figures in the Democratic Party will never stop hiring you to say it.
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