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Is Larry Summers an Economic War Criminal?
“It will become clear, and may as well be stated at the outset, that this is written by a political opponent of Henry Kissinger. Nonetheless, I have found myself continually amazed at how much hostile and discreditable material I have felt compelled to omit. I am concerned only with those Kissingerian offenses that might or should form the basis of a legal prosecution: for war crimes, for crimes against humanity, and for offenses against common or customary or international law, including conspiracy to commit murder, kidnap, and torture.”
The Case Against Henry Kissinger:
The making of a war criminal
Christopher Hitchens
Harpers, March 2001
Where does Larry Summers get off giving Americans advice on how to fix the continuing housing crisis? And where does this political opportunist find the unmitigated gall to instruct us not to “finger point” and thereby identify culprits in Washington who helped enable the housing mess? Like advising the White House to ignore the fact of a collapsing credit market for jumbo and high SATO loans for the past several years?
As a general rule I like to follow the sage advice of Roger Kubarych, formerly of the Fed of New York and then Wall Street, but now working in the public sector, in 2008 during the depths of the crisis. “I have nothing bad to say about anybody,” he quipped during a discussion about how and when the FRBNY senior staff were first apprised on the problems at Bear, Stearns & Co. Good advice in these dark times.
But former Harvard University head Larry Summers is a special case and one that rises to almost Kissingerian dimensions, to borrow from Christopher Hitchens. In “Rational Irrationality” in The New Yorker last May, John Cassidy compared Summers to Henry Kissinger, an apt appraisal which begs the question: Is Larry Summers an Economic War Criminal?
Not only did Summers work tirelessly during his years in the Clinton Administration to undermine regulatory and prudential controls in our financial markets, but he joined Fed Chairman Alan Greenspan and his political sponsor, former Treasury Secretary Robert Rubin, and public paragon Arthur Levitt, in smearing CFTC Chairman Brooksley Born so as to make the world safe for OTC derivatives.
“The moratorium was a huge victory for Wall Street,” Robert Stowe England writes in his new book, Black Box Casino. “And a big win for Rubin, Summers and Greenspan,” though he rightly notes that Levitt later expressed regrets over his actions. But not Larry Summers, a man for whom ideology has never gotten in the way of the practical necessities at a given moment in time. He rolls in his own mess, in political terms you understand, and then expects us to believe that it smells so very sweet. The latest case in point is seen as Summer prescribes solutions to the housing crisis.
In their book Reckless Endangerment, Gretchen Morgenson and Josh Rosner describe in vivid detail how Larry Summers, Robert Zoellick and others bullied critics and won and influenced friends for Fannie Mae, one of the key Washington agencies that helped lead to the subprime debt crisis. Ed Demarco, now head of the agency that supervises Fannie and Freddie Mac, wrote a report in 1996 suggesting that the housing GSEs be privatized. But Summers bullied Demarco and other staffers, eventually forcing them to rewrite the entire document. The cost to the taxpayer of Summers’ intervention regarding the housing agencies is over $150 billion and climbing. And this number will climb dramatically after the 2012 election.
But perhaps one of the biggest indictments of Summers when it comes to his contribution or lack thereof to economic public policy is also his last, namely the advice to President Obama to do nothing about either the top-four zombie banks or the housing GSEs. By allowing the GSEs and the cartel they form with the largest four banks – JPMorgan, Wells Fargo, Citigroup and Bank of America – in the secondary market for home loans to deny millions of middle to lower income borrowers the opportunity to refinance, Summers has cost millions of Americans livelihood and security. I wrote about this issue in “Are the low US home mortgage rates for real?”
Summers deserves the censure of all Americans for his hideously bad advice to President Barack Obama regarding the housing crisis. First Summers told Obama not to restructure the largest zombie banks, the very same institutions that today deny millions of Americans their contractual right to refinance their mortgages.
Cassidy quotes Summers on Obama’s view of the big banks last year prior to his flight from the White House: “In the same spirit that the president did not want to take ownership of the banks, he has a healthy skepticism about schemes involving large government action and an awareness of the possibilities of unintended consequences.”
Second, Summers told the POTUS that there was no need to address the fact that tens of millions of American households are under water on their mortgages. As Laurie Goodman of Amherst Securities has noted, there is a cost to doing nothing. For Summers now to offer us advice on the mess he helped to create is quite outrageous.
“This guy and his crew from Harvard have fought me on this for the last three years when it comes to dealing with the home refinance issue,” notes one banking industry official who has argued for a government response to refinancing. “When we finally get the Obama administration to change their mind on dealing with under water mortgages, Summers pops up pretending to lead the parade.”
Bottom line is that Larry Summers has nothing to say about the housing crisis. His role in creating the catastrophe and pandering to the worst tendencies on Wall Street should rule him out of any attempt to fashion policy or a coherent history going forward. And for the media especially, you need to commit Morgenson & Rosner to memory as a lesson in the ways and means of Washington and people like Larry Summers.
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Your prejudices are misguided...why haven't you included Ken Lewis, Hank Paulson, the c-suite team from Wamu, Vikram Pandit and many others on your list? Is it because they are not Jewish? I am not Jewish and yes there are Jewish assholes, just like there are Christian assholes and Islamic assholes. No religion, race or creed has a monopoly on assholes. I'm not sure where you fit in, but one thing is certain: you are an asshole!
their spouses are,...
Vikram Pandit is a hidu arse hole.
Chris, as you've said in previous articles.. this guy is just part of the Rubin faction that has one single agenda: Destruction of all sovereign rights through economic collapse/currency devaluation. In the end, only the World Bank/UN may survive... independent nations be damned.
1: Pass law after the Great Depression to reduce the risk of another Depression by restricting commericial bank speculation.
2: Repeal the law that reduced risk of another depression because 'Banks are more responsible now'.
3: Another Great Depression.
4: "There is no one who could have seen this coming!"
Summersian Logic and Economics at its finest.
the mushroom cloud explosion in new Laws hasn't dented the slightest your faith that the Law will work then?
we have thousands of Laws (that don't work) but add a few more and things will correct themselves right?
another way of thinking is that the Law is a monopoly system run by monopolists to suppress the people and keep the people running the Law above the Law and out of harms way. Anarchists running (ruining) society... the crooks at the top of the food chain
Maybe if we give freedom (no Law) a chance rather than adding yet more red tape to an already patently failed (and corrupt) system... how about that?
Glass-Steagall Worked
As BofA shifts its worthless Merrill Lynch derivatives books onto its FDIC insured deposits side for a back door grab by the derivatives counter parties...
Counter Parties: Can you say Backdoor TARP for Goldman & JPM?
Your pals Jamie & Lloyd?
Some laws are needed. Like laws that keep fat cats with huge sums of inherited capital from their daddy's bubble era investments from using that capital to hire mercenaries to kill your wife and family because you cut his Masseratti off at a stop sign last night.
About time this fucktard Summers is mentioned in the same breath as the other criminal pisswit Geithner. Drag these scumbags from under their rocks and into the light of day.
we might like to ask Harvard University what Prof Summers is actually good at and expert in... other than fuking up the entire US housing market and financial system and leaving it a steaming pile of fraud ..maybe Summers is majoring in fraud, economic vandalism and political accountability now i think of it!
With very rare exceptions, they are all criminals, both war and otherwise.
I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to it.
A quote by this assVpay.
WOCTOO
(waste of carbon, thief of oxygen)
When the history of this administration is written, I think it will be astounding at just how incredibly many bad, horrible, just plain wrong and perhaps corrupt policy choices were made. We won't see it until Obama is well out of office because too many are still "reputational bodyguards", as someone put it. Larry Summers is just one of the criminals at the top. But don't forget Obama's boast about always being smarter than any of his advisors, no matter the subject.
I'm no fan of Barry, but where do you get your info on his claim to always being smarter? I've never seen that before.
It's from the Ron Suskind book, a very interesting read but I don't have the page citation because I have lent the book out. Larry Summers and Christina Romer, frustrated by Obama's rejection of their supposed basic economic theory for his own formulation. Apparently Obama claimed to know more than any of his advisors, on any given subject. Hubris?
Larry Summers has consistantly proven himself to be the biggest economic ass clown.
This thing we call an economy is nothing more, or less, than a bunch of paid off ass clowns working for once prestigous schools writng whatever drivel wall street criminals pay them to do as they rotate in and out of school, government and corporations.
I emailed Donald Graham and asked him how shit like this makes it in the paper.
As if I really don't know the corporate connectivity our mainstream media has.
Long live the economic blogs like 0H
Larry Summers is a consummate douche bag...Larry Summers is the Lindsay Lohan of competent economic policy...
You give Fat Larry far too much credit...
It would seem he's a criminal relative to every state and local budget...which considering the egos to begin with "throwing Peoria under the bus" is just a given. The fact is we all run out of ideas at some point. That's why "change" is no slogan. It's coming whether we want it to or not. So your solution is to give New York a couple of trillion dollars? Now what? The irony of course is that's how it always used to be done. Perhaps if you called him "un-original" as with all the rest of them.
Are you fucking kidding me? Hell yes. Come on, really? Taking credit for the work of others is what being in academic administration is all about. Same old same old.
I know he's an asshole...maybe a war criminal one.
Yes. Henry Kissinger is a war criminal. And, several other things.
You are right Henry Kissinger is a true war ciminal and deserves to be tried in the Hague.
Larry Summers is just a grandiose academician who believes his own bullshit and thinks others should too. He's not even close to being in the same class, page etc as Henry Kissinger.
MF off 45% at 2.00 WTF POOF! Another Goldmanite/NJ Gov destroys the world...I am sure they will put the drop in bonds against earnings...LOL LOL LOL OMG IDK OMG WTF whatever!!