Sep
22
2010

Larry Summers, the 'Anti-Business' Hedge Fund Director

The New York Times' Sheryl Gay Stolberg (9/22/10), writing about "brusque and brilliant economist" Lawrence Summers stepping down as President Obama's chief economic adviser, cited House minority leader John Boehner's charge that "Mr. Obama's team lacked 'real-world, hands on experience,' a direct shot at Mr. Summers' career as an academic." She followed this by writing, "News of Mr. Summers' departure set off speculation that Mr. Obama would replace him with a corporate executive to counter the impression that he is anti-business."

The Washington Post's Lori Montgomery (9/22/10) reported similarly, "Sources said the White House is considering whether to choose a candidate who could blunt criticism that the administration has been anti-business, such as a corporate chieftain or prominent investor."

This suggestion that Summers represents an "anti-business" strain of economic thinking is absurd. While it's true that most of his career has been spent in academia and government, prior to joining the administration he was working as a managing director at DE Shaw, a gigantic hedge fund that paid him $5.2 million for his services in 2008. In the same year, he collected $2.7 million in consulting fees from other financial firms, including Goldman Sachs, JP Morgan Chase, Citigroup, Lehman Brothers and Merrill Lynch. Clearly Wall Street was not turned off by his "anti-business" attitudes.

This background was rehearsed just yesterday in a New York Times blog post (DealBook, 9/21/10), which noted that "Mr. Summers has often been criticized for his close ties to the financial sector and dubbed a conduit for Wall Street to influence the White House." Such criticism does not seem to have been noticed by Stolberg.

After citing Obama's praise of Summers, Montgomery at least notes that "congressional Republicans–and some Democrats–have been more critical of Summers' tenure." But she goes on to say that Boehner accuses the White House "of pursuing misguided economic policies that ran up record deficits without creating jobs or significantly improving the economy"–a view, Montgomery says, that is rejected by "many prominent economists." The complaints that "some Democrats" have about Summers are left unspecified, the idea that there is anything "anti-business" about Obama's Wall Street-friendly economic adviser goes unrebutted.

About Jim Naureckas

Extra! Magazine Editor Since 1990, Jim Naureckas has been the editor of Extra!, FAIR's monthly journal of media criticism. He is the co-author of The Way Things Aren't: Rush Limbaugh's Reign of Error, and co-editor of The FAIR Reader: An Extra! Review of Press and Politics in the '90s. He is also the co-manager of FAIR's website. He has worked as an investigative reporter for the newspaper In These Times, where he covered the Iran-Contra scandal, and was managing editor of the Washington Report on the Hemisphere, a newsletter on Latin America. Jim was born in Libertyville, Illinois, in 1964, and graduated from Stanford University in 1985 with a bachelor's degree in political science. Since 1997 he has been married to Janine Jackson, FAIR's program director. You can follow Jim on Twitter at @JNaureckas.