This is what happens when you have a baby: You miss interesting Larry Summers news. (Thanks to the commenters below for helping me catch up on it. Keep the comments coming!)
Larry Summers rejoined the hedge fund DE Shaw “late last year,” according to the New Yorker’s (excellent) John Cassidy.
According to a person familiar with Shaw, he is spending about five to ten per cent of his time working for the firm, largely in an advisory capacity. Asked what sort of things Summers does, this person said he addresses standard macroeconomic questions—such as the likelihood of a revaluation in the Chinese currency—and also advises the firm on how to limit risk.
How to limit risk? The man who famously opposed the regulation of derivatives is now advising on how to limit risk?
Felix Salmon points out that Summers’ prior words on what would constitute influence-pedding now indict his own actions.
…according to Larry’s own logic in the answer he gave to Guru-Murthy, it’s perfectly reasonable, given the alacrity with which he accepted DE Shaw’s millions, to ascribe his actions in the Obama administration to loyalty to the financial sector. We now know that when Summers was giving this interview, he was already back at work for DE Shaw. Which is why he was so careful to confine his answer only to his activities during the Clinton years. If accused of being a creature of the revolving door during the Obama years, he could adduce no such defense: he literally left DE Shaw to join the Obama administration, and then revolved straight back into that job when his temporary government gig was over.
Here’s what I think: Summers is, um, risking the permanent loss of his credibility here; you can only whisk through that revolving door so many times. Certainly he’s not a serious economist any more—he’s a rent-a-pundit, impressing attendees at the Aspen Institute and Davos.
But Summers may not care that he’s now entered the buckraking phase of his career. He’s not an idiot: He must know that he’s not going to get any of the big public or quasi-public jobs that he once lusted after: chair of the Fed, head of the World Bank—he’s now been passed over for each. He’s already been Treasury secretary. Another university presidency is out of the question. What’s left?
The answer? Living large. What’s left is the relatively new terrain (for him) of the financial and technology worlds, and rising from someone whose worth is in the eight figures to someone whose worth is in the nine figures. (You can’t help but wonder if Sheryl Sandberg hasn’t sweetened the pot for Summers, Facebook-wise. After all, when she was at Google, he opened the door for Google to pillage Harvard’s libraries. Surely she has scratched his back in return.)
Money is a whole different kind of power than Summers has had in the past, and it comes, for the most part, without pesky critics like journalists and congressional committees and internal administration foes. Plus, you get to travel by private jet a lot—and Larry Summers has always liked doing so—you eat really well, you stay in amazing hotels, you make $75k for riffing for an hour (like the Harvard lectures you used to give, but much more lucrative!) but and you don’t have to hang around Cambridge very much.
Nice work if you can get it. But is it the only kind of work Larry Summers can still get?