Larry Summers

[Magda Hassan]

Endless Summers


Throughout his dazzling but controversial career—top World Bank economist, Treasury secretary, Harvard University president, and now head of the White House National Economic Council—Larry Summers has been his own worst enemy. As friends, colleagues, and Summers himself try to explain his reputation for arrogance, bullying, and insensitivity, the author learns about his more private battles, and why many believe he’s still the M.V.P. in any financial crisis.

[B]By William D. Cohan


December 2009
[/B]


Larry Summers in his West Wing office, two short flights of steps above the Oval Office. Photograph by Steve Pike.

Larry Summers is not an easy man to catch off guard. Behind his rumpled, jowly, professorial façade hides the world’s shiniest gold-plated résumé and one of its fiercest intellects. No less an authority on presidential power than Henry Kissinger once told Tim Geithner, now the Treasury secretary, that Summers should have a permanent job at the White House, solely to sort out for the president—any president—the good ideas on economic policy from the dumb ones.
When Barack Obama was elected, many thought that Summers, who headed Treasury during the final 18 months of the Clinton administration, would find his way back to that post. But inside the Beltway, Summers’s connections to New York hedge funds and his rocky tenure as the president of Harvard University, from 2001 to 2006, were of concern, and it was decided that Geithner, Summers’s former colleague at Treasury and the president of the Federal Reserve Bank of New York (a job he got in 2003 with Summers’s help), would be more easily confirmed by the Senate. But since Geithner goes back some 10 years or more with Summers and seems to think five minutes with Summers is worth an hour of most other people’s time, there is little evidence that Summers lacks for influence in his current post as director of the White House’s National Economic Council.
View Vanity Fair’s Obama White House Portfolio, photographed by Annie Leibovitz.

Wedged into a faded-yellow upholstered wingback chair in his cramped White House office—two short flights of steps above the Oval Office—Summers is not yet, just before noon, in full pontification mode, even though he’s been up for hours and is fully caffeinated. His ubiquitous can of Diet Coke is perched an arm’s length away, on the edge of his desk behind his multiple computer screens. Two empties are scattered elsewhere. His kinetic, amped-up energy fills the small room, and, as usual, he has little time for the social niceties. Ask whether the odds favor the Boston Red Sox—in first place in the American League East on July 4—to make the playoffs this season and he shoots his press attaché, Matt Vogel, a withering look. The Great Oz has clearly expected a weightier question—about when the recession will end, or whether health-care reform will pass Congress. Indicating Vogel, he says, “He doesn’t know what you’re talking about. He doesn’t know where this is coming from, I’ll bet. You’re referring to the teams that are ahead on July 4 normally winning the pennant, even when they have a relatively small margin, like the Red Sox do.”
When Summers was a sixth-grader, at Penn Valley School, in Lower Merion, Pennsylvania, he spent part of his summer riffling through the microfilmed sports pages of old newspapers and magazines dating back to 1930, in order to determine if there was any correlation between where a team was in the standings on Independence Day and whether that team eventually made the playoffs. His parents—Robert and Anita, then economics professors at, respectively, the University of Pennsylvania and Bryn Mawr College—had encouraged him in his quirky mission and helped him calculate the odds. As the Vietnam War was heating up in October 1965, the Philadelphia Bulletin described Summers as “the most qualified 11-year-old odds maker” in baseball.
Calculating the odds of making the playoffs is very different these days, Summers tells me, warming to the topic, given the introduction over the years of divisions within leagues and the advent of the wild-card spot, all of which makes it so that four teams in each league go to the playoffs instead of just one. Anyway, he concludes, “My proud father has chip-shotted that [anecdote] into profiles of me that have been written at various points, and that must be what you encountered.”
Summers has plenty of other things figured out as well, including the origins of the current financial crisis, for which he has crafted a cogent explanation worthy of his reputation as a policy wonk and his days as a college debating champion at M.I.T. “I think crises like this get made by multiple cascading misjudgments,” he explains, and then catalogues them: too much government spending, not enough private-sector saving, too much dependence on foreign debt, too much demand for “riskless” financial instruments that weren’t, in fact, riskless …
By the time he’s finished, he’s barely breathing, the words are tumbling from his mouth so quickly. But then he sums it all up in his trademark way of making the complexities of economics and finance comprehensible to mere mortals: “The classic stories about markets are where, if the market for wheat goes down, people plant a little wheat. People demand to eat a little more bread, and the thing self-stabilizes. But it was [economist John Maynard] Keynes’s central insight that it’s not always that way. And it’s not always that way in particular because leverage [i.e., borrowing] can create situations where, when prices fall, then people have to sell, and so they fall faster. When asset prices fall, capital values fall, and, therefore, people are in less of a position to lend, and, therefore, other people are forced to sell. And there’s a whole set of these vicious cycles. You can also have a change in gestalt where people who had perceived things as safe all of a sudden move things from the concept of being safe to the concept of being risky, and if they’re risky, they don’t want to hold them. And so you see a large scale of abandonment. And I think in one way or another the leverage, the vicious cycle, the change in gestalt, the unwinding—that’s the financial crisis.”
Summers had a pretty good handle on the crisis even as it was unfolding. Ten days before the collapse of Bear Stearns, in March 2008, he said in a speech at Stanford University, “We are facing the most serious combination of macro-economic and financial stresses that the U.S. has faced in a generation and possibly much longer.”
But while the housing and mortgage bubbles were busy inflating a few years back, Summers was convalescing after his tortured departure as Harvard’s president, in June 2006. He had resigned that February in the face of a second no-confidence vote the Harvard faculty was prepared to deliver. The first had come a year earlier, following his impolitic and ill-advised—but severely taken out of context—comments about a lack of scientific aptitude among women. Summers had spoken at a private conference from notes, so there is no transcript of the speech. But afterward an M.I.T. professor provided snippets of it to a Boston Globe reporter, and a media frenzy ensued. Summers told The Harvard Crimson, “Everyone agrees that working toward gender equity is vitally important,” and discrimination must be faced “head-on.” But, he said, academics must also conduct “careful, honest, and rigorous research” to understand why women are too often under-represented in certain professions. “My speculations were intended to contribute to that process,” he said, but he has also admitted making the speech was a mistake.
That wasn’t his only mistake at Harvard. In fact, people there have so many complaints about him it is difficult to know where to begin. Along with his ambitions to vastly expand the campus into Allston, displacing working-class residents from an affordable neighborhood, and to revamp the undergraduate curriculum by boosting the role given to the sciences, he also was said to have insulted, in addition to women, many of the diverse communities at the school—from blacks to gays to Hispanics. He was criticized for his uncouth per*sonal style—from toothpicks dangling from his mouth to stocking feet up on his desk during meetings—for cutting off questioners in midstream, and for his tendency to look right through people while they talk. There was also his tone-deaf willingness to autograph for students dollar bills that already had his signature on them (from when he was Treasury secretary) and to replace his predecessor’s “aging Lincoln” with a brand-new Town Car. “That shiny black sedan soon started popping up all over campus, with Summers’s chauffeur waiting patiently inside, sometimes for hours at a time,” wrote Summers’s erstwhile biographer, Richard Bradley, who chonicled many of Summers’s perceived foibles at the university and elsewhere in Boston magazine and in his 2005 book, Harvard Rules.
After leaving Harvard, Summers signed on at D. E. Shaw, a $29 billion hedge fund, which gave him his first real-world taste of the psychological—as well as economic—dilemmas confronting traders on a daily basis. (He also got a taste of Wall Street compensation, receiving $5.2 million in 2008 working just one day a week.) The D. E. Shaw gig followed being on the board of advisers of Taconic Capital Advisors, a hedge fund founded by Goldman Sachs alumni Frank Brosens and Ken Brody. And for a total of $2.7 million in 2008 he was also giving regular and high-priced speeches to corporate America. (For instance, in April 2008, Summers spoke at Goldman Sachs, for $135,000; in February, he spoke at J. P. Morgan, for $67,500; in April, he spoke at Leh*man Brothers, for $67,500; and in May, he spoke at Siguler Guff, a New York–based hedge fund, for $67,500.)


Yet Summers has triumphed over his Harvard controversies and the charges that he grew too close to the financial sector. The hand—and mind—of Larry Summers can be found in the $819 billion stimulus package, in the bailouts of Chrysler and General Motors, and in the legislation still under consideration in Congress that would reform both health care and Wall Street regulations. And he’s just getting revved up.
Nowadays, after leading a briefing for the president every morning on the economy—called the “economics P.D.B.” (for “President’s Daily Brief”)—he spends his time with his team of around 25 staffers and his colleagues—who include Geithner, chair of the Council of Economic Advisors Christina Romer, head of the Office of Management and Budget Peter Orszag, and Austan Goolsbee, an economist on the Council of Economic Advisors—trying to craft policies to deal with the aftermath of the meltdown. “The good thing about us is we’ve known each other for a really long time, and we’re completely comfortable disagreeing with each other,” Geithner says of his symbiotic working relationship with Summers.
Nobel Lineage

Summers is part of a generation of gifted Philadelphia-area Jewish boys, which includes private-equity mogul Steve Schwarzman and Revlon C.E.O. Ronald Perelman, who went on to make it big on the national scene. Unlike with Schwarzman and Perelman, who made billions in finance, the tug of Summers’s DNA was to academia and, specifically, to the study of economics. Not only are both his parents economists, but he is also the nephew of two winners of the Nobel Prize in Economics: Paul Samuelson (his father’s brother—Summers’s father changed the family name from Samuelson) and Kenneth Arrow (his mother’s brother). Larry, the oldest of three boys, alone among them chose to study economics. (The middle brother, Rick, is a psychiatrist in Bryn Mawr and a professor of psychiatry at Penn; his youngest brother, John, is a litigator at the law firm of Hangley Aronchick Segal & Pudlin, in Philadelphia.) “My father was an incredibly intellectual deep thinker with no ego,” Rick Summers recalls. “He was about ideas and about his work and about exploring things and about research. My father inspired Larry. They spent a lot of hours together, my father taught him a lot, and I think Larry just got incredibly naturally interested in what my father was interested in and took off from there.”
In 1971, at age 16, Summers applied to Harvard but was rejected. Instead, he matriculated at M.I.T.—a few miles and a world away from Harvard but one of the few elite universities at that time that could contain his prodigious intellect. At rapid-fire speed, he began the construction of a C.V. that is now 13 pages long and counting.
At first, he was a math major, but he realized quickly he was out of his element. He switched to economics and, as a sophomore, started working as a summer assistant to conservative Harvard economics professor Martin Feldstein, who would become one of his lifelong mentors. In 1974, Summers applied again to Harvard, this time for the doctoral program in economics, and this time the university accepted him.
While working on his dissertation Summers met Victoria Perry, who had studied economics at Yale and had moved to Cambridge to get acclimated before beginning Harvard Law School. Perry, who was once described as looking like she’d stepped out of an L. L. Bean catalogue, grew up an only child in Maine, where her mother was a math professor at the University of Maine and her father a stockbroker in a small firm in Bangor. She and Summers had mutual friends and, at first, hung out together as part of that group; then, in 1980, they started dating. “He was really smart and funny, interesting, and just a really good person,” she recalls.
At 28, Summers became one of the youngest tenured professors in Harvard’s history. He was on a superstar’s trajectory.
And then near tragedy struck. For two months, he had been nursing a persistent fever. At first, doctors at the Harvard health service told him it was nothing to worry about. But as his body temperature remained at or above 102 degrees, his parents insisted he get a second opinion. His blood was tested. “My blood counts were all off,” he recalls. He then had a bone-marrow test. “Do not pass go—you’re going from the doctor’s office to the hospital,” he was told. It took a while, but eventually he was diagnosed with late-stage Hodgkin’s disease. He had nine months of chemotherapy. “It was obviously terrifying,” he says.
He grappled with the news by remaining extremely focused on the study, writing, and teaching of economics. “If you looked at the list of publications,” he points out, “and you said, ‘What year was he sick?,’ you would not be able to tell. And that wasn’t because there was anything heroic about me. It was because the only way to kind of keep the stuff at bay was just to focus on my work and to focus on being around people.”
Summers, who remains cancer-free, credits the experience with giving him an ongoing interest in the study of the life sciences (a curriculum he advocated at Harvard) and in the promulgation of health-care-policy reforms, and, above all, a healthy appreciation of the fragility of human life and the special burdens put on the less fortunate. “The weak need you more than the strong do,” he says. “The feeling of extreme vulnerability that I had during that experience caused me to be more attentive to the people who are on the vulnerable side of the ledger.”
Toxic Shock

In 1984, soon after his cancer diagnosis, Summers and Victoria Perry were married at the elegant Harvard Club on Commonwealth Avenue, in Boston. Both a rabbi and a Congregationalist pastor presided at the ceremony, in front of about 150 of their friends and family. By this time, Victoria was a tax lawyer at Hale & Dorr, the old-line Boston law firm, and Larry was teaching at Harvard. Having looked into the abyss, Summers also became—if possible—even more professionally impatient. The economics papers and articles started pouring out of him, around 100 or so during the rest of the 1980s. In 1993 he won the John Bates Clark Medal, as had Samuelson, Arrow, and Feldstein before him. The award, now given every year, recognizes the work of an American economist under 40. Even though some rival economists questioned the depth and breadth of Summers’s insights into economics—some think him best at taking the ideas of others and articulating them with more aplomb—and wondered whether he would ever reach his uncles’ level of achievement, he could easily have soldiered on at Harvard in his capacity as the Nathaniel Ropes Professor of Political Economy.
But somewhere along the way Summers caught the bug of wanting to convert his economic theories into real-world solutions. In early 1988, along with Robert Reich, another Harvard professor, Summers was a regular—but unpaid—economic adviser to the Democratic presidential campaign of Michael Dukakis, the governor of Massachusetts, whom Summers knew from the neighborhood. “[Summers and Reich] were first among equals,” explains Gene Sperling, then one of Dukakis’s chief campaign aides and now counselor to the secretary of the Treasury, “and hungry to be involved.”
Summers was more than a bit wonkish, arguing that Dukakis should make proposals about copyright law or reforming gatt, the General Agreement on Tariffs and Trade. Finally, one day Dukakis blurted out, “Larry, gatt schmatt!” And that was the end of that. (“Larry likes to tell that story,” Sperling says.)
In the rough-and-tumble of the campaign, Summers met a new set of political allies, such as Sperling, George Stephanopoulos, Laura D’Andrea Tyson, and, most important, Robert Rubin, then a vice chairman at Goldman Sachs, all of whom would become lifelong friends. “It’s amazing how much goes back to that Dukakis campaign,” Sperling says. In 1991, Summers decided to leave Harvard to become the chief economist at the World Bank. (In the move to Washington, Perry got a job as a lawyer at the International Monetary Fund.) In December 1991 he signed and circulated a memorandum—written by a young World Bank economist, Lant Pritchett—that caused Summers no small amount of future heartache. In the memo, which was meant to be a satire on the scale of Swift’s “A Modest Proposal,” Pritchett wrote, “Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs [Least Developed Countries]?” He then gave three reasons for his conclusion, among them: “A given amount of health impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. 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 that.” A predictable firestorm accompanied the leak of the memo. Despite Pritchett’s offer to fall on his sword, Summers took the heat himself. World Bank president Lewis Preston called the memo “outrageous,” and Summers had to apologize publicly. “I think the best that can be said is to quote La Guardia and say, ‘When I make a mistake, it’s a whopper,’ ” Summers said at a March 2001 press conference when asked about the memo.


When Clinton won the presidency in 1992, many thought Summers would get the post Dukakis had slated for him: chairman of the Council of Economic Advisors. But “the toxic-memo scandal,” as it became known, loomed over his appointment. Laura Tyson got the job instead. Summers had to make do with an appointment as undersecretary of the Treasury for international affairs. (Geithner would have this job after Summers.) When Rubin became Treasury secretary, in January 1995, after two years serving as director of the National Economic Council, a post created by Clinton especially for him, Summers’s career finally got uncorked when Rubin promoted him to deputy Treasury secretary. The two men’s styles couldn’t have been more different—the low-key former Goldman Sachs co-chairman and arbitrageur with a penchant for consensus building, and the Harvard economics professor with the platinum DNA, encyclopedic memory, and legendary impatience—but, in the great tradition of Felix Unger and Oscar Madison, this odd couple, too, made it work in splendid fashion. Together, they tackled the Mexican financial crisis in 1995, the Asian one in 1997, the Russian one—which almost led to the near end of the world—and the Long-Term Capital Management crisis, both in the fall of 1998, the whole time presiding over one of the great booming economies in American history. The apotheosis came perhaps in February 1999, when Time put Rubin, Summers, and Fed chairman Alan Greenspan on its cover—Summers looking formidable behind Greenspan’s left shoulder—under the headline the committee to save the world, since that is exactly what they appeared to have been doing for so long.
Rubin credits Summers with making a “tremendous, tremendous intellectual contribution” to the Mexican crisis, which “people don’t remember so much now.” And he cites Summers’s willingness during intense discussions with President Clinton and other advisers to make sure the real-world consequences of policy proposals were being considered. “There’d be political people around the table, and Larry absolutely related to the political dimensions of things,” Rubin says, “but he had a tremendous seriousness of purpose, and he would always be one of the forces to bring the conversation back to ‘Yeah, that’s all important, and we can get some publicity or whatever, maybe. But what does it really mean? What are the long-term consequences? What effects will that have?’ And then he combined that with an ironic sense of the world. I think that’s a terrific combination.”
During these years, Summers and his wife had three children, who were raised Jewish: twin girls, Pamela and Ruth, born in 1990, and Harry, born in 1993. Understandably, between two high-powered jobs and three young children, the demands on both parents were enormous. Domestic chores were not Summers’s thing—he doesn’t cook or clean up much, although he would help do the dishes. “He took direction well,” Perry says dryly. Over time, though, they drifted apart. Perry does not care to discuss how this happened. For his part, Summers has rarely spoken of the dissolution of his marriage. “There are trade-offs in life,” he has said. “You can’t be negotiating through the night to prevent Mexico from going bankrupt and tucking your kids into bed that night.” He concedes, though, “There are choices that if I had to do again I would do differently.”
The couple separated in 2001, and their divorce was finalized in 2003. Perry took back her maiden name and—ironically—converted to Judaism. She has not remarried and says she has no regrets about her years with Summers. “Yes, certainly I’m glad that we were married,” Perry says. “We still talk regularly. And he’s still a good friend.”
School for Scandal

Upon Summers’s arrival back at Harvard, as its 27th president, and after having had a brief fling with conservative talk-show host Laura Ingraham, Summers was introduced by his friend and Harvard colleague Ken Rogoff to Lisa New, a recently separated Harvard English professor with three young children of her own. But there had to be a little orchestration of their initial meeting. New recalls that Rogoff’s wife, Natasha, “told me that he was the president of Harvard and he couldn’t go around hitting on faculty, so if I wanted to meet him I would have to call him.” With that resolved, they started talking on the phone, at first “for about three days” straight, and she was completely won over by him. “We had these marvelous, marvelous hours-and-hours-long conversations before we met,” she says. “He’s a really great talker. He’s a wordsmith. He’s very clever. His vocabulary for an economist is rich and surprising, and he’s really funny and just ferociously smart, and he loves the phone.” They decided to take the next step and meet in person for a date, which she decided should be at the fancy Persian restaurant Lala Rokh, on Beacon Hill, in Boston. Turns out Summers has little conception of time and is chronically late. He thought he could finish giving a speech at Harvard and somehow get to Beacon Hill in 10 minutes. “Larry’s always miscalculated time,” New says. “And he was quite late.” Still, they clicked from the first moment. They both come from “big, warmhearted” Jewish families in Philadelphia, she points out, and despite the differences in their intellectual disciplines, their chemistry was immediate. Engaged in October 2005, they were married two months later.
But these were the difficult years when Summers was having almost daily skirmishes with the Harvard Faculty of Arts and Sciences. Cornel West, then one of only 21 “university professors” at Harvard, had a major run-in with Summers early on. According to West and various contemporaneous accounts, in a first meeting Summers accused West of everything from spending too much time making hip-hop records to grading too easily, to missing classes when he was working on the ill-fated presidential campaigns of Bill Bradley, Ralph Nader, and Al Sharpton. Summers claimed that West had not published enough, when he had, in fact, written 15 books and edited 13 others. When the dispute hit the papers, West asked for a second meeting to try to clear the air. In that meeting, they actually had a “wonderful four or five minutes,” West says, when the two men shared their very personal fears and experiences with cancer. West had been recently diagnosed and thought he had only a few months to live, and he spoke to Summers about his fears for his family. “And he spoke about his mother in very moving ways, and I said to myself, Wow, I think we’re coming together. This is really fascinating,” West recalls. According to West, Summers apologized, and West says he told Summers he appreciated the apology “because I don’t think this has to be an ugly ad hominem affair. But I refuse to be disrespected. That’s the kind of man I am, that’s the kind of black man I am. I just won’t be disrespected.” They shook hands and parted. “I thought everything was cool,” West says.
The next day, The New York Times had the story of their second meeting, but with a line about how Summers had not apologized. West called Summers to try to understand how the account of their meeting had gotten so distorted. According to West, Summers told him that of course he had apologized and was unsure where the Times’s account had come from. West then spoke with people he knew at the Times and discovered, he says, that Summers had insisted to the paper he would not apologize. West was incensed. “That’s when I came out and said, ‘He’s a bull in a china shop’ and the ‘Ariel Sharon of higher education.’?” At that point, “all hell broke loose,” West says. He was accused of being anti-Semitic, and the story went viral. He responded that he was not anti-Semitic but rather was “just being honest,” because Summers was “untrustworthy,” was “unprincipled,” and “lacked character and integrity.” West quickly decided he had to leave Harvard. He resigned and returned to Princeton University, where he is a tenured professor.
West says he was not surprised when Summers resigned from Harvard, but he said he was “just shocked and stunned” when Obama selected Summers to be the head of the National Economic Council, instead of such economists as Paul Krugman, his Princeton colleague, or Joseph Stiglitz, a professor at Columbia and a Vanity Fair contributor (both of whom are Nobel laureates). West believes Obama must have decided that Summers would be more acceptable to the Establishment and to Wall Street. But he also believes that an opportunity may have been lost by putting Summers in that important seat.
“I think that both as Harvard president and now as head of the National Economic Council that with Summers you have this tension between braininess and a certain lack of long-term vision,” West says. “And I really believe we need some long-term vision right now. The smartness and the brilliance, on the one hand, is fine, but I feel like you also have to treat others with a courtesy or a civility or even a decency at times.” (Summers wouldn’t comment on the West affair.)


There were also charges of betrayal from Iris Mack, a former derivatives specialist at the Harvard Management Company (responsible for investing Harvard’s endowment) and the second black woman to receive a doctorate in applied mathematics at Harvard. Mack claims that soon after she started working at Harvard Management, in early 2002—after a stint at Enron—she became uncomfortable with the lack of understanding she thought her colleagues had with the risky derivatives they were investing in. (She was proved correct in the past fiscal year, when the endowment dropped 27.3 percent.) On May 12, 2002, she wrote an e-mail to Summers, alerting him to her concerns: “As a proud Harvard alum I am deeply troubled and surprised by what I have been exposed to thus far at HMC, and the potential consequences for my alma mater’s endowment. In addition, I strongly believe that if my fellow alum[s] knew how the endowment is being managed and the caliber of some of the portfolio managers, they probably would not give another dime to our endowment.”
View Vanity Fair’s Obama White House Portfolio, photographed by Annie Leibovitz.

She asked Summers for a meeting and that he keep the correspondence between them confidential, “especially due to th[e] fact that several individuals have been terminated from HMC when they raised concerns about such issues.” Nine days later, Mack got an e-mail from Marne Levine, Summers’s chief of staff at Harvard (and now his chief of staff at the National Economic Council), asking Mack to contact her and assuring her that the initial e-mail “remains confidential.”
But not for long. A month later, she was confronted by Jack Meyer, then head of H.M.C., who had copies of her correspondence with Summers and Levine. Meyer fired her the next day. She has since reached a confidential settlement with Harvard that she won’t discuss. But she is unequivocal about one thing. “I would say that there is 99.9999999999999999 percent probability that Summers had a hand in my departure,” she wrote me in an e-mail. (Summers replies he had nothing to do with her firing and could not, because she did not work for or report to him. “[Mack’s] allegations were the subject of thorough internal and external reviews and found to be without merit,” says a Harvard spokesman.)
Much has been made of how Rubin has helped Summers sand down his sharp elbows. Rubin deflects questions about any such role, pointing instead to Summers’s ability to summarize quickly and articulately a variety of complex policies for important people. He saw Summers do this for Senator Obama repeatedly during the summer of 2008. “He wasn’t good,” Rubin says of Summers. “He was terrific. I think what [Obama] saw in Larry is what so many people have seen in Larry: not just a very bright guy, but a guy who sees many different dimensions of issues, sees the competing points of view, can hold the competing points of view in his head at the same time, will keep sort of relentlessly searching to see if there’s some better way of looking at something. And I know what Obama saw because he was talking to me about it. And he wanted that in his White House.”
Summers is quick to acknowledge all that Rubin has done for him, and he is impressed especially with Rubin’s ability to get colleagues to consider why a course of action should not be pursued, even as they were advocating for that course of action. “I now do that routinely,” Summers says. “I learned something about the importance of making everybody feel comfortable speaking up with a view, and sort of watched the way he created a culture of decision-making. I think I’ve had to learn that not everybody feels as free speaking up as I might have when I was young. And so you have to be conscious of creating an environment where people feel comfortable in disagreeing with me.” He says his new wife has “mellowed” him as well. “Being married to a student of poetry may not have me smelling the flowers, but it may have me ignoring them a little less,” he says.
And yet the stories of Summers’s impatience and bullying persist. A June 2009 front-page New York Times article referred to Summers as both “brilliant” and “supercilious” and cited run-ins he has had with Geithner, Orszag, Romer, and Goolsbee—the last over whether the government should participate in the bailout of Chrysler. According to the article, Summers got so upset during a clash with Goolsbee that he “stormed from” the meeting and then excluded Goolsbee from the subsequent meeting with the president, although he did include Goolsbee’s argument in a memo prepared for Obama. But those who know Summers best believe these stories badly misrepresent the man. Summers just wants to do the right thing in any given situation, they say, and uses his debating skills and Socratic methods to try to elicit the best solutions from his colleagues. “He’s one of the best listeners I’ve ever known,” says Rubin. “But if you only see him once a month or once a year or whatever, you may see the challenging side and not realize that what really is going on is just a part of his style.”
Sheryl Sandberg, the chief operating officer of Facebook, was Summers’s chief of staff for four years at the Treasury Department and also worked for him at the World Bank. She, too, thinks Summers has been unfairly criticized over the years. “I think his directness is a huge asset,” she says. “You always know exactly where you stand with Larry. He pulls no punches. He does nothing behind your back. He literally tells you to your face, if you are working for him and if he thinks you did a great job, he says, ‘You did a great job.’ If he thinks you did a bad job, he says, ‘Try harder and let me help you try harder. I don’t think you quite understood what you needed to do here. Let me help you.’?”
Nowhere has Summers been more thoroughly misunderstood, Sandberg believes, than after his infamous speech about women and science. “What few seem to note is that it is remarkable that he was giving the speech in the first place—that he cared enough about women’s careers and their trajectory in the fields of math and science to proactively analyze the issues and talk about what was going wrong,” she wrote on the Huffington Post. “To conclude that he communicated poorly—and even insensitively—is fair. To conclude that he is opposed to progress for women overlooks the fact that improving this progress was precisely the subject he was addressing.”
But not everyone in Summers’s high-powered circle thinks he is misunderstood. For instance, Tim Geithner, the Treasury secretary: “Larry has not had the jobs he’s had because he’s misunderstood. He’s had them because some of the best leaders in our country understand quite well how much he has to offer.”
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