Who Is Larry Summers?:
Lawrence H. Summers was appointed by President Obama
to be Director of the National Economic Council (NEC) from 2009-2011. The NEC was created in 1993 to be the top advisory clearinghouse for the President on economic issues. Summers was the 27th president of Harvard University from 2001-2006. He was Treasury Secretary
from 1999-2001 and Chief Economist of the World Bank
from 1991-1993. Summers is now the Charles W. Eliot University Professor at Harvard University John F. Kennedy School of Government.
Why Is the National Economic Council Important?:
The NEC is part of the Executive Office of the President. It has four functions:
- Coordinate policy-making for economic issues.
- Coordinate economic policy advice for the President.
- Ensure that policy decisions and programs are consistent with the President's economic goals.
- Monitor implementation of the President's economic policy agenda.
Members of the NEC come from numerous department and agency heads within the administration, whose policy jurisdictions impact the nation's economy. The NEC has its own staff of policy specialists. The Director of the NEC is currently Gene Sperling, who was Director under President Clinton.
Was Summers Good for the Job?:
Summers had a lot of hands-on expertise in both the domestic economy, through his experience in the Treasury Department
, and the global economy, through his World Bank tenure. Treasury Secretary Tim Geithner
was Summers' protege at the Treasury Department before he took over as Chair of the New York Federal Reserve
. On the plus side, he was responsible for many of Obama's economic policies
in 2009. However, many blamed Summers for political infighting among Obama's economic team
, which could be one of the reasons he left in 2011.
Why Was Summers Controversial?:
During his tenure as Treasury Secretary, Summers oversaw the repeal of the Glass-Steagall Act
. This Act was established during the Great Depression
to prevent commercial banks from investing depositors' funds in risky derivatives
. He also advocated further deregulation of derivatives trading. Many experts blame the repeal of this act and deregulation for the banking credit crisis
and resultant recession
As Harvard President, Summers remarked that one of the important reasons that women were not prevalent in well-paying science and engineering positions was that men had more natural aptitude. The uproar over this apparent sexist statement led to his resignation from Harvard in 2006.
Summers' Early Career:
Summers has been a professor of economics at both Harvard and MIT. In 1988, he served as an economic adviser to the Dukakis Presidential campaign. From 1982-1983, Summers was on the Council of Economic Advisers under President Reagan
. A nephew of Nobel prize-winning economist Paul Samuelson, Summers received his bachelor of science degree from the Massachusetts Institute of Technology in 1975. He received his PhD in economics from Harvard in 1982.
In 1983, he became a tenured member of the Harvard University faculty -- one of the youngest in recent history. Summers became the first social scientist to receive the Alan T. Waterman Award of the National Science Foundation (NSF) in 1987, In 1993, he was received the John Bates Clark Medal, given every two years to an under-40 economist. Summers also contributes to the Financial Times and the Brookings Papers on Economic Activity, and is a director of investment firm D. E. Shaw.