Who Is Larry Summers?:
Summers is now the Charles W. Eliot University Professor at Harvard University President John F. Kennedy School of Government. He is a director of hedge fund D. E. Shaw, has worked for Citigroup, and is on the board of two start-ups. Summers contributes to the Financial Times and the Brookings Papers on Economic Activity.
The NEC is part of the Executive Office of the President. It was created in 1993 to be the top advisory clearinghouse for the President on economic issues. 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 next Director of the NEC was Gene Sperling, who was Director under President Clinton. Obama replaced him in 2013 with former OMB Deputy Director Jeffrey Zients.
Why Was Summers Controversial?:
Summers also sided with Ken Lay and Enron during the California energy crisis, even after some economists raised concerns about market manipulation. (Source: Daily Kos, Handy Comparison Chart Janet Yellen vs Larry Summers, August 7, 2013)
Summers is not above name calling. He said the current Governor of the Reserve Bank of India, Raghuram Rajan, was a Luddite in 2005. That's because Rajan correctly warned about the dangers of the 2008 financial crisis at an annual Symposium of central bankers.
Would Summers Make a Good Fed Chair?:
Summers has never held a position within the Federal Reserve itself. Since it oversees bank regulations, there has been concern that he would not be willing to enforce them on companies that he used to consult with, such as Citigroup. In fact, he opposed the Volcker Rule that is a critical element of the Dodd-Frank Bank Reform Act.
Summers was the 27th president of Harvard University from 2001-2006. He was criticized for remarking 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:
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. He was Chief Economist of the World Bank from 1991-1999.Article updated September 13, 2013