{"id":1746,"date":"2009-10-18T08:45:24","date_gmt":"2009-10-18T12:45:24","guid":{"rendered":"http:\/\/shermandorn.com\/wordpress\/?p=1746"},"modified":"2009-10-18T08:45:24","modified_gmt":"2009-10-18T12:45:24","slug":"the-curious-case-of-larry-summers","status":"publish","type":"post","link":"https:\/\/shermandorn.com\/?p=1746","title":{"rendered":"The curious case of Larry Summers"},"content":{"rendered":"

Okay, maybe I can’t let well enough alone on economics. About a decade from now, someone will have both the material and distance to write a fabulous biography of Larry Summers. On one level, he is a brilliant economist. At another level, he has been a total MF<\/a>, and at Harvard the financial games and the Schleifer scandal are worse than his noncollegial style and tendency to say tremendously stupid things in public. I think he clearly has matched Bill Clinton on the “fast thinker with a deep mental problem” scale. The extent of all this is unknown at the moment. We have some interesting pieces by Ryan Lizza<\/a> on his role on the White House economic team, Vanity Fair<\/a> on the collapse of Harvard’s endowment, and evolving coverage of what was clearly a bone-headed move in interest swaps* that the Boston Globe reported Friday<\/a> but bloggers had uncovered in the summer<\/a> (as Margaret Soltan explains<\/a>). I know that Mark Ames tried to put things together<\/a> last fall on Summers, but events move faster than journalists and sometimes you need a real historian and real time to put things in perspective.<\/p>\n

When that time comes, you’ll need someone with financial acumen and knowledge of higher education, as well as politics. That will be an interesting challenge, but I look forward to reading the Summers biography when it eventually comes out. If you’re 13 years old and looking for a great dissertation topic, here’s the one to keep in mind!<\/p>\n

* In response to a colleague’s concern many months ago about swaps, I looked at the interest-swap agreements of my own university. Mind-numbingly dull and mundane, they were the ordinary kind where the university bonded out debt at variable-rate interest and then turned around and agreed with a bank to pay the bank a fixed rate in return for the bank covering the variable-rate interest on the bond. It’s a hedge against inflation, and because interest rates can’t go below zero, the ordinary interest-rate swap looks like it has a limited liability. What Summers did at Harvard was different: Apparently Harvard agreed to interest-rate swaps on debts that Harvard would not incur for years and years. <\/p>\n

** The swap-swashbuckling was compounded by the other bone-headed move<\/a> of investing operating funds in less-liquid, more-risky investments. <\/p>\n","protected":false},"excerpt":{"rendered":"

Okay, maybe I can’t let well enough alone on economics. About a decade from now, someone will have both the material and distance to write a fabulous biography of Larry Summers. On one level, he is a brilliant economist. At another level, he has been a total MF, and at Harvard the financial games and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[12,14],"tags":[],"class_list":["post-1746","post","type-post","status-publish","format-standard","hentry","category-higher-education","category-history"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pag0MB-sa","_links":{"self":[{"href":"https:\/\/shermandorn.com\/index.php?rest_route=\/wp\/v2\/posts\/1746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/shermandorn.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/shermandorn.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/shermandorn.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/shermandorn.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1746"}],"version-history":[{"count":0,"href":"https:\/\/shermandorn.com\/index.php?rest_route=\/wp\/v2\/posts\/1746\/revisions"}],"wp:attachment":[{"href":"https:\/\/shermandorn.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/shermandorn.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/shermandorn.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}