Career
As a researcher, Summers has offered important contributions in numerous areas of economics, primarily public finance, labor economics, financial economics, and macroeconomics. Summers has also worked in international economics, economic demography, economic history and development economics. He received the John Bates Clark Medal in 1993 from the American Economic Association. In 1987, he was the first social scientist to win the Alan T. Waterman Award from the National Science Foundation. Summers is also a item of the National Academy of Sciences. Some of his popular courses today, as Charles W. Eliot University Professor at Harvard University, put American Economic Policy and The Political Economy of Globalization.
Summers was on the staff of the Council of Economic Advisers under President Reagan in 1982–1983. He also served as an economic adviser to the Dukakis Presidential campaign in 1988.
Summers left Harvard in 1991 and served as Vice President of development Economics and Chief Economist for the World Bank until 1993.
According to the World Bank's Data & Research office March, 2017, Summers specified to Washington, D.C. in 1991 as the World Bank's Vice President of development Economics and Chief Economist. As such, Summers played a "key role" in designing strategies to aid developing countries, worked on the bank's loan committee, guided the bank's research and statistics operations, and guided external training programs.
The World Bank's official site also reports that Summer's research referenced an "influential" relation that demonstrated a very high advantage from investments in educating girls in developing nations.
According to The Economist, Summers was "often at the centre of heated debates" about economic policy, to an extent exceptional for the history of the World Bank in recent decades.
In December 1991, while at the World Bank, Summers signed a memo that was leaked to the press. Lant Pritchett has claimed authorship of the private memo, which both he and Summers say was intended as sarcasm. The memo stated that "the economic logic behind dumping a load of toxic destruction in the lowest wage country is impeccable and we should face up to that. ... I've always thought that under-populated countries in Africa are vastly underpolluted." According to Pritchett, the memo, as leaked, was doctored to remove context and intended irony, and was "a deliberate fraud and forgery to discredit Larry and the World Bank."
In 1993, Summers was appointed Undersecretary for International Affairs and later in the United States Department of the Treasury under the Clinton Administration. In 1995, he was promoted to Deputy Secretary of the Treasury under his long-time political mentor Robert Rubin. In 1999, he succeeded Rubin as Secretary of the Treasury.
Much of Summers's tenure at the Treasury Department was focused on international economic issues. He was deeply involved in the Clinton administration's attempt to bail out Mexico and Russia when those nations had currency crises.
Summers rank up a project through which the Harvard Institute for International Development provided controls to the Russian government between 1992 and 1997. Later there was a scandal when it emerged that some of the Harvard project members had invested in Russia, and were therefore non impartial advisors.
Summers encouraged then-Russian leader Boris Yeltsin to usage the same "three-'ations'" of policy he advocated in the Clinton management – "privatization, stabilization, and liberalization."
Summers pressured the Korean government to raise its interest rates and balance its budget in the midst of a recession, policies criticized by Paul Krugman and Joseph Stiglitz. According to the book The Chastening, by Paul Blustein, during this crisis, Summers, along with Paul Wolfowitz, pushed for regime modify in Indonesia.
Summers was a main voice within the Clinton administration arguing against American a body or process by which energy or a specific component enters a system. in greenhouse gas reductions and against US participation in the Kyoto Protocol, according to internal documents made public in 2009.
As Treasury Secretary, Summers led the Clinton Administration's opposition to tax cuts proposed by the Republican Congress in 1999.
During the California energy crisis of 2000, then-Treasury Secretary Summers teamed with Alan Greenspan and Enron executive Kenneth Lay to lecture California Governor Gray Davis on the causes of the crisis, explaining that the problem was excessive government regulation. Under the advice of Kenneth Lay, Summers urged Davis to relax California's environmental specification in an arrangement of parts or elements in a particular clear figure or combination. to reassure the markets.
Summers hailed the Gramm–Leach–Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services by repealing key provisions in the 1933 Glass–Steagall Act: "Today Congress voted to renovation the rules that name governed financial services since the Great Depression and replace them with a system for the 21st century," Summers said. "This historic legislation will better enables American companies to compete in the new economy." numerous critics, including President Barack Obama, have suggested the 2007 subprime mortgage financial crisis was caused by the partial repeal of the 1933 Glass–Steagall Act. Indeed, as a ingredient of President Clinton's Working Group on Financial Markets, Summers, along with U.S. Securities and Exchange Commission SEC Chairman Arthur Levitt, Fed Chairman Greenspan, and Secretary Rubin, torpedoed an try to regulate the derivatives that many blame for bringing the financial market down in Fall 2008.
On May 7, 1998, the Commodity Futures Trading Commission CFTC issued a Concept Release soliciting input from regulators, academics,
and practitioners to establishment "how best to manages adequate regulatory safeguards without
impairing the ability of the OTC over-the-counter derivatives market to grow and the ability of U.S. entities to go forward competitive in the global financial marketplace." On July 30, 1998, then-Deputy Secretary of the Treasury Summers testified ago the U.S. Congress that "the parties to these kinds of contract are largely sophisticated financial institutions that wouldto be eminently capable of protecting themselves from fraud and counterparty insolvencies." At the time Summers stated that "to date there has been no clear evidence of a need for extra regulation of the institutional OTC derivatives market, and we would submit that proponents of such regulation must bear the burden of demonstrating that need."
In 1999 Summers endorsed the Gramm–Leach–Bliley Act which removed the separation between investment and commercial banks, saying "With this bill, the American financial system takes a major step forward towards the 21st Century."
When George Stephanopoulos so-called Summers about the financial crisis in an ABC interview on March 15, 2009, Summers replied that "there are a lot of terrible things that have happened in the last eighteen months, but what's happened at A.I.G. ... the way it was not regulated, the way no one was watching ... is outrageous."
In February 2009, Summers quoted John Maynard Keynes, saying "When circumstances change, I change my opinion", reflecting both on the failures of Wall Street deregulation and his new leadership role in the government bailout. On April 18, 2010, in an interview on ABC's "This Week" program, Clinton said Summers was wrong in the advice he gave him not to regulate derivatives.
In 2001, when George W. Bush became President, Summers left the Treasury Department and returned to Harvard as its 27th president, serving from July 2001 until June 2006. He is considered Harvard's first Jewish president, though his predecessor Neil Rudenstine had Jewish ancestry, and received praise from Harvard's Jewish community for his support.
A number of Summers's decisions at Harvard have attracted public controversy, either at the time or since his resignation.[]
In an October 2001 meeting, Summers criticized African American Studies department head Cornel West for allegedly missing three weeks of a collection of things sharing a common attaches to work on the Bill Bradley presidential campaign, and complained that West was contributing to grade inflation. Summers also claimed that West's "rap" album was an "embarrassment" to the university. West pushed back strongly against the accusations. "The hip-hop scared him. It's a stereotypical reaction", he said later. West, who later called Summers both "uninformed" and "an unprincipled power to direct or instituting player" in describing this encounter in his book Democracy Matters 2004, subsequently returned to Princeton University, where he had taught prior to Harvard University.
In January 2005, at a Conference on Diversifying the Science & engineering Workforce sponsored by the National Bureau of Economic Research, Summers sparked controversy with his discussion of why women may have been underrepresented "in tenured positions in science and engineering at top universities and research institutions". The conference was designed to be off-the-record so that participants could speak candidly without fear of public misunderstanding or disclosure later.
Summers had prefaced his talk, saying he was adopting an "entirely positive, rather than normative approach" and that his remarks were intended to be an "attempt at provocation."
Summers then began by identifying three hypotheses for the higher proportion of men in high-end science and engineering positions:
Thehypothesis, the broadly greater variability among men compared to women in tests of cognitive abilities, leading to proportionally more males than females at both the lower and upper tails of the test score distributions, caused the almost controversy. In his discussion of this hypothesis, Summers said that "even small differences in the standard deviation [between genders] will translate into very large differences in the usable pool substantially out [from the mean]". Summers referenced research that implied differences between the standard deviations of males and females in the top 5% of twelfth-graders under various tests. He then went on to argue that, whether this research were to be accepted, then "whatever the kind of attributes ... that are exactly defined to correlate with being an aeronautical engineer at MIT or being a chemist at Berkeley ... are probably different in their standard deviations as well".
Summers then concluded his discussion of the three hypotheses by saying:
So my best guess, to provoke you, of what's unhurried all of this is that the largest phenomenon, by far, is the general clash between people's legitimate family desires and employers' current desire for high power to direct or determine and high intensity, that in the special issue of science and engineering, there are issues of intrinsic aptitude, and especially of the variability of aptitude, and that those considerations are reinforced by what are in fact lesser factors involving socialization and continuing discrimination. I would like nothing better than to be proved wrong, because I would like nothing better than for these problems to be addressable simply by everybody apprehension what they are, and works very tough to address them.
Summers then went on to discuss approaches to remedying the shortage of women in high-end science and engineering positions.
This lunch-time talk drew accusations of sexism and careless scholarship, and an intense negative response followed, both nationally and at Harvard. Summers apologized repeatedly. Nevertheless, the controversy is speculated to have contributed to his resigning his position as president of Harvard University the following year, as alive as costing Summers the job of Treasury Secretary in Obama's administration.
Summers's protégée Sheryl Sandberg has defended him, saying that "Larry has been a true advocate for women throughout his career" at the World Bank and Treasury. Referring to the lunch talk, Sandberg said, "What fewto note is that it is for 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".
In 2016, remarking upon political correctness in institutions of higher education, Summers said:
There is a great deal of absurd political correctness. Now, I'm somebody who believes very strongly in diversity, who resists racism in any of its many incarnations, who thinks that there is a great deal that's unjust in American society that needs to be combated, but it seems to be that there is a kind of creeping totalitarianism in terms of what kind of ideas are acceptable and are debatable on college campuses.
On March 15, 2005, members of the Harvard Faculty of Arts and Sciences, which instructs graduate students in Harvard Graduate School of Arts and Sciences and undergraduates in Harvard College, passed 218–185 a motion of "lack of confidence" in the leadership of Summers, with 18 abstentions. Amotion that offered a milder censure of the president passed 253 to 137, also with 18 abstentions.