Scarey Lummox….very, very fat

And guess what: Dubya’s ethics counsel approves

The world is awash with reports today that man-we-love-to-hate Larry Summers is about to kiss the Black Dude’s hands and take over at some point from Valium addict Ben Bernanke as Fed Reserve Chairman.

Government appointments have served Lar-lah well in the past: Consulting work helped make Summers a wealthy man between the time he left government service in 2001 and when he returned in 2009. When President Bill Clinton nominated him to be Treasury Secretary, he listed assets of about US$900,000 and debts, including a mortgage, of US$500,000. When he returned to serve in the Obama administration, was worth around thirty million bucks. That’s a net earnings multiplier of 75 in eight years. I’m not sure even Lurid Bankfine could match that.

The really interesting point of difference Summers has as a potential Fed Reserve Chairman is that he’s nothing to do with Goldman Sachs. It should not, however, be seen as a sure sign of milk-white innocence and honesty. Summers has a buddy-crook called Andrei Shleifer.

Andrei Shleifer managed to get put in charge of helping Russia privatizsation in the 1990′s. Shleifer orchestrated a scam whereby he invested money through his wife and helped his friend Jonathan Hay and his lover and friends invest theirs – strictly against the conflict of interest policy they were working under.

Shleifer got in trouble, and the U.S Government sued and won against Harvard and Shleifer. Shleifer was barred from participating in any AID project for two years.

Summers was good friends with Shleifer, and used his position to protect him. The two men saw each other frequently and continued taking holidays together in the summer on the Cape. When it became known in early 2001 that Summers was on the short list of candidates to succeed Neil Rudenstine as the president of Harvard University, Shleifer began campaigning for Summers to get the Harvard post, giving meet-and-greet parties for him at their home. Summers stayed with him when he visited Harvard.

In March 2001, Summers was named president of Harvard. Having his close friend as his boss would turn out to be quite helpful to Shleifer. Summers asserted in his deposition that he recused himself from any involvement in the university’s handling of the Shleifer matter, but the new president stayed involved anyway. Early in his presidency he told the dean of the faculty of arts and sciences, Jeremy Knowles, to keep Shleifer at Harvard.

“I expressed to Dean Knowles,” Summers testified in a deposition in 2002, “. . . that I was concerned to make sure that Professor Shleifer remained at Harvard because I felt that he made a great contribution to the economics department . . . and expressed the hope that Dean Knowles would be attentive to that. . . . I think he recognized and shared the concern.”

Or put another way, although he had been found guilty of crooked abuse of his Government position on a literally industrial scale, Shleifer was shielded by his mover and shaker buddy Summers.

So we should be somewhat afraid when Dean Baker, an economist with the Center for Economic and Policy Research in Washington says “Summers is going to have a very sympathetic approach to Wall Street….these are people he has a background with.” That’s certainly one way of putting it. But cheery Richard W. Painter (who served as an ethics counsel in the White House during the George W. Bush presidency, and vetted Bernanke when he was first up for the job in 2006) observes, “Summers’ Wall Street ties are typical for potential appointees to financial regulatory posts. A background working in financial institutions is the type of training that you want”. I suppose you could say that too, although call me wacky here, I think I’d put a tad more trust in Elizabeth Warren.

On the other hand, you could also call such an appointment by the President one last final Uncle Tom sellout to those who some people thought Barry O’Drama might scatter to the four winds when he got elected in 2008. You could even call it putting Heydrich in charge of a schule, a fox in charge of the chickens, and a whole host of other equally accurate parallels.

This is all Friday afternoon stuff, really. There’s nothing new to see here: Goldman Sachs or not, Larry Summers is just another greedy hoodlum like all the other pillocks running the global fiscal Atcheson, Topeka & Cliffover Railroad. Time to open another bottle and get over it.

Earlier at The Slog: The Paedofile records Michael Gove’s astonishing conversion

Late flash: Jimmy Savile family says former DJ “has ruled himself out” as new Fed Chairman