Sandra Navidi - SuperHubs - How the Financial Elite and Their Networks Rule our World

SHOCK-RESISTANT: LARRY SUMMERS’S NETWORK

During the Annual Meetings of the IMF, Nouriel Roubini and I had a meeting with Larry Summers, the director of the National Economic Council, at his office. It was a bright, sunny day as I made my way to the White House, which looked postcard-perfect set against deep-blue skies and the lush green lawn. In reality, it is much smaller than one would imagine. We checked in at the Northwest Gate for our appointment in the West Wing, which is located on 17th Street and Pennsylvania Avenue. Visitors must be announced at least twenty-four hours in advance for routine Secret Service background checks. I presented my passport, went through security screening, and received a temporary badge. After entering the West Wing, we took a seat in the waiting area, and I pretended to read a paper while observing the goings-on around me out of the corner of my eyes with great fascination. A general, whom I had just seen giving an interview on television the previous day, walked by and said hello. Some other generals and visitors headed for the Situation Room, and a staffer collected their cell phones in a basket for security reasons.

After a while, we were led through offices completely crammed with staffers and piles of papers. At the top of a narrow staircase, Summers awaited us. His spacious office was located just above the Oval Office and overlooked the Rose Garden. We settled into our seats across from his desk. Summers very much lived up to his public image: Outside of his office pallets of Diet Coke were stacked up against the wall, his shirt was untucked, and he put his feet on the coffee table in front of us. But he was a gracious host, in good spirits, and a lively conversation ensued. It was fascinating to gain unedited insight into his thinking.

Larry Summers, who is known to be a somewhat prickly intellectual genius, is atypical yet exemplary of the dynamics that rule the world of high-level networking: Despite courting controversy throughout his career, he occupies a central position that touches upon virtually all other networks. Ever restless and on the lookout for new challenges, pushing boundaries and climbing to new heights, Summers has had several exceedingly successful careers and held some of the most important positions in the U.S. government. His platinum resume was practically preordained in his DNA, as he is the son of two economists and the nephew of two Nobel laureates in economics, Paul Samuelson and Kenneth Arrow. His father taught at Yale University, and Samuelson had been an adviser to President Kennedy.

Meteoric Rise

Summers’s stellar professional rise occurred with lightning speed. He was accepted into the Massachusetts Institute of Technology at age sixteen and received tenure at Harvard University at only twenty-eight years old. That same year, personal tragedy struck when he was diagnosed with late-stage Hodgkin’s disease and endured nine grueling months of chemotherapy. He later said that this experience made him focus all the more on his body of work, since he felt it kept him distracted, social, and sane.

In 1988 he joined the presidential campaign of Massachusetts governor Michael Dukakis, where he met many high-profile political fixtures such as Gene Sperling, George Stephanopoulos, Laura D’Andrea Tyson, and Robert Rubin, who over time would become allies and close friends. Three years later, he landed the prestigious position of chief economist at the World Bank. After a two-year stint, he became secretary of the treasury for international affairs and was awarded the John Bates Clark medal for his achievement as the most accomplished economist under forty years of age. Short of the noble Prize, it is considered the most prestigious award.

In 1999, Summers became secretary of the treasury in the Clinton administration. After serving his term, he returned to Harvard to become its twenty-seventh President—an extremely prestigious position. Thereafter, he returned to the White House to serve as the director of the NEC under President Obama. Considering the seismic shifts the economy underwent during the greatest crisis since the Great Depression, this was an incredibly influential post.

Against All Odds

However, controversy frequently disrupted Summers’s seemingly unstoppable rise. Most of this was the result of his own doing, as he often turned out to be his own worst enemy. Over the years he has alienated numerous people with what they perceived as arrogance. Often described as the smartest guy in the room, he can be intellectually domineering, dismissive, and prone to imperious outbursts of temperament. His autographing dollar bills, which already carried his signature from his days as treasury secretary, raised eyebrows. Idiosyncrasies such as his table manners, his penchant for falling asleep—including in meetings with the president and foreign heads of state—his avoiding eye contact, interrupting people and occasionally being less than polite, led some at Harvard to speculate that something might be off.

He has always been rough around the edges, but over the years he has made an effort to improve. He was helped early on by Robert Rubin, who took him under his wing during the Dukakis campaign and eventually helped pave his way to the White House. Summers, being aware of his shortcomings, tried to adopt some of Rubin’s fortes, specifically his highly developed social skills. They made a curious team. Rubin was soft-spoken and sophisticated, whereas Summers was disheveled and confrontational. Yet, they complemented each other well. Rubin opened doors for Summers, who closely studied his mentor and began to evolve. Today, Summers often speaks in an exaggeratedly polite manner and seems to habitually wear a smile.

The Bull in Charge of the China Shop

Summers has a tendency to blow himself up in the most spectacular manner. The first implosion occurred in 1991, during his time as chief economist at the World Bank, in what has been dubbed “toxic memo gate.” One of Summers’s aides had written a memo, which Summers had signed, on exporting polluting industries and toxic waste to Africa, an argument that was interpreted to imply that human life was of lesser value there. Once the firestorm erupted, the aide claimed he had employed irony to provoke a critical dialogue. Unfortunately, that subtlety was lost on the discerning public, and when the Economist got wind of the memo, they featured it on their front cover with the headline “Let Them Eat Pollution.”3 Economists, environmentalists, and politicians were appalled by the incident, which seemed to reinforce the negative image of the World Bank. The aide offered to take responsibility, but Summers insisted on taking the blame.

In 2001, the next chapter in the Summers career drama ensued. While serving as president of Harvard University, Summers summoned Cornel West, a fellow professor at Harvard, in African American Studies, to his office. There, he criticized his colleague for missing too many classes, handing out too many favorable grades, and producing a “disgraceful” hip-hop CD. He called upon West to reinforce his authority by writing an academic book and suggested regular follow-up meetings. West was incensed. After much back and forth, and what seemed like a conciliatory meeting in which the two men shared their experiences with cancer, the situation finally escalated. West claimed that Summers had apologized, which Summers vigorously disputed. West exploded and characterized Summers as untrustworthy and lacking character, calling him the “Ariel Sharon of higher education.” Thereafter, all hell broke loose, with West being accused of anti-Semitism and eventually leaving Harvard for MIT. No one came out looking good, particularly the president of Harvard University, whose conduct was considered at best undiplomatic and at worst undignified.4