April 04, 2009
From a recent profile of Larry Summers by Noam Scheiber in the New Republic:
At first glance, Summers might appear to have less to contribute on the bank and credit-market front, the most dangerous part of the current situation. His exposure to Wall Street over the years has been limited...
From the Wall Street Journal yesterday:
Top White House economic adviser Lawrence Summers received about $5.2 million over the past year in compensation from hedge fund D.E. Shaw, and also received hundreds of thousands of dollars in speaking fees from major financial institutions...
In total, Mr. Summers made a total of about 40 speaking appearances to financial sector firms and other places, with fees totaling about $2.77 million. Fees ranged from $10,000 for a Yale University speech to $135,000 for an appearance paid for by Goldman Sachs & Co.
I wonder what would have constituted "significant" exposure to Wall Street. Maybe if he'd worked for D.E. Shaw full time? (Amazingly, Summers was paid $5.2 million for a part-time position. He was still a full-time professor at Harvard. If we're generous and assume he worked 1000 hours a year for them, he was paid $5,200 an hour.)
Then there are the speaking fees. As the Wall Street Journal mentions, they were mostly from the financial sector—including the "giant government bailout" sector, such as JP Morgan, Citigroup, and two speeches to Goldman Sachs. I've pulled out some of the interesting ones from his disclosure form and listed them below the fold.
Next, note also that Summers worked for D.E. Shaw from October, 2006 onwards, so $5.2 million is likely less than half his total haul.
Finally, the New Republic article omitted that Summers was listed as a contributor to their now defunct eblo Open University. Though as far as I can tell Summers never wrote anything for it, he was mentioned on it several times—for example, when he was hired by D.E. Shaw.
• • •
SELECTED LARRY SUMMERS SPEAKING FEES
GIANT BAILOUT SECTOR
Goldman Sachs: $202,500 (two speeches)
Citigroup: $99,000 (two speeches)
JP Morgan: $67,500
Merrill Lynch: $45,000 (donated to charity)
DOMESTIC FINANCIAL SECTOR
Investec Bank: $157,500
State Street Corporation: $112,500
Pricewaterhouse Coopers LLC: $67,500
Lehman Brothers: $67,500
American Express: $67,500
Siguler Guff & Company (private equity): $67,500
TA Associates (private equity): $67,500
Charles River Ventures (Venture Capital): $67,500
FOREIGN FINANCIAL SECTOR
Skagen Funds (Scandinavian mutual fund): $180,000 (three speeches)
Centro de Liderazgo y Gestion (the Center for Leadership and Management, in Colombia): $112,500
Association of Mexican Bankers: $90,000
Posted at April 4, 2009 08:03 AM
Securities Industry & Financial Markets Association: $33,750
Pension Real Estate Association: $67,500
Hudson Institute: $10,000
100 000 $ fee for giving a talk? I sometimes wonder how anyone can fool him/herself and not see that this is pure bribery in open daylight. these power structures know very well that they're getting their money's worth (actually that would be your money's worth, if you're an US tax payer - now directly in case of Goldman Sachs etc.)
it takes high level education not to see the obvious.
The TNR links invite one to "Check out Noam Scheiber's new blog THE STASH". After this kind of awesome display of reporting skillz, I thought, who would want to do that? But then it occurred to me that the 'stash' in question might really a clever allusion to "The 'Stache", aka the Moustache of Understanding. I had to investigate...
Alas, no. Though some of the post titles raise bizarre mental images when interepreted that way (or any other way): "China's Central Bank: The Meat in a Krugman-Stash Sandwich"
I'd assumed that Scheiber would use the blog to promote his articles in the magazine. Interesting to note that although he does so in a couple of other cases, he doesn't mention the Summers profile at The Stash.
One worthwhile nugget of information from my first and last visit to The Stash:
Amy Sullivan is Norm Scheiber's wife.
That explains so much.
"eblo Open University"
"Amy Sullivan is Noam Scheiber's wife.
That explains so much."
me heap confused.
"i am very much my own mind and man, and you can see for yourself that my golden leash is both slack, and extends beyond the horizon"
Apologies to everyone whose comments have disappeared. This isn't the first time comments have been abducted to parts unknown; I'm not sure what's going on.
100 000 $ fee for giving a talk? I sometimes wonder how anyone can fool him/herself and not see that this is pure bribery in open daylight.
Well, that's about what retro-imperialist unhistorian Niall Ferguson used to get for his "Ain't capitalism grand!" lectures to hedge fund managers and their ilk, so you don't have to be someone likely to show up later with a Cabinet position to pull that kind of ludicrous appearance fee, as long as you're telling the audience what they want to hear.
(Found that tidbit in Dan Hind's Jump, You Fuckers! [pdf link on that page], one of the clearer overviews of the causes of the current fiasco.)
An "eblo" is what other people vulgarly refer to as a "blog," JV.
Amy Sullivan has been paid for her thoughts by a number of liberal think tanks and magazines to hector Democrats about insufficient respect for "faith", by which she means insufficient enthusiasm for abandoning reproductive and gay rights. She was/is a professional version of what is now termed on the blogs a "concern troll".
She used to appear regularly as a guest blogger at Washington Monthly, in the Kevin Drum era, and was just as regularly savaged expertly by commenters. Eventually management took the hint, but she continued to pop up around the Washington flackosphere. The 2004-2006 era was her high-water mark, when more Dems took the Rovian hype about "values voters" seriously.
Hmmmm. A party supposedly interested in furthering the interests of the working class being led by guys wholly in hock to Wall Street? What would happen if George Bush's primary economic adviser got consulting fees for advising the Socialist Party in France? I suspect the latter reaction would be stronger than the ho-hum, nothing-to-see here reaction (even if they deign to notice it) of folks like Yglesias or Ezra Klein. I knew the Dems had gotten decidely Rubinesque over the last 16 years, but I never thought in the face of a catastrophic fuck-up engineered by these guys that Obama would actually turn the keys over to them, AGAIN. Insane, and depressing.
scott, I don't think France's PS is the radical anti-Big Business organization you may imagine it is. It's commonly recognized as same sort of graveyard of activists as the US DP.
thanks Nell, thanks Oocyte saver. I pictured an eblo as some kind of creature out of Maurice Sendak, invisble to most, that infected people with the eblo virus that made them spout neocon nonsense.
thanks for that link, RobWeaver - made very nice reading for a sunday evening.
First, thanks for this helpful information and analysis. Between this and the Bill Moyers interview the other night, the public is just starting to get the idea of what the heck is going on with the real causes of the economic disaster we are in - the American Public may be a sleeping giant when it comes to things like this, but when you steal from it wholesale, when it awakens - watch out.
President Obama has come in with the greatest good will and hope of any American President since FDR I believe. If his team is filled with hustlers, he better move quickly to clear the rascals out, or he will find that, as with every President, charm only goes so far. Your actions have to be credible. Putting crooks in charge of the treasury is not a way to achieve that.
However, the case against Summers is not clear. Frankly, I don't blame him for making some hay before the election. It was very uncertain at the time of those speeches as to who would become President of the US, lest we forget, and as long as he did nothing illegal, and made no promises that compromised his actions or integrity, then I don't think we can just assume the worst. A president must be allowed his own advisers after all. It's the policy making folks that have to be approved, and rightly so.
Second, I have trouble evaluating something like a $135,000 speaking fee without really understanding the context in which it came.
Was it paid for an hour in a little closed door office meeting with 2 or 3 people? Was it part of a giant training and morale meeting of G S & Co employees? Was the fee just for the meeting itself, or was there preliminary work or research brought to the meeting that Summers had, outside of his upcoming probable appointment to something, that was worth that kind of cash to G & S? Would other firms, had they been given the opportunity, paid as much for the same information?
Was this a 20 minute speech or a grueling 8 hour day?
And what are the comparable fees paid by these kinds of people to get the people they want, experts, to talk to the people they want, clients or employees, to give the image they want of their firm?
In an time when multimillion dollar bonuses were being paid out, $135,000 looks like peanuts in comparison. Now to anyone toiling away with a regular life, it looks like a giant bribe, a fiasco, the smoking gun. But, perhaps it was just business as usual? Of course, it is "business as usual" that we are protesting here. Some of that business as usual was fraudulent and illegal as hell. But we have to keep our eyes on the main players first.
What would someone like Summers potentially been paid for such an appearance? What was his true market value OUTSIDE of his Obama connection? Or was his true Obama value not his likelihood of being appointed, but as being someone who could explain Obama and how he might act to G & S.
I am not trying to excuse the guy, but it is so easy to point at something and screech "Fire, fire!" I want to make sure I understand what has been revealed here.
More than anything else, I think that the American Taxpayers want the truth of the situation, they want those who knowingly committed crimes to pay for those crimes, and they want to get as much of illegally gained money back as possible.
This is not undoable. There are records of transactions, of bonuses paid, of overinflated salaries, of decisions made within corporations.
This is a matter for the FBI, the Treasury Department and perhaps others to work on. But if massive crimes were committed, wholesale fraud against the American Public done, then those at the front of it should pay, no matter how blue their blood, or how prestigious their stock.
But here, I am at the limit of my understanding of things and I know it. I depend on you experts to keep digging and tell us more. So, go at it guys. I was a philosophy major, not an economist. That looked much too much like fantasy to me at the time.
Peter, Editor and Spelling Wrecker, The Peter Files Blog of Comedy