Path to Power
Summers may have been genetically programmed to become an economist. Both his parents were professors of economics at Ivy League schools, and two of his uncles — Paul Samuelson and Kenneth Arrow — won Nobel Prizes in economics. "I wasn't any good at math or physics," says Summers, "so I became an economist.”
However, when Summers joined the Massachusetts Institute of Technology as a 16 year-old undergrad, he couldn’t pinpoint his career aspirations. He was leaning towards studying mathematics when his father ran into celebrated Harvard economist, and future chairman of the Council of Economic Advisers under President Ronald Reagan, Martin Feldstein. Feldstein agreed to take Summers on as an intern for the summer after his sophomore year. After graduating from M.I.T, Summers attended Harvard and studied under Feldstein to earn his Ph.D in economics. Feldstein sponsored his doctorate.
While earning his doctorate, Summers was diagnosed with Hodgkin’s disease. The chemotherapy treatment worked, and the disease has not returned.
Feldstein would shepherd Summers into the public sector. President Ronald Reagan named Feldstein to chair his Council of Economic Advisers. Summers would join his mentor, working as an economist for ten months at the White House. He would then return to Harvard as a professor.
By age 28, Summers had become one of the youngest tenured professors in the famed institution's history. He moved on to the World Bank as its chief economist in 1991, before leaving two years later.
Joining the Treasury
The year 1993 was a good one for Summers. He received the famed John Bates Clark Medal, which is given to the top economist under 40. It's seen as a stepping stone to the Nobel Prize. That year, President Bill Clinton also named him as Treasury undersecretary for International Affairs, which meant he was the nation’s top financial diplomat. Euromoney called him "the most ambitious Harvard professor to come to Washington since Henry Kissinger.”
The comparison to Kissinger has not disappeared. In December 2008, Time magazine said Summers "is expected to do for the economy what strong-minded and ambitious National Security Advisers like Henry Kissinger have done for foreign policy: plan it, set it and control it.”
It was as Treasury undersecretary that Summers first met Geithner. Summers immediately took notice of the Treasury special assistant because of his original thoughts and willingness to confront him when he thought Summers was wrong. Summers quickly promoted the young Geithner to deputy assistant secretary, jumping many levels of the bureaucracy. As Summers climbed the Treasury ladder, Summers would continue to promote Geithner along with him.
In 1995, Summers became deputy Treasury secretary to Treasury first Clinton Treasury Secretary Robert Rubin. While working under Rubin, Summers helped respond to the Mexican peso crisis and aided by Geithner, to formulate U.S. policy towards the Asian financial crisis. Time magazine even included Summers on its cover with the headline, “The Committee to Save the World,” along with Rubin and Fed Chairman Alan Greenspan.
But even then, Summers’ strong points-of-view — his detractors would call it intellectual bullying — caused problems. Some Asian publications compared him to General MacArthur for the way he pushed banking reform onto various countries.
Treasury Secretary
By 1999, when Rubin stepped down as Treasury secretary, Summers was the obvious replacement. The 43 year-old took office with little debate or dissent.
During his two-year tenure as Treasury’s top official, Summers used surpluses in the budget to repurchase Treasury debt and pay down the deficit, which hadn’t happened since the 1920s.
When President Clinton’s term ended, Summers returned to Harvard, this time as the institution’s president. Summers’ tenure as the hallowed institution’s president drew more notoriety than his stint as the government’s top financial official.
Leading Harvard
First in 2001, Summers worked to (successfully) oust Harvard African-American studies professor Cornel West. When Summers first took office, he met with West and asked him to produce more academic work and to come in every couple months to update Summers on his progress.
This outraged black civil-rights activists and Democratic power-players like the Rev. Jesse Jackson, and the media quickly jumped on the story. Summers met with West again in January 2002 in what was described as a cordial meeting. West said Summers apologized. Summers denied apologizing, and West eventually left to teach at Princeton University.
But the flap with West was minor compared to the next Summers controversy. In 2005, at an academic conference, Summers questioned whether there was an “innate” difference between men and women that pushed women away from math and sciences. This created a surge of criticism from professors, students and national women’s groups. He apologized soon afterwards, but some felt it wasn’t enough. ‘“Apology or no apology, a lot of damage has been done by reinforcing these stereotypes,’ said economics Professor Caroline M. Hoxby, who was at Harvard for about 11 years.”
The controversy energized a broad group of Harvard faculty dissatisfied with what they viewed as Summers’ dictatorial style. Summers would resign from Harvard in 2006, but he still holds a professor position.
After Harvard, Summers joined the hedge fund D.E. Shaw & Co. as its part-time managing director. Working one-day a week, Summers took home over $5 million in the two years he spent at Shaw, acccording to financial reports released by the White House. He also wrote a regular column in the Financial Times newspaper, in which he explained his views of the financial crisis as it broadened.
