Latest / The Nation Podcasts / The Age of Larry Summers and Jeffrey Epstein w/ Doug Henwood | The Time of Monsters with Jeet Heer

Transcript

The Age of Larry Summers and Jeffrey Epstein w/ Doug Henwood | The Time of Monsters with Jeet Heer · The Nation Podcasts

• 0:01
  [SPEAKER_00]: The old world is dying, the new world struggles to be born, now is the time of monsters.
• 0:07
  [SPEAKER_00]: With those words, very loosely translated from Gramshee, I welcome to the time of monsters podcast.
• 0:15
  [SPEAKER_00]: I'm D-Tair of the Nation magazine.
• 0:17
  [SPEAKER_00]: which is the sponsor of this podcast.
• 0:19
  [SPEAKER_00]: And we're here every week to look at the monsters of the age.
• 0:22
  [SPEAKER_00]: Now obviously the monsters that has been dominating headlines, a near-sitanic figure is the late New York finance here, Jeffrey Epstein.
• 0:32
  [SPEAKER_00]: But we'll see you in the next video.
• 0:32
  [SPEAKER_00]: just as Satan had many lesser demons that were part of his circle.
• 0:37
  [SPEAKER_00]: Epstein had many people around him.
• 0:39
  [SPEAKER_00]: And one of these smaller devils has been very much in the news as well.
• 0:43
  [SPEAKER_00]: I'm talking about Larry Summers, former Treasury Secretary, former President of Harvard, very influential economist, who's had to resign from a number of posts.
• 0:54
  [SPEAKER_00]: because of very embarrassing emails from his long-course moments with Jeffrey Epstein that seems to have extended to pretty much the day before Epstein was suggested for the second time in 2018 and that now these emails to be sure do not show any of the sort of criminal sexual predatory behavior that Epstein is famous for but I think they're embarrassing in a bunch of other ways
• 1:22
  [SPEAKER_00]: the world of Larry Summers, who maybe even more than Epstein is a kind of athletic figure of the age.
• 1:29
  [SPEAKER_00]: As served in many administrations has been an advisor to the rich and powerful, is the sort of consummate insider.
• 1:36
  [SPEAKER_00]: So I thought to look at the history of Larry Summers, and I don't think anyone could be a better guest than our guest for this week, Doug Kenwood, financial reporter.
• 1:46
  [SPEAKER_00]: economic reporter, longtime writer and the pages of the nation magazine, author of some really wonderful books, including I think one that is a classic Wall Street from 1997, as well as the excellent after the new economy and the controversial, but I think historically vindicated my turn, Hillary Clinton targets the
• 2:15
  [SPEAKER_00]: Well, welcome to the program.
• 2:17
  [SPEAKER_01]: Oh, thanks for having me, Chief.
• 2:19
  [SPEAKER_01]: And you've been on my radio show, too, so we're a mutual, mutual interviewer, as you.
• 2:25
  [SPEAKER_00]: We're friend of the font, as the kids now say, friend of the font.
• 2:29
  [SPEAKER_00]: So let's just step back a little bit, because I think that we can all enjoy the Salacious Gossip.
• 2:35
  [SPEAKER_00]: And I'm absolutely, I'm not a moralist on this front.
• 2:38
  [SPEAKER_00]: I actually think Pavloid Gossip has an excellent role to play.
• 2:42
  [SPEAKER_00]: And not just as entertainment, but politically as well.
• 2:45
  [SPEAKER_00]: You know, going back to the French Revolution with the tales of the Visties of the Arroyal Court and of the Queen, Gossip has shielded many of revolution.
• 2:55
  [SPEAKER_01]: I'm very pro gossip myself and pro tabloid, I also wish we could have a left-wing version that he or post-step alarm was synced in it.
• 3:03
  [SPEAKER_00]: That would be ideal, I mean, we're thinking along the same lines, I think there wasn't a tab to have left-wing tabloid in the forties that briefly lived PM in New York, which is an excellent paper, but yeah, you know, David Axlerhouse's mother worked for PM.
• 3:18
  [SPEAKER_00]: Oh, really?
• 3:18
  [SPEAKER_00]: Wow.
• 3:19
  [SPEAKER_00]: Yeah.
• 3:20
  [SPEAKER_00]: Another case.
• 3:22
  [SPEAKER_00]: This is perhaps a topic for another show, but another case of the unfortunate leftist to Neil the Rope Pipeline.
• 3:28
  [SPEAKER_01]: Yeah.
• 3:29
  [SPEAKER_01]: It's really sad.
• 3:29
  [SPEAKER_01]: There's a lot of that going around.
• 3:31
  [SPEAKER_00]: Yeah.
• 3:32
  [SPEAKER_00]: In any case, so we will take up some of the gossip around Larry Summers.
• 3:37
  [SPEAKER_00]: But I think it's, you know, like, Summers is, and this is not a joke.
• 3:41
  [SPEAKER_00]: I mean, I think he has been, I think,
• 3:44
  [SPEAKER_00]: One of the most influential, if not the most influential sort of policy person on the Democratic party side, going back like decades, and I think that it sort of be hues us to sort of their worth historic size and situate him as well as Epstein, like so so who is Larry Summers?
• 4:02
  [SPEAKER_01]: Well, he's a very distinguished economist, distinguished in his profession, I don't think his advice was always so distinguished.
• 4:10
  [SPEAKER_01]: But he is certainly highly regarded in the field, highly regarded, of course, most importantly by Larry Summers.
• 4:17
  [SPEAKER_01]: As funny as reading all these profiles of him in the last couple of days, the line that emerged was brilliant, but flawed.
• 4:30
  [SPEAKER_01]: really just self-important character and, you know, the flaws are very big, important part of his whole whole stick.
• 4:39
  [SPEAKER_01]: He comes from a family of economists.
• 4:40
  [SPEAKER_01]: He is a neppo baby.
• 4:43
  [SPEAKER_01]: I can't remember the exact number, but they're like, you know, three, I think close relatives who are also important economists,
• 4:49
  [SPEAKER_01]: So he comes to the field as part of the professor's royalty and then he made a big name for himself, starting in the 1980s.
• 4:57
  [SPEAKER_01]: I was just looking over some of the stuff I'd written in the past that cited him and the first one was from 1981 and that in 1981 paper was an examination of the role of inheritance in wealth and his estimate was 80% of existing wealth was the result of inheritance.
• 5:17
  [SPEAKER_01]: And this is a controversial topic in the economics field, but one of this is something that Kerry threw out his career as an economist is that he did nothing with that insight.
• 5:28
  [SPEAKER_01]: He made no political conclusion from that.
• 5:30
  [SPEAKER_01]: So 80% of wealth comes from inheritance.
• 5:34
  [SPEAKER_01]: He might think, oh, maybe we should raise the inheritance tax.
• 5:37
  [SPEAKER_01]: Of course, Larry would never do something like that.
• 5:39
  [SPEAKER_01]: And as he got more and more famous and more and more.
• 5:43
  [SPEAKER_01]: in contact with wealth and power, he would be even less likely to suggest something like that.
• 5:49
  [SPEAKER_01]: He's an interesting case, kind of like Henry Kissinger in a way, if someone who started as an academic isn't intellectual, who then became a member of the inner core of the ruling class, you know, sometimes these sorts of figures are just like.
• 6:00
  [SPEAKER_01]: hired hands for the ruling class, but somebody like Summers really became an insider, chief economist of the World Bank, Treasury Secretary, and influential adviser to Obama and then Biden.
• 6:16
  [SPEAKER_01]: So, it's important figure politically, as well as for all the economic work, and some of the economic work is good.
• 6:22
  [SPEAKER_01]: You know, I'm not going to deny that, but his role as a political figure is a whole
• 6:29
  [SPEAKER_00]: Yeah, no, I mean, it's very interesting what you said about his insight into the role of inherited wealth because there does seem to be a disjunction between some of his findings as a scholar and what he does with it or as you say does not do with it.
• 6:46
  [SPEAKER_00]: as a political figure, and I think what you also said about, you know, we shouldn't knock his scholarship.
• 6:53
  [SPEAKER_00]: I think it's actually very true.
• 6:55
  [SPEAKER_00]: I think this is something that some people on the left occasionally fall into where, you know, if they don't like someone politically, they're dismissive of their scholarly accomplishment.
• 7:05
  [SPEAKER_00]: I don't think we get anywhere with that.
• 7:07
  [SPEAKER_00]: But also what you said about the inherited wealth, I mean, there's a kind of statement that Summer's made during the early days of the Obama administration when people were starting to talk about inequality.
• 7:17
  [SPEAKER_00]: This was, I think, maybe before Pequetti, but, you know, like that atmosphere was starting to emerge.
• 7:23
  [SPEAKER_00]: And Summer said, one of the reasons that inequality has probably gone up in our society is that people are being treated closer to the way that they're supposed to be treated.
• 7:33
  [SPEAKER_00]: And he said this in the support coming out against the Walthax.
• 7:40
  [SPEAKER_00]: Now, it's interesting to think about it.
• 7:44
  [SPEAKER_01]: Well, you know, a good accomplice of people rewarded according to their contributions to society.
• 7:49
  [SPEAKER_01]: So if you're rich, you've obviously contributed a lot.
• 7:52
  [SPEAKER_01]: That's, you know, that's really very orthodox economic thinking.
• 7:55
  [SPEAKER_01]: You know, and somebody like Cain's probably would have not agreed with that.
• 7:59
  [SPEAKER_01]: That's the difference between these, you know, the great bourgeois economists of all like Cain's and those of today, which are much more politically timid.
• 8:08
  [SPEAKER_00]: Well, no, no, absolutely.
• 8:10
  [SPEAKER_00]: And I mean, I think if we're serving it to historicize them a little bit more, I mean, summer is just long been associated with sort of the Democratic Party.
• 8:17
  [SPEAKER_00]: But I think that's his first, wasn't his first government jobs within the Reagan administration.
• 8:22
  [SPEAKER_00]: And I think when built in Friedman, these sort of, you know, major Friedman, I think, are died.
• 8:27
  [SPEAKER_00]: Summer's wrote like a long, sort of appreciative piece, saying, you know, there's a saying that, you know, we're all Keynesians,
• 8:38
  [SPEAKER_01]: So he sort of like coming and that was Richard Nixon's who said, okay, he was not.
• 8:43
  [SPEAKER_00]: Yeah.
• 8:43
  [SPEAKER_00]: Yeah, well, I mean, that's an exact parallel, right?
• 8:46
  [SPEAKER_00]: Like Nixon was the sort of Republican that acknowledged not just intellectual force, but, you know, the political force of Keynesian economics, and some of us is the Democrat who, like,
• 8:59
  [SPEAKER_00]: intellectual force freedmen.
• 9:01
  [SPEAKER_00]: So in some ways, I think one way to sort of situate summers is he's coming out of that generation of Democrats for a human closer to Milton Friedman than to Keynes.
• 9:12
  [SPEAKER_01]: Yeah, I mean, it's one thing to say that Milton Friedman was a very talented guy.
• 9:17
  [SPEAKER_01]: I mean, he had very important contributions to the field.
• 9:20
  [SPEAKER_01]: He was also extremely talented pullemesis, and he did a lot to sell his policy.
• 9:25
  [SPEAKER_01]: He wasn't just an academic economist, he was a newsweek columnist.
• 9:30
  [SPEAKER_01]: He had substantial talents.
• 9:31
  [SPEAKER_01]: I wouldn't deny him that.
• 9:33
  [SPEAKER_01]: I thought one of my problems with Naomi Klein's shock doctrine was that she made Friedman into a cartoon character.
• 9:40
  [SPEAKER_01]: He was very good at what he did, but it's okay to say that, but then I think summer has stuck the next step and really embraced a good bit of his politics, which is, you know,
• 9:50
  [SPEAKER_01]: He was a bad guy, ranging from his belief in undermining the welfare of state, privatizing social security to his support for Pinochet.
• 9:58
  [SPEAKER_01]: The politics of Milton Freeman are just appalling, but you can admire him as an intellectual and the skill of the premises, but you can't really take the next step and admire his politics, which is why Alari went too far.
• 10:13
  [SPEAKER_00]: Yeah, no, absolutely.
• 10:16
  [SPEAKER_00]: And I think that might be a good place to talk about the summer's his own politics and where we can situate that.
• 10:23
  [SPEAKER_00]: So I mean, as he's rising to the ranks, I mean, I think that the point at which he became the kind of insider figure, not just the sort of academic advisor to power, but one of the actual power players himself, I would probably say was probably the Clinton administration.
• 10:39
  [SPEAKER_00]: So how would you situate him?
• 10:42
  [SPEAKER_00]: within that sort of, you know, centony and world.
• 10:46
  [SPEAKER_01]: Yeah, well, you know, that's when he became chief economist of the World Bank and then later Treasury Secretary.
• 10:51
  [SPEAKER_01]: And that's, he became really one of the intellectual foundations of financial deregulation, which the Clinton administration was famous for, which then led to the Asian financial crisis.
• 11:03
  [SPEAKER_01]: And the Russian financial crisis then later, the 2008 financial crisis.
• 11:08
  [SPEAKER_01]: So it was a really
• 11:12
  [SPEAKER_01]: But I first came across him in 1989 when he had a paper arguing that he'd done some work on this, that financial markets were too volatile.
• 11:24
  [SPEAKER_01]: There was too much trading.
• 11:26
  [SPEAKER_01]: This led to instability and risk of financial troubles.
• 11:29
  [SPEAKER_01]: It was a waste of resources, human, and financial.
• 11:33
  [SPEAKER_01]: And he wrote this paper suggesting that maybe we could tax financial transactions to put a
• 11:40
  [SPEAKER_01]: I came across that and wrote a little editorial for the nation back in the days when the nation had editorials in the front page.
• 11:47
  [SPEAKER_01]: There was front left 300 word unsigned editorials, but I will break my confidence and say I wrote that.
• 11:55
  [SPEAKER_01]: And the fact checker called summers.
• 11:59
  [SPEAKER_01]: And Summers was outraged that the nation was going to use his work politically.
• 12:04
  [SPEAKER_01]: He said it was just, you know, academic work and he didn't want to put the political use because he didn't want to be seen as promoting attacks of financial transactions.
• 12:12
  [SPEAKER_01]: I guess he was really looking to, um,
• 12:16
  [SPEAKER_01]: to rise in the world as looking for a future career.
• 12:19
  [SPEAKER_00]: Yeah, it's probably thinking that there could be a democratic administration in three years time and that if he was associated with the nation magazine, you know, this could harm his ability to join that administration.
• 12:34
  [SPEAKER_00]: So, so to all credit to Larry Cyrus, he's thinking yeah,
• 12:38
  [SPEAKER_01]: Yeah, that's a thanks long term, but it really was, yeah, at the World Bank, then later Twitter Secretary that he came into his own, I was a significant political figure, and a lot of his work in the 80s, early 90s.
• 12:52
  [SPEAKER_01]: was about financial market volatility.
• 12:56
  [SPEAKER_01]: And he was part of, there's this whole literature and what's called noise trading.
• 12:59
  [SPEAKER_01]: It's just people trading on gossip.
• 13:02
  [SPEAKER_01]: And the impulses at the moment, nothing long-term.
• 13:06
  [SPEAKER_01]: He was not thinking, they're not thinking of things three years down the line like Larry was personally.
• 13:11
  [SPEAKER_01]: Uh, and it was, it was good work.
• 13:14
  [SPEAKER_01]: I drew upon it when I wrote my book Wall Street.
• 13:19
  [SPEAKER_01]: There is, here's not a loan in this.
• 13:20
  [SPEAKER_01]: There's a whole school of this thought.
• 13:22
  [SPEAKER_01]: Some of his hard work colleagues are also involved in this work.
• 13:25
  [SPEAKER_01]: But this is another one of these instances where he would make interesting discoveries in his academic literature, or an academic work.
• 13:33
  [SPEAKER_01]: And then not do anything with them politically.
• 13:35
  [SPEAKER_01]: Um, so as, when he was the economist, the World Bank,
• 13:39
  [SPEAKER_01]: He promoted stock markets as a tool of development.
• 13:42
  [SPEAKER_01]: So, you know, here he is, his academic work says, maybe these stock markets are not so great.
• 13:47
  [SPEAKER_01]: But then when he's in a policy position, he says, oh, yes, stock markets are great.
• 13:51
  [SPEAKER_01]: You need more of them.
• 13:52
  [SPEAKER_01]: So, that's Larry Summers and a nutshell.
• 13:55
  [SPEAKER_01]: And of course, there's the famous toxic waste memo.
• 13:58
  [SPEAKER_01]: He wrote at the World Bank with, we can talk about it.
• 14:01
  [SPEAKER_00]: Yeah, I don't know.
• 14:02
  [SPEAKER_00]: I mean, well, we'll get the toxic waste just at the second, but I do have to put it underline what you just said because it is sort of Larry Summers in a nutshell, the sort of, you know, disjunction between, you know, his genuine scholarly work and his policy advocacy.
• 14:21
  [SPEAKER_00]: And in some ways it sort of gets a sort of paradox of a technocracy, you know, because I mean I think the whole thing with the Clinton administration and that sort of neoliberal turn within the Democratic Party was that it was based on sort of like the idea of credentials and that we are people who have data, we have the charts, you know, we're like liberals who are empirical.
• 14:46
  [SPEAKER_00]: And we'll follow the evidence where it leads, and we are also all of us from like, you know, top, not Ivy Lee schools, and so we know what we're talking about.
• 14:58
  [SPEAKER_00]: But
• 14:59
  [SPEAKER_00]: if you have a position where, like, yes, you have very scholarly people who have all the right credentials, but their actual policy work is not the same as their academic work, it's in, you know, like, actually going in the opposite direction of where this scholarship leads and then isn't really a technocracy, like, or is, like, sort of,
• 15:19
  [SPEAKER_00]: You know, this claim of technocratic scientific government of data-led government is that just like a kind of like front for something else, right?
• 15:30
  [SPEAKER_01]: Like the Yeah, well, you know, they'd love smart IQ.
• 15:34
  [SPEAKER_01]: It's funny, please
• 15:35
  [SPEAKER_01]: tech freaks now who are all over the place, you know, like Bosk and the the rest of these guys are just so into IQ and brilliance.
• 15:44
  [SPEAKER_01]: And it's, you know, for them, it really slides very easily into eugenics.
• 15:49
  [SPEAKER_01]: Yeah, that's a topic for another conversation.
• 15:53
  [SPEAKER_01]: But I think there's something similar going on with that Clinton crowd.
• 15:56
  [SPEAKER_01]: You being really, really smart and brilliant and, you know, just you knew everything, you know, they had special insights into the world and who
• 16:04
  [SPEAKER_01]: And in the case of summer, his own work should have been caused it out the wisdom of the financial markets, but he forgot all that when he became a policy guy, because they just so fell in love with money and the money.
• 16:23
  [SPEAKER_01]: Goldman Sachs, a Goldman Sachs was the ideal Clinton era institution.
• 16:29
  [SPEAKER_01]: Goldman Sachs is full of various smart people, you know, it's really the top of the financial world.
• 16:35
  [SPEAKER_01]: You know, these are a bunch of greedy, self-interested people who should not be giving political advice to anyone.
• 16:40
  [SPEAKER_01]: If you want to float a bond issue, you call up Goldman Sachs and say, yeah, help us sell this bond.
• 16:46
  [SPEAKER_01]: But if you're looking for an economic advice, you don't call up Goldman Sachs, you're really not the place to go for that.
• 16:52
  [SPEAKER_01]: Goldman was God.
• 16:56
  [SPEAKER_01]: And of course, then Robert Rubin was also the Goldman alum who was also Treasury Secretary and of almost sacrosanct status during the Clinton years.
• 17:07
  [SPEAKER_01]: I was thinking I just looking at that old time magazine cover for 1999.
• 17:11
  [SPEAKER_01]: Larry Summers, Ruben and Alan Greenspan, and the headline on it was Committee to Save the World, which was referring to their efforts to bail out after the Asian-final crisis.
• 17:23
  [SPEAKER_01]: But the Asian-final crisis was produced in large part by the policies that helped.
• 17:29
  [SPEAKER_01]: promote financial deregulation freedom of capital flows and all that so it's kind of like you know these stories of Trump coming up with trade deals to solve problems he created himself.
• 17:41
  [SPEAKER_01]: This is also the the committee to save the world was saving the world from problems that created themselves.
• 17:47
  [SPEAKER_00]: That's right, I mean, they were, you know, as a single, they're the arsonist who then rebrand themselves as firefighters.
• 17:55
  [SPEAKER_00]: Yes.
• 17:56
  [SPEAKER_00]: And actually, I mean, this whole thing about sort of like smarts, I do associate that with, like,
• 18:02
  [SPEAKER_00]: Kind of like like 1990s politics as and you know at that time Silicon Valley was kind of aligned with the Democrats and in some ways even though I think people within the sort of liberal democratic sphere would have rejected the more over
• 18:19
  [SPEAKER_00]: we know racist and you genesis forms that IQ talk leads, they were still like kind of open to it.
• 18:24
  [SPEAKER_00]: I mean, I do remember that Bill Clinton was kind of like, you know, praising Charles Murray.
• 18:29
  [SPEAKER_00]: The pre-belcher of Charles Murray is, you know, well, this is someone who has insights into the Welfare state that, you know, liberal should attend to.
• 18:36
  [SPEAKER_00]: But the idea like sort of like smarts as a licensed governor and or as a form of governance,
• 18:42
  [SPEAKER_00]: Yo, I don't know if we want to have Marxist we want to get, but it is a kind of like you're just doing like reifying the idea of intelligence and then also thinking that like intelligence and politics can be separated from class dynamics.
• 18:56
  [SPEAKER_00]: And so that you have these people who are smart and will therefore govern on behalf of what's in everyone's best interests and not have their own class interests that will like also shape how they see the world and what policies they're inclined to form.
• 19:10
  [SPEAKER_01]: So it's intriguing how those general interests that they're allegedly using their smarts to govern on behalf of 10 to overlap with the interests of Goldman Sachs.
• 19:21
  [SPEAKER_00]: Exactly, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah
• 19:48
  [SPEAKER_00]: that got him into hot water when he was president Harvard about women in IQ.
• 19:53
  [SPEAKER_00]: But let's go back to the Africa, the infamous Africa memo.
• 19:58
  [SPEAKER_01]: Yes, well, more nation stories here.
• 20:00
  [SPEAKER_01]: I almost got to break that story for the nation.
• 20:02
  [SPEAKER_01]: Greenpeace got a copy of this memo that was written under his name that was circulated.
• 20:08
  [SPEAKER_01]: The Greenpeace got a, isn't a term memo at the World Bank, but it was, uh,
• 20:12
  [SPEAKER_01]: They were trying to shop it around and the Washington Post wouldn't run a story out at the New York Times, wouldn't run a story out at the Wall Street Journal, didn't want to run a story on it.
• 20:21
  [SPEAKER_01]: So desperately, they approached the nation.
• 20:26
  [SPEAKER_01]: So I got this thing, I read the memo, it was pretty scandalous.
• 20:30
  [SPEAKER_01]: and but the economists beat us to the punch by about two days.
• 20:33
  [SPEAKER_01]: So I didn't get to break the story, but the just of it was, and it was not written by summers.
• 20:38
  [SPEAKER_01]: It went out under his name.
• 20:39
  [SPEAKER_01]: It was written by another World Bank economist named Lant Pritchett, and who, by the way, cheered when he heard that summers had gotten Joe Stiggler's fired at the at the World Bank.
• 20:51
  [SPEAKER_01]: But the memo said that, and this is pure economic logic, and also touches upon what you said earlier about his view of wealth, that poor countries are not contributing much to the world by their measure, because their incomes are still low, if they are contributing more than their incomes would be higher.
• 21:14
  [SPEAKER_01]: So the really scandalous passage of it was that the economic logic of dumping loads of toxic waste in poor countries in Africa was impeccable That is because you're doing at least a bit of damage.
• 21:27
  [SPEAKER_01]: They have low future incomes because they're poor and stupid
• 21:31
  [SPEAKER_01]: And therefore, you know, that's the perfect place to dump toxic waste.
• 21:36
  [SPEAKER_01]: It's going to shorten people's lives because the income lost by their shortened lifespans is pretty trivial compared to what it would be in a richer country.
• 21:44
  [SPEAKER_01]: And, you know, they're not contributing that much anyway.
• 21:46
  [SPEAKER_01]: So that's impeccable economic logic.
• 21:48
  [SPEAKER_01]: And, you know, in a sense, that's correct.
• 21:50
  [SPEAKER_01]: I mean, that is the way these people think.
• 21:53
  [SPEAKER_01]: But when you see it phrase that boldly, that it's just a calling that they would think that.
• 21:59
  [SPEAKER_01]: dumping toxic waste and poor people's backyards is a good idea, but you're something that also tell us malta's bullied by the way, and so this, you know, there was a big controversy around this, but he survived it.
• 22:15
  [SPEAKER_01]: There was no consequence for having written or actually signed this, Richard actually wrote it, but it was written under it, it was written under a summer's name.
• 22:23
  [SPEAKER_00]: Yeah, no, he did, he indeed survived that controversy, and like many other sort of controversies, there's a kind of era of impunity to Larry Summers.
• 22:37
  [SPEAKER_01]: Yeah, I got to ask him, I ran into him at a party in 2000, which is like nine years after this
• 22:43
  [SPEAKER_01]: and as this party in DC, and I watch one thing just gossipy aside here.
• 22:49
  [SPEAKER_01]: I watched him walk into a room and look all the women up and down in the most
• 22:55
  [SPEAKER_01]: rapacious way it was just like the male gaze is most toxic and you know lust is a good thing in my I think I'm pro lust but it was revolting the way he looked at them I'm so proprietary and just like this guy his view of the world was this is all for my my benefit my taking and my exploitation so there was just you got this the personal side of Larry Summers they're really
• 23:23
  [SPEAKER_01]: in just a few seconds.
• 23:25
  [SPEAKER_01]: I can see this guy is really just gross.
• 23:28
  [SPEAKER_01]: But I got then, as he is about to leave, I was saying if I don't ask him this question, I'm going to hate myself forever.
• 23:36
  [SPEAKER_01]: So, I went up and to identify myself as a contributing editor of the nation.
• 23:40
  [SPEAKER_01]: I had some questions.
• 23:41
  [SPEAKER_01]: We chatted a bit about this and that.
• 23:43
  [SPEAKER_01]: I had overheard him cheering the fact that the Washington police
• 23:48
  [SPEAKER_01]: preemptively arrested a bunch of what they thought were the leaders of the anarchists who are about to disrupt the World Bank IMF meetings that spring.
• 23:58
  [SPEAKER_01]: And Larry, these groups don't really have leaders in the sense that you understand them, but then you know, he did, I think they'd made like 600 arrests before anything really happened.
• 24:07
  [SPEAKER_01]: So I'd overheard him saying that to some of his accolades, but so then my first question was, well, what do you think he's protestors?
• 24:15
  [SPEAKER_01]: And he said, I admire their moral energy, but they just don't understand.
• 24:18
  [SPEAKER_01]: So he hadn't, when he was talking to me, he didn't want to say he admired the fact that the cops had just arrested hundreds of them.
• 24:24
  [SPEAKER_01]: He just wanted to say he admired their moral energy.
• 24:26
  [SPEAKER_01]: And then I said, okay, all right, so final question is Africa still vastly under polluted.
• 24:32
  [SPEAKER_01]: And he said, that's a fair, if not a friendly question.
• 24:35
  [SPEAKER_01]: And went on to say that, well, it's really been, this is something that Kevin Kelly was also editor of Wired Magazine at the time, was also, say, there's never been such a great time to be poor.
• 24:48
  [SPEAKER_01]: What are you talking about, you know, but they thought that because of their marvelous neoliberal policies, this is leading to development miracles in the developing world, and that they're getting richer and richer and better than ever, you know, and a thought wow, you really think that.
• 25:08
  [SPEAKER_01]: So, Summers defense of that memo was that they were being sarcastic and provocative, but don't take it seriously, but I think it really is.
• 25:16
  [SPEAKER_01]: There's a line in the memo.
• 25:19
  [SPEAKER_01]: that if you reject that logic, then you should reject all of the World Bank's policy measures.
• 25:26
  [SPEAKER_01]: And I thought, you know, there's truth to this.
• 25:29
  [SPEAKER_01]: You know, they really onto something.
• 25:30
  [SPEAKER_01]: If you think this is bad thinking, bad policy, and deeply inhuman, then you should question these kinds of neoliberal policies if the World Bank was posting around the world in those days.
• 25:42
  [SPEAKER_01]: But, you know, Larry thought they were doing wondering, wonder if things for the world's poor by deregulating financial markets.
• 25:48
  [SPEAKER_00]: Yeah, I don't know.
• 25:49
  [SPEAKER_00]: There's a kind of defensive memo as a kind of swifty and satire, but it's a modest proposal written by real kind of rules.
• 25:57
  [SPEAKER_00]: So, I actually put it in their ideas and actions.
• 26:01
  [SPEAKER_00]: So, so I don't quite see the satire in that particular case.
• 26:07
  [SPEAKER_00]: And I mean, it is interesting, I mean, as we're historically contextualizing all this stuff.
• 26:12
  [SPEAKER_00]: I mean, that 2000 moment, I mean, that is the sort of the release spring of all this sort of mass protest against globalization.
• 26:20
  [SPEAKER_00]: I think that was in the wake of the Battle of Seattle.
• 26:24
  [SPEAKER_00]: But I mean, like, obviously, from at that particular junction history, people like Summers were, it was fairly easy for them to be very dismissive.
• 26:31
  [SPEAKER_00]: And as you know, these are just a bunch of moralistic kids who the cops can take care of.
• 26:38
  [SPEAKER_01]: Yeah, this was April 2000, which is when the dot com bubble was really beginning to burst.
• 26:44
  [SPEAKER_01]: I think it peaked in March and started drifting lower.
• 26:48
  [SPEAKER_01]: So this was that moment was really becoming on top.
• 26:52
  [SPEAKER_01]: But I really really appreciate that at the moment.
• 26:55
  [SPEAKER_00]: Yeah, so subsequently, like Bush comes into power, and Summers is no longer in power, but then he's at Harvard, and he's sort of a bunch of different controversies.
• 27:07
  [SPEAKER_00]: I think one of which is sort of forgotten, but very relevant, which is that some of his underlings had been involved with economic shock therapy in Russia, and there were sort of
• 27:23
  [SPEAKER_00]: And I mean, certainly, if I want to say about the legacy of that kind of like Neal liberal era, I think that the Russian part of the story often gets neglected in the West, right?
• 27:33
  [SPEAKER_00]: I mean, certainly, like, you know, like, if we think about like, you know, why is Putin able to stay in power and has been so popular so long?
• 27:41
  [SPEAKER_00]: Well, one of the reasons is that the West is associated with this horrific period of like, you know, vast demographic and economic devastation.
• 27:52
  [SPEAKER_01]: Yes, there was several of his colleagues at Harvard and there was also a Harvard Institute of Economic Development.
• 27:56
  [SPEAKER_01]: That's also when Jeffrey Sachs was still a mitigated bad guy, and he was up at Harvard then, too.
• 28:02
  [SPEAKER_01]: So this was a crew of very arrogant American economists who thought they knew best for Russia on their prescribing shock therapy, overnight destruction of the old social
• 28:16
  [SPEAKER_01]: with no patients at all.
• 28:19
  [SPEAKER_01]: And at the time, I went to a World Bank IMF meeting and heard a, I am.
• 28:26
  [SPEAKER_01]: a presentation by Stanley Fisher, another elite economist, who was saying contrasting the Chinese and Russian experiences.
• 28:35
  [SPEAKER_01]: They said the Chinese state remained in total control of the process of a economical liberalization, whereas there is no state in Russia and the state completely collapsed.
• 28:46
  [SPEAKER_01]: So this was what these characters all recommended, sacks and summers and slifer and all these
• 28:54
  [SPEAKER_01]: that dismantling everything and just jumping headlong into capitalism would take care of everything.
• 29:00
  [SPEAKER_01]: As if there's no need for institution building or cushions against the shock therapy and it caused a tremendous disaster.
• 29:09
  [SPEAKER_01]: The Russian life expectancy collapsed.
• 29:12
  [SPEAKER_01]: Millions of people died really literally because of this policy.
• 29:15
  [SPEAKER_01]: and to just left this is what Putin moved into and stabilized.
• 29:22
  [SPEAKER_01]: Russia would have completely fallen apart, had Putin not taken over in those days.
• 29:27
  [SPEAKER_01]: And a lot of the problem was traceable to the policies advocated by the Clinton administration and their friends in Harvard and Larry was very much part of that culture.
• 29:36
  [SPEAKER_00]: Yeah, yeah, I don't know many of those people were his cronies.
• 29:38
  [SPEAKER_00]: I think this was one of the reasons why he got into hot water at Harvard.
• 29:42
  [SPEAKER_00]: I mean, there's also famous series of conflicts he had with the African American studies program there with Cornell last and then kind of infamous comment that he made that
• 29:54
  [SPEAKER_00]: If women have an achieve anything like quality in the fields of math and the sciences that that would be a matter of IQ And which again like you know goes back to this underlying ideology that we've stressed in this discussion But they're also so narrow
• 30:11
  [SPEAKER_01]: I heard this story of when he was Harvard president, the students were just back from the summer of their dulls.
• 30:16
  [SPEAKER_01]: It's nice weather.
• 30:17
  [SPEAKER_01]: They're all sitting out on the lawn.
• 30:19
  [SPEAKER_01]: Larry's making their rounds talking to these groups of students, and he sits down with one of them and says, okay, so what'd you read over the summer, one of them said, 100 years of solitude, and summer said, what's that?
• 30:32
  [SPEAKER_01]: So, you know, this is one of the most famous novels of our time, and this isn't one of the problems with this field of economics.
• 30:42
  [SPEAKER_01]: They're just completely ignorant, anything outside of their field.
• 30:45
  [SPEAKER_01]: They don't know sociology, which is kind of a close relative, and they certainly don't know anything about art or literature.
• 30:52
  [SPEAKER_01]: They're just fellow stains.
• 30:55
  [SPEAKER_01]: And you would think the present of Harvard would have heard of one of the most famous novels of our time, but he didn't.
• 31:01
  [SPEAKER_00]: Well, yes, I mean, and I think we might be able to return to that in a second, but I mean, in terms of that sort of Philistines, I mean, when you just said about like the the Russia policy and the shock therapy.
• 31:12
  [SPEAKER_00]: Like, to my mind, I mean, one thing that suggests is that these were leading a economist and policymakers who were not aware of, you know, the actual historical literature on capitalism.
• 31:26
  [SPEAKER_01]: You know, some of it would be more important to say new nothing about Russian society.
• 31:30
  [SPEAKER_00]: Yeah, yeah.
• 31:31
  [SPEAKER_00]: Well, yeah.
• 31:32
  [SPEAKER_00]: I mean, he's early, like, you know, like anyone who has, like, looked at the history of capitalism.
• 31:36
  [SPEAKER_00]: knows that like you know like strong state formation has always been like a prerequisite like you don't actually get natural markets you know like that the uh uh capitalist societies that we now have are product of the age of the absolutism in many ways.
• 31:53
  [SPEAKER_01]: Yeah, I mean, the markets have to be constructed and supported with state action.
• 31:57
  [SPEAKER_01]: And I think more people realize that now than you do, but in the 90s, it was the time when the market was a solution to everything.
• 32:04
  [SPEAKER_01]: And you know, you look at the Clinton health care proposal.
• 32:08
  [SPEAKER_01]: And very much like Obama's health care proposal.
• 32:12
  [SPEAKER_01]: It's all about creating markets where they didn't exist.
• 32:14
  [SPEAKER_01]: You're attempting to solve a social problem by creating markets.
• 32:18
  [SPEAKER_01]: And competition is supposed to take care of all the problems of these markets.
• 32:22
  [SPEAKER_01]: And obviously, it hasn't worked very well.
• 32:24
  [SPEAKER_01]: But that's the religion that, at least they had the sophistication to know that markets just didn't happen, that you had to create them.
• 32:32
  [SPEAKER_01]: But still, they are not the solution of the problems.
• 32:36
  [SPEAKER_01]: And that culture, we're seen to be exactly that.
• 32:41
  [SPEAKER_00]: you know absolutely and I mean I think yeah I mean the long career you know like he comes back into sort of power and through Obama and I think when he first comes back he had emphasized that they would have to look after home owners that you know would have been hurt by the financial crisis that he had no small part helped create but do you want to talk a little bit about that like his kind of role in the Obama era yeah well I mean on one side that you're the bailout of 2009
• 33:09
  [SPEAKER_01]: they didn't bail out the homeowners, they bail out the banks, yeah and that was I think accommodation of their flawed understanding of the world and their preference for dealing with some bankers rather than like poor people or lubricated in their mortgages and they could have could have saved a lot of trouble had they helped out people who were behind in their mortgages rather than helping out banks who did dumb things.
• 33:33
  [SPEAKER_01]: But he also insisted that Obama dial back the stimulus package after the crisis.
• 33:40
  [SPEAKER_01]: They, you know, they came initially with a big stimulus package.
• 33:44
  [SPEAKER_01]: But just a couple of months after Obama took office, he's on the phone or somebody is on the phone on his behalf to David Brooks saying, oh, yeah, once this is all over, we're gonna get on to cutting entitlements.
• 33:57
  [SPEAKER_01]: So, you know, they even at the midst of this financial crisis, they couldn't stop thinking of that kind of austerity and that austerity agenda that Democrats were had embraced in the 90s.
• 34:09
  [SPEAKER_01]: and into the 2000s, but then he insisted that summers insisted that they dialed back the size of it, and it was the stimulus with drawn pretty quickly after the crisis, and it took like two years just to regain all the lost employment during that crisis.
• 34:30
  [SPEAKER_01]: We had years,
• 34:36
  [SPEAKER_01]: and that wouldn't have happened had the ignored Larry's advice and kept the stuck with a larger stimulus program, but the weakness of that recovery after the financial crisis contributed greatly to the rise of the Tea Party, the Republican sweep, and the growth of right-wing politics generally as people felt really, they saw the bankers getting bailed up but not them and that led to a whole lot of resentments which the consequences of which were still living with really.
• 35:02
  [SPEAKER_00]: Yeah, no, I think that's a crucial part of the story.
• 35:06
  [SPEAKER_00]: I mean, if the 21st century has been the rise of anti-system politics on both the left and the right, I think the major reason has been the failure of sort of like a lead to establishment politics.
• 35:17
  [SPEAKER_01]: But again, more recently, when we have inflation in 2022, when inflation was rising, very disastrous.
• 35:24
  [SPEAKER_01]: I mean, you know, a lot of political consequences, which also are still with us.
• 35:29
  [SPEAKER_01]: But summers, reaction to that was that we needed to see a really sharp rise on employment.
• 35:35
  [SPEAKER_01]: We needed, as he put it, five years of unemployment above 5%
• 35:39
  [SPEAKER_01]: or two years of seven and a half, five years of six percent or one year of ten percent.
• 35:44
  [SPEAKER_01]: So this would have meant throwing somewhere between three and ten million people out of work depending on which part of his formula he used.
• 35:53
  [SPEAKER_01]: And he just was insane.
• 35:55
  [SPEAKER_01]: I mean, he said that just as the inflation was peaking and beginning to decline.
• 36:00
  [SPEAKER_01]: But he wanted to create mass unemployment.
• 36:03
  [SPEAKER_01]: And fortunately, the Federal Reserve ignored him.
• 36:07
  [SPEAKER_01]: And I have to, you know, I'm not known as a fan of the Federal Reserve, but I think they did a pretty good job of bringing a flesh and down without causing those sorts of disruptions.
• 36:16
  [SPEAKER_01]: But Larry, one of those disruptions.
• 36:19
  [SPEAKER_01]: I was just what outrageous thing to call for, 10% unemployment.
• 36:24
  [SPEAKER_01]: in the way after, you know, this massive disease crisis, that's just cruel.
• 36:31
  [SPEAKER_01]: Yeah, I wouldn't say unusual, it's, it's cruel and typical punishment, but, uh, it's just really awful politics and turned out that economics too because the inflation was beginning to decline anyway.
• 36:44
  [SPEAKER_00]: That's right, that's right.
• 36:45
  [SPEAKER_00]: I'd mention, and I'd like your thoughts on this is just how that's the only solution to inflation.
• 36:53
  [SPEAKER_00]: He's willing to sort of contemplate, and I think the sort of more heterodox ideas of bringing back price control or going after price cabging, those tended to be treated with great contempt by the sort of Larry Summers of the world.
• 37:10
  [SPEAKER_01]: The really smart people, you know.
• 37:12
  [SPEAKER_00]: Really smart people.
• 37:13
  [SPEAKER_00]: Yeah, yeah.
• 37:14
  [SPEAKER_00]: So that's another way which possibilities are kind of foreclosed.
• 37:20
  [SPEAKER_00]: So we're coming to the end of this question.
• 37:22
  [SPEAKER_00]: We've only like, we haven't really touched on the Jeffrey Epstein stuff.
• 37:26
  [SPEAKER_00]: But I think maybe you like to mention it and maybe tie it in with everything.
• 37:30
  [SPEAKER_00]: I mean, I think one way to think about this.
• 37:32
  [SPEAKER_00]: And one way to think about Jeffrey Epstein in general is this whole idea of a sort of like a technocratic elite.
• 37:39
  [SPEAKER_00]: of inciders and, you know, like, as always, I mean, Jeffrey Epstein, yeah, as a Christian in the nation, if you look at, like, you know, he was a third-way guy.
• 37:51
  [SPEAKER_00]: Like, he actually, like, literally was, in one of his emails was like, you know, celebrating, I think that group, a third-way that wants to feel that independent candidate that is, like, you know, socially liberal, but physically conservative.
• 38:09
  [SPEAKER_00]: all of that sort of like 1990's cohort, the sort of Washington consensus, American military, head of one around the world with Israel as a particularly prized ally.
• 38:22
  [SPEAKER_00]: And a kind of sort of like a male centered hedonism, you know, that is a particular sort of cultural cohort.
• 38:30
  [SPEAKER_00]: Now I was like, it's not like everyone who thinks that way is Jeffrey Epstein, but Epstein is perhaps like a more extreme end of that spectrum.
• 38:39
  [SPEAKER_01]: Well, you know, to follow the lessons of Sigmund Freud, that you can sometimes follow lessons about the normal, or derived lessons about the normal from the behavior of the extremes.
• 38:48
  [SPEAKER_01]: And I think Epstein reveals something about that culture.
• 38:52
  [SPEAKER_01]: And it also, you know, that story I was telling earlier of Larry walking through the party and looking at all the women up and down, there's a sense in which
• 39:00
  [SPEAKER_01]: Now, everything, women, nature, money, it's all mine, you know, and it's all mine by right because I'm so smart and excellent.
• 39:09
  [SPEAKER_01]: And I think that association with Epstein, you know, I really doubt that Larry was running around teenage girls, but on the other hand, he did certainly associate with someone who thought that was fine and Larry seemed undisturbed.
• 39:24
  [SPEAKER_01]: He stayed friends with him after he was convicted of it, it's not like it was just rumors,
• 39:30
  [SPEAKER_01]: That's sort of behavior.
• 39:32
  [SPEAKER_00]: I don't know if you have to say for like advice on how to conduct a deal.
• 39:40
  [SPEAKER_00]: Like the fair with what can you describe as his mentee?
• 39:43
  [SPEAKER_01]: Yeah, and they nicknamed her pearl because she was Chinese, which is just, you know, that's just disgusting in itself.
• 39:50
  [SPEAKER_01]: But I will say she wasn't a accomplished person of pretty mature age, so it's not like he is going after 14-year-olds, or even a graduate student, but still, it was really weird to be asking Jeffrey Epstein for a love advice.
• 40:07
  [SPEAKER_01]: But you know, that great picture of Epstein with all those Harvard luminaries like Alan Dershowitz was also a defense attorney and Steven
• 40:19
  [SPEAKER_01]: I said to say that Noom Chomsky is not in that picture, but part of that circle, I did my or no, but normally, and I really don't understand why he had that weakness for Jeffrey Epstein.
• 40:28
  [SPEAKER_01]: But yeah, there's something about that kind of elite male culture, the time.
• 40:33
  [SPEAKER_01]: That Epstein was like the toxic embodiment of, and Larry, very much part of that.
• 40:41
  [SPEAKER_00]: No, absolutely absolutely.
• 40:42
  [SPEAKER_00]: And I mean, just as close as the element of Philistines I don't think can be neglected there as well.
• 40:49
  [SPEAKER_00]: I mean, Summers' wife was like a Harvard endowed professor, you know, was like trying to professor, professor, professor, professor.
• 40:57
  [SPEAKER_00]: And has this kind of like,
• 40:58
  [SPEAKER_00]: you know, I think kind of tacky program of getting celebrities to, you know, the videotape of recording poetry got financing from Epstein for this project.
• 41:09
  [SPEAKER_00]: I was also like, you know, I think very superfluously, and I have to say it's almost in a Philistine way, you know, recommending books to Epstein about,
• 41:19
  [SPEAKER_00]: men attracted to younger girls, including my and Tonya, which I think she's actually actually wrong about because in that novel, the narrator is younger than the woman he falls in love with, but also Navacov's Lolita, and you know, like I just have to say, like, you know, like, I don't really, this seems to be something very, to me, I don't think you need to recommend Lolita to Jeffy Epstein.
• 41:44
  [SPEAKER_01]: I think the people say he had this bench side table.
• 41:48
  [SPEAKER_01]: This is like Trump had Hitler's speeches and his bench side table.
• 41:52
  [SPEAKER_01]: Yeah, yeah, yeah, yeah.
• 41:54
  [SPEAKER_01]: His previous wife.
• 41:55
  [SPEAKER_01]: So, you know.
• 41:56
  [SPEAKER_00]: Yeah, but I mean, he goes again, back to that, the idea, because I do actually think Lilita is a satire, a recession set around to his, but these are not people who are maybe a tune to satire and they're, as I said before, they're reading a modest proposal for the point of view of being cannibals.
• 42:13
  [SPEAKER_01]: Yeah, it's like an instruction manual for that.
• 42:16
  [SPEAKER_00]: Yeah, yeah, they're reading Lolita as a how-to book, which I don't think, in any case, but that is a very significant culture in the ruling class.
• 42:27
  [SPEAKER_00]: And on that note, I want to thank my guest that I can wood who has been, one of the great chroniclers of this ruling class for this discussion of Larry Summers and his world.
• 42:40
  [SPEAKER_01]: All right, thank you.