Summers brings experience in crisis to economics role

McClatchy NewspapersNovember 24, 2008 

Lawrence Summers, National Economic Council director-designate, in 2005

CHUCK KENNEDY / MCT

WASHINGTON — By designating Lawrence Summers to direct his National Economic Council, President-elect Barack Obama gets a man with wide experience in handling international financial crises.

Summers' role will be to coordinate administration-wide economic policy from inside the White House. He led the Treasury Department during the final two years of the Clinton administration, and served at Treasury for most of the Clinton era. He was one of the key decision-makers during the global financial crisis sparked by Mexico's collapse in late 1994 and during the Asian and Russian crises in the late 1990s.

Widely viewed as one of the nation's top economic thinkers, Summers, 53, has been criticized his by peers as arrogant and aloof. Some of that comes from his intensity and intellect. He entered the Massachusetts Institute of Technology at 16, and became one of the youngest-ever tenured professors at Harvard. In 1993, he won the prestigious John Bates Clark Medal, awarded every two years by the American Economic Association to the most outstanding economist under age 40.

Summers is a known quantity — a matter of importance during a time of such economic uncertainty.

"He has the political connections. He is a credible figure in both the Senate and on Capitol Hill generally," said Vincent Reinhart, a former director of the Federal Reserve and now a resident scholar at the American Enterprise Institute, a conservative research group.

Gary Gensler was assistant secretary at Treasury during the second Clinton term and recalls fondly his time with Summers.

"I think that Larry brings an enormous capacity of intellect, curiosity and contextual experience," Gensler said. He added that Summers has an open mind and has worked in a crisis environment something like today's in the 1998 Asian meltdown.

"I've spent a lot of time with Larry on this financial crisis. What's terrific about Larry is he can change in mind. He was really a critical player on everything on the international front," he said.

Summers also was the chief economist of the World Bank from 1991 to 1993. A memo he wrote there encouraging the export of toxic waste to less-developed countries ignited a controversy, with human-rights and environmental activists critical of his stand.

After the Clinton administration, Summers became president of Harvard University, where he ignited another controversy by suggesting in 2005 that women may not have the same innate abilities that are required to excel in science and math as men. That led the faculty to a no-confidence vote in him that forced him from the presidency in 2006.

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