Larry Summers

• 1. Introduction

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  Larry Summers, born Lawrence Henry Summers, was 28 years old in 1983 when Harvard gave him tenure, making him one of the youngest tenured professors in the university's history. Soon afterward, doctors diagnosed him with late-stage Hodgkin's lymphoma. He went through nine months of chemotherapy and has remained cancer-free since. The young professor who survived that year went on to hold some of the most visible economic posts in the United States. He served as Secretary of the Treasury, as president of Harvard, and as a top economic adviser to a president during the Great Recession. Yet his career kept turning on controversy. A leaked memo, a lunchtime speech, a faculty vote and a private correspondence each reshaped how people saw him. How does an economist so trusted by presidents become so divisive? What did he actually do in the financial crises he helped manage? And which of his decisions are still argued over today?

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• 2. Making of an Economist

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  Robert Summers and Anita Summers, both professors at the University of Pennsylvania, were economists, and their son Lawrence was born in New Haven, Connecticut, on the 30th of November 1954. The family was Jewish, and Anita had Romanian-Jewish ancestry. Robert had changed the family surname from Samuelson. His brother was Paul Samuelson, and Anita's brother was Kenneth Arrow. Both uncles became Nobel laureates in economics. Lawrence spent most of his childhood in Penn Valley, Pennsylvania, a suburb of Philadelphia, and attended Harriton High School.

  At age 16, he entered the Massachusetts Institute of Technology, intending to study mathematics. He soon switched to economics and graduated in 1975. He also joined the debating team and qualified three times for the annual National Debate Tournament. He then went to Harvard as a graduate student and received his Ph.D. in 1982. In 1984 he married Victoria Joanne Perry, a tax attorney and legal scholar he had met in Cambridge, Massachusetts, while she was preparing to enter Harvard Law School. They had three children, twin girls and a son.

  Between 1982 and 1983, Summers worked on the staff of the Council of Economic Advisers under President Reagan. In 1987 he spent time as a visiting academic at the London School of Economics. That same year he became the first social scientist to win the Alan T. Waterman Award from the National Science Foundation. In 1988 he served as an economics adviser to the Dukakis presidential campaign. His research ranged across public finance, labor economics, financial economics and macroeconomics. He also worked in international economics, economic demography, economic history and development economics. The American Economic Association awarded him the John Bates Clark Medal in 1993, and he is a member of the National Academy of Sciences. Among his popular courses were American Economic Policy and The Political Economy of Globalization.

  In 1991, Summers left Harvard and returned to Washington, D.C., as Vice President of Development Economics and Chief Economist of the World Bank. According to the bank, he played a key role in designing strategies to aid developing countries. He also worked on the loan committee and guided the bank's research, statistics and external training programs. The bank's official site credits him with an influential report showing a very high return from investing in the education of girls in developing nations. The Economist described him as often at the centre of heated debates, and called him a famous contrarian.

  In December 1991, a memo that Summers signed leaked to the press. It stated that "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that." It also said, "I've always thought that under-populated countries in Africa are vastly underpolluted." Lant Pritchett has claimed authorship of the private memo. Both he and Summers say it was meant as sarcasm, and Pritchett says the leaked version was doctored to remove context and irony. By 1993, Summers had moved on to the United States Treasury.

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• 3. Crisis Years

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  In 1993, President Bill Clinton's administration appointed Summers Under Secretary for International Affairs at the Treasury Department. Two years later he was promoted to Deputy Secretary under Robert Rubin, his long-time political mentor. In 1999 he succeeded Rubin and became the 71st Secretary of the Treasury. Much of his tenure focused on international economic problems.

  The Mexican economic crisis of 1994 opened a run of emergencies that defined those years. The 1997 Asian financial crisis and the 1998 Russian financial crisis followed. Summers played a leading role in the American response to all three. He was deeply involved in the Clinton administration's effort to bail out Mexico and Russia when those nations faced currency crises.

  Russia pulled him in through a second route. Between 1992 and 1997, the Harvard Institute for International Development advised the Russian government, through a project that Summers set up. A scandal later erupted when it emerged that some members of the Harvard project had invested in Russia and so were not impartial advisers. Summers urged Russian leader Boris Yeltsin to adopt the same formula he promoted in the Clinton administration. It could be summed up in three words: privatization, stabilization and liberalization.

  During the 1997 Asian financial crisis, Summers pressed the Korean government to raise interest rates and balance its budget in the middle of a recession. Paul Krugman and Joseph Stiglitz criticized those policies. Paul Blustein's book The Chastening reports that Summers and Paul Wolfowitz pushed for regime change in Indonesia during the same crisis.

  Internal documents made public in 2009 show that Summers was a leading voice inside the Clinton administration against American leadership in cutting greenhouse gases. He also argued against American participation in the Kyoto Protocol. In 1999, as Treasury Secretary, he led the administration's opposition to tax cuts proposed by the Republican Congress. During the California energy crisis of 2000, he joined Alan Greenspan and Enron executive Kenneth Lay in lecturing California Governor Gray Davis. They told Davis that excessive government regulation was the problem. Following Lay's advice, Summers urged Davis to relax California's environmental standards in order to reassure the markets.

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• 4. Deregulation Debates

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  On the 7th of May 1998, the Commodity Futures Trading Commission issued a Concept Release asking regulators, academics and practitioners how best to oversee the over-the-counter derivatives market without stunting its growth. On the 30th of July 1998, Deputy Treasury Secretary Summers answered before Congress. He said the parties to such contracts were largely sophisticated financial institutions "eminently capable of protecting themselves from fraud and counterparty insolvencies." He added that there was "no clear evidence of a need for additional regulation" of the institutional market. In his view, those who proposed such regulation had to demonstrate the need for it.

  In 1999, Summers endorsed the Gramm-Leach-Bliley Act, which removed the separation between investment and commercial banks. "With this bill, the American financial system takes a major step forward towards the 21st Century," he said. The law repealed key provisions of the 1933 Glass-Steagall Act and lifted more than six decades of restrictions on banks. After the vote, Summers described the result as the replacement of old rules with "a system for the 21st century." He predicted it would help American companies compete in the new economy.

  Many critics, including President Barack Obama, have suggested that the partial repeal of Glass-Steagall helped cause the subprime mortgage crisis of 2007-2010. Summers also sat on President Clinton's Working Group on Financial Markets. Alongside Securities and Exchange Commission Chairman Arthur Levitt, Fed Chairman Greenspan and Secretary Rubin, he helped block an effort to regulate financial derivatives. Many people blame those derivatives for bringing down the financial market in the fall of 2008.

  On the 18th of April 2010, President Clinton went on ABC's This Week and said that Summers had been wrong in advising him not to regulate derivatives.

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• 5. Harvard Presidency

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  In July 2001, Summers returned to Harvard as its 27th president, a post he held until June 2006. He was the university's first Jewish president, although the father of his predecessor Neil Rudenstine was Jewish. Several of his decisions drew public controversy, either at the time or in the years after he resigned.

  In an October 2001 meeting, Summers criticized Cornel West, head of the African American Studies department. He accused West of missing three weeks of classes to work on the Bill Bradley presidential campaign, and complained that West was contributing to grade inflation. West pushed back strongly. In his 2004 book Democracy Matters, he called Summers both "uninformed" and "an unprincipled power player." West returned to Princeton University, where he had taught before Harvard.

  In February 2004, the Winklevoss twins asked to meet Summers about a dispute with Facebook founder Mark Zuckerberg. They believed he had taken their idea for a social networking website, then called HarvardConnection, and launched Facebook on his own. Summers judged the matter outside the university's jurisdiction and told the twins to take their complaint to the courts. The 2010 film The Social Network shows this meeting, with Douglas Urbanski playing Summers.

  Andrei Shleifer, a close friend and protégé of Summers, was a Harvard economist who had advised Russia's privatization program. The United States government sued him under the False Claims Act because he bought Russian stocks while designing the country's privatization. In 2004, a federal judge ruled that Harvard had violated its contract, but that Shleifer and his associate alone were liable for treble damages. In August 2005, Harvard, Shleifer and the Department of Justice reached an agreement. Harvard paid $26.5 million, and Shleifer was responsible for $2 million in damages.

  Because Harvard paid almost all of the damages and let Shleifer keep his faculty position, critics alleged favoritism on the part of Summers. Frederick H. Abernathy, a professor of mechanical engineering, told The Harvard Crimson, "I was deeply shocked and disappointed by the actions of this University." An 18,000-word article titled "How Harvard Lost Russia," by David McClintick in Institutional Investor, suggested that Summers had shielded Shleifer from discipline. It also noted that Summers had warned Shleifer and his wife, Nancy Zimmerman, about conflict-of-interest rules in 1996. Summers had recused himself from the proceedings, and a committee led by former Harvard president Derek Bok handled the case.

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• 6. Speech and Vote

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  In January 2005, the National Bureau of Economic Research sponsored a Conference on Diversifying the Science and Engineering Workforce. The organizers had made it off-the-record so that participants could speak candidly. Summers told the room he would take an "entirely positive, rather than normative approach" and described his remarks as an "attempt at provocation." He then offered three hypotheses for why men outnumber women in high-end science and engineering jobs. The first was the demands of high-powered jobs. The second was a different availability of aptitude at the high end. The third was different socialization and patterns of discrimination.

  The second hypothesis caused the most controversy. It held that men show greater variability than women on cognitive tests, leaving proportionally more men at both the low and high ends. Summers said that "even small differences in the standard deviation" would produce very large differences in the pool far from the mean. He cited research suggesting different standard deviations among the top 5% of twelfth graders.

  Summers closed by calling socialization and continuing discrimination "lesser factors" that reinforce questions of intrinsic aptitude. "I would like nothing better than to be proved wrong," he said, because he hoped the problems could be solved simply by everyone understanding them. He then discussed ways to remedy the shortage of women in these fields. The talk drew accusations of sexism and careless scholarship, and the response was intense at Harvard and nationally. His repeated apologies did no good. His protégée Sheryl Sandberg defended him, saying, "Larry has been a true advocate for women throughout his career."

  On the 15th of March 2005, the Harvard Faculty of Arts and Sciences passed a motion of "lack of confidence" in Summers's leadership by 218-185, with 18 abstentions. A second, milder censure passed 253-137, again with 18 abstentions. The Harvard Corporation, the university's highest governing body, issued statements strongly supporting him. Faculty members were not unanimous against him, and he had stronger support among Harvard College students. A poll by The Harvard Crimson found 57% of responding students opposed his resignation and 19% supported it.

  On the 21st of February 2006, Summers announced he would step down effective the 30th of June 2006. Harvard gave him a one-year paid sabbatical, subsidized a $1 million outstanding loan on his home, and made other payments. Derek Bok served as interim president until Drew Gilpin Faust was named on the 11th of February 2007. The controversy probably cost him a second term as Treasury Secretary in Obama's administration. In 2016, Summers spoke of "a kind of creeping totalitarianism" in what ideas are acceptable on college campuses.

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• 7. Obama Years and After

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  In November 2006, the New York hedge fund D. E. Shaw & Co. hired Summers to work one day a week. Over the next 16 months he received $5.2 million. In 2008 he also earned $2.7 million in speaking fees from major financial institutions, including Goldman Sachs, JPMorgan Chase, Citigroup, Merrill Lynch and Lehman Brothers. When Clinton nominated him for Treasury in 1999, he had listed assets of about $900,000 and debts of $500,000. By 2009 he reported a net worth between $17 million and $39 million.

  In January 2009, upon Barack Obama's inauguration, Summers became director of the National Economic Council. In February 2009 he quoted John Maynard Keynes, saying, "When circumstances change, I change my opinion." On the 15th of March 2009, George Stephanopoulos asked him on ABC about the financial crisis. Summers called what happened at A.I.G. "outrageous," citing the way it was not regulated and the way no one was watching.

  Inside the White House, his views on the stimulus bill drew fire. In late 2008, Summers and Obama's advisers presented a memo with stimulus options ranging from $550 billion to $900 billion. According to The New Republic, Christina Romer first recommended $1.8 trillion, and Summers quickly rejected it. He believed Congress would not pass anything near $1 trillion. Romer revised her figure to $1.2 trillion, and Summers agreed to include it. At the last minute, though, he struck the figure. Representative Peter DeFazio said, "Larry Summers hates infrastructure," while Summers favored tax cuts. Paul Volcker accused him of delaying an outside advisory panel. Peter Orszag, by contrast, called him "one of the world's most brilliant economists."

  On the 3rd of April 2009, Summers faced renewed criticism over the money he had earned from firms he now influenced as a public servant. After leaving the council in late 2010, he advised Citigroup and the NASDAQ OMX Group and resumed his tenured Harvard role. He joined the board of Square in June 2011, and he became a special adviser at Andreessen Horowitz. In 2013 he became an early angel investor in Zoomcar, India's first car rental company, started by his former Harvard Teaching Fellow.

  In 2013, Obama preferred Summers to succeed Ben Bernanke as chair of the Federal Reserve. Senators of both parties worried about his financial ties to investment banks and hedge funds. On the 15th of September, he withdrew, writing that a confirmation process "would be acrimonious." That same year, Netanyahu personally asked him to become governor of the Bank of Israel, and Summers declined in October 2013.

  In 2016, Summers called the Brexit vote the "worst self-inflicted policy wound that a country has done since the Second World War." In 2021, he called the $1.9 trillion American Rescue Plan Act "the least responsible macroeconomic policy we've had in the last 40 years." In November 2023, he joined the board of the artificial intelligence organization OpenAI.

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• 8. Epstein Fallout

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  In 2003, The Harvard Crimson reported a "special connection" between Summers, then Harvard's president, and the financier Jeffrey Epstein. Epstein pledged at least $25 million to endow Harvard's Program for Evolutionary Dynamics and was given an office there. Epstein otherwise had no formal connection to the university. Flight records introduced at the 2021 trial of Epstein associate Ghislaine Maxwell show that Summers flew on Epstein's private plane at least four times. One flight came in 1998, and at least three came while he was Harvard's president. A charity funded by Epstein also donated to a PBS show hosted by Summers's wife, Harvard professor Elisa New. Summers had met New in 2001, and they married in December 2005.

  In 2014, Summers emailed Epstein asking for "small scale philanthropy advice" for his wife's nonprofit. On the 12th of November 2025, documents released by Congress revealed frequent email contact between the two men from 2017 to 2019. From November 2018 until the 5th of July 2019, a day before Epstein's arrest, Summers sought Epstein's advice on pursuing a sexual relationship with a woman he described as a mentee. Summers said his association with Epstein was "a major error of judgement."

  On the 14th of November 2025, President Trump directed the Department of Justice to investigate Epstein's relationships with several people, including Summers. Three days later, Summers stepped back from public commitments. These included advisory roles at the Yale Budget Lab and the Hamilton Project, a fellowship at the Center for American Progress, and the chairmanship of the Center for Global Development. On the 18th of November 2025, he ended his role as a paid contributor to Bloomberg News. He went on leave from his Harvard teaching and from directing the Mossavar-Rahmani Center for Business and Government. He also resigned from the OpenAI board.

  His earlier ties had already cost him some roles. In 2023, detailed reporting by The Wall Street Journal on his years of fund-raising for Harvard with Epstein led him to resign from Genie Energy and from Bari Weiss's University of Austin. On the 2nd of December 2025, the American Economic Association imposed a lifetime ban, barring him from membership and from its events. On the 25th of February 2026, Summers announced he would resign his Harvard professorship and his directorship of the Mossavar-Rahmani Center at the end of the 2025-2026 academic year.

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