President of Harvard (2001–2006) In 2001, when
George W. Bush became President, Summers left the Treasury Department and returned to Harvard as its 27th president, serving from July 2001 until June 2006. though his predecessor
Neil Rudenstine's father was Jewish. A number of Summers's decisions at Harvard have attracted public controversy, either at the time or since his resignation.
Cornel West In an October 2001 meeting, Summers criticized African American Studies department head
Cornel West for allegedly 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 against the accusations. West, who later called Summers both "uninformed" and "an unprincipled power player" in describing this encounter in his book
Democracy Matters (2004), subsequently returned to
Princeton University, where he had taught prior to Harvard University.
Differences between the sexes controversy In January 2005, at a Conference on Diversifying the Science & Engineering Workforce sponsored by the
National Bureau of Economic Research, Summers sparked controversy with his discussion of why women may have been underrepresented "in tenured positions in science and engineering at top universities and research institutions". The conference was designed to be off-the-record so that participants could speak candidly without fear of public misunderstanding or disclosure later. Summers had prefaced his talk, saying he was adopting an "entirely
positive, rather than
normative approach" and that his remarks were intended to be an "attempt at provocation". Summers then began by identifying three hypotheses for the higher proportion of men in high-end science and engineering positions: • The high-powered job hypothesis • Different availability of
aptitude at the high end • Different socialization and patterns of discrimination in a search leading to proportionally more males than females at both the lower and upper tails of the test score distributions, caused the most controversy. In his discussion of this hypothesis, Summers said that "even small differences in the standard deviation [between genders] will translate into very large differences in the available pool substantially out [from the mean]". Summers's protégée
Sheryl Sandberg defended him, saying that "Larry has been a true advocate for women throughout his career" at the World Bank and Treasury.
Summers's opposition and support at Harvard On March 15, 2005, members of the
Harvard Faculty of Arts and Sciences, which instructs graduate students in
Harvard Graduate School of Arts and Sciences and undergraduates in
Harvard College, passed 218–185 a motion of "lack of confidence" in the leadership of Summers, with 18 abstentions. A second motion that offered a milder censure of the president passed 253 to 137, also with 18 abstentions. The members of the
Harvard Corporation, the university's highest governing body, are in charge of the selection of the president and issued statements strongly supporting Summers. FAS faculty were not unanimous in their comments against Summers. Also, Summers had stronger support among Harvard College students than among the college faculty. One poll by
The Harvard Crimson indicated that students opposed his resignation by a three-to-one margin, with 57% of responding students opposing his resignation and 19% supporting it.
Support of economist Andrei Shleifer Harvard and
Andrei Shleifer, a close friend and protégé of Summers, controversially paid $28.5 million to settle a
lawsuit by the U.S. government over the
conflict of interest Shleifer had while advising
Russia's privatization program. The US government had sued Shleifer under the
False Claims Act, as he bought Russian stocks while designing the country's
privatization. In 2004, a federal judge ruled that while Harvard had violated the contract, Shleifer and his associate alone were liable for
treble damages. In June 2005, Harvard and Shleifer announced that they had reached a tentative settlement with the US government. In August, Harvard, Shleifer, and the
Department of Justice reached an agreement under which the university paid $26.5 million to settle the five-year-old lawsuit. Shleifer was also responsible for paying $2 million worth of damages. Because Harvard paid almost all of the damages and allowed Shleifer to retain his faculty position, the settlement provoked allegations of favoritism on the part of Summers. His continued support for Shleifer weakened Summers's popularity with other professors, as reported in
The Harvard Crimson: Frederick H. Abernathy, the McKay professor of mechanical engineering, stated, "I was deeply shocked and disappointed by the actions of this University" in the Shleifer affair.
Shleifer–Russia relations An 18,000-word article "How Harvard Lost Russia" in
Institutional Investor by David McClintick detailed Shleifer's and his wife's alleged efforts to use his
inside knowledge of and sway over the Russian economy in order to make lucrative personal investments, Summers's friendship with Shleifer was well known by the corporation when it selected him to succeed Rudenstine and Summers recused himself from all proceedings with Shleifer, whose case was actually handled by an independent committee led by former Harvard president
Derek Bok.
Winklevoss twins and Facebook In February 2004, the
Winklevoss twins requested a meeting with Summers in order to ask him to intervene on their behalf in an ongoing dispute they had with Facebook founder
Mark Zuckerberg. The Winklevosses believed that Zuckerberg had stolen their idea for a social networking website and launched Facebook on his own, after they had asked him to be a part of their project, then called HarvardConnection. Summers believed that the matter was outside the university's jurisdiction and advised the twins to take their complaint to the courts.
Resignation as Harvard President On February 21, 2006, Summers announced his intention to step down at the end of the school year effective June 30, 2006. Harvard agreed to provide Summers on his resignation with a one-year paid
sabbatical leave, subsidized a $1 million outstanding loan from the university for his personal residence, and provided other payments. Former University President
Derek Bok acted as Interim President while the university conducted a search for a replacement which ended with the naming of
Drew Gilpin Faust on February 11, 2007. The controversy probably cost him the opportunity to service as
Treasury Secretary (for a second time) in
Obama's administration in 2009. Over a decade later, in 2016, remarking upon
political correctness in institutions of higher education, Summers said: There is a great deal of absurd political correctness. Now, I'm somebody who believes very strongly in diversity, who resists racism in all of its many incarnations, who thinks that there is a great deal that's unjust in American society that needs to be combated, but it seems to be that there is a kind of creeping totalitarianism in terms of what kind of ideas are acceptable and are debatable on college campuses.
After Harvard presidency (2006–2009) After a one-year sabbatical, Summers accepted Harvard University's invitation to serve as the
Charles W. Eliot University Professor, one of 20
select University-wide professorships, with offices in the
Kennedy School of Government and the
Harvard Business School.
2008 Financial Crisis When
George Stephanopoulos asked Summers about the
2008 financial crisis in an ABC interview on March 15, 2009, Summers replied that "there are a lot of terrible things that have happened in the last eighteen months, but what's happened at
A.I.G. [...] the way it was not regulated, the way no one was watching [...] is outrageous." In February 2009, Summers quoted
John Maynard Keynes, saying "When circumstances change, I change my opinion", reflecting both on the failures of
Wall Street deregulation and his new leadership role in the government bailout. On April 18, 2010, in an interview on ABC's
This Week program, Clinton said Summers was wrong in the advice he gave him not to regulate derivatives.
Obama National Economic Council (2009–2010) , on left, discusses with a group in the White House, including Larry Summers on far right (back to camera). Upon the inauguration of
Barack Obama as president in January 2009, Summers was appointed to the post of director of the
National Economic Council. In this position Summers emerged as a key economic decision-maker in the Obama administration, where he attracted both praise and criticism. There had been friction between Summers and former Federal Reserve Chairman
Paul Volcker, as Volcker accused Summers of delaying the effort to organize a panel of outside economic advisers, and Summers had cut Volcker out of White House meetings and had not shown interest in collaborating on policy solutions to the economic crisis. On the other hand, Obama himself was reportedly thrilled with the work Summers did in his first few weeks on the job. And
Peter Orszag, another top economic advisor, called Summers "one of the world's most brilliant economists." According to
Henry Kissinger Larry Summers should "be given a White House post in which he was charged with shooting down or fixing bad ideas". In January 2009, as the
Obama Administration tried to pass an economic stimulus spending bill, Representative
Peter DeFazio (
D-
OR) criticized Summers, saying that he thought that President Barack Obama is "ill-advised by Larry Summers. Larry Summers hates infrastructure." DeFazio, along with liberal economists including
Paul Krugman and
Joseph Stiglitz, had argued that more of the stimulus should be spent on infrastructure, while Summers had supported tax cuts. In late 2008, Summers and economic advisors for then-President-elect Obama presented a memo with options for an economic stimulus package ranging from $550 billion to $900 billion. According to
The New Republic, economic advisor
Christina Romer initially recommended a $1.8-trillion package, which proposal Summers quickly rejected, believing any stimulus approaching $1 trillion would not be passed by Congress. Romer revised her recommendation to $1.2 trillion, which Summers agreed to include in the memo, but Summers struck the figure at the last minute. According to
the Wall Street Journal, Summers called Senator
Chris Dodd (D-
CT) asking him to remove caps on executive pay at firms that have received stimulus money, including Citigroup. On April 3, 2009, Summers came under renewed criticism after it was disclosed that he was paid millions of dollars the previous year by companies which he now had influence over as a
public servant. He earned $5 million from the
hedge fund D.E. Shaw and collected $2.7 million in speaking fees from
Wall Street companies that received government
bailout money.
Career after NEC (2010– ) in Ukraine Since leaving the NEC in December 2010, Summers has worked as an advisor to Citigroup and the
NASDAQ OMX Group while resuming his role as a tenured Harvard professor. and became a special adviser at venture capital firm
Andreessen Horowitz. He joined the board of person-to-person lending company
Lending Club in December 2012. In July 2015 Summers joined the Board of Directors of Premise Data, a San Francisco-based data and analytics technology company that sources data from a global network of on-the-ground contributors.
Federal Reserve chair and Bank of Israel governor candidacy In 2013, Summers was Obama's preferred candidate to succeed
Ben Bernanke as
chair of the Federal Reserve. The same year, it was reported that Summers was a candidate to succeed
Stanley Fischer as governor of the
Bank of Israel. Netanyahu personally asked Summers to take the post, which he declined in October 2013.{{cite news |author= |title=Larry Summers rejects offer to become BoI governor == Relationship with Jeffrey Epstein ==