Larry: Superstar? Or Supernova?

Don’t be too sure

In Economic Principal’s time on the job, only two have come to be called, at least within the profession, by their first name. Marty and Larry. A second echelon of the first-name famous exists but such intimacy is within particular fields.

There is a second echelon of first-name superstars, but they are associated with fields: Milton (Friedman), Gary (Becker), Amartya (Sen), Danny (Kanemann), Claudia (Goldin), and Janet (Yellen). Paul Krugman is also a superstar, but very few people call him Paul.

Martin Feldstein and Lawrence Summers are different. Only Ben (Bernanke) compares. As op-ed authors, Feldstein and Summers, the two men covered the breadth of most economic topics: inflation and unemployment, taxes and growth, international economics and finance. Feldstein, born in 1939, died in 2019, a few months short of his eightieth birthday. Summers, born in 1954, survived a battle with Hodgkin’s lymphoma at 30, and has been in remission ever since.

How did they become superstars? Distinguished scholarship was a beginning. Presidential campaign advisor came next. Then government service came next, Feldstein was chairman of the Council of Economic Advisors under President Ronald Reagan. Summers was deputy to investment banker Robert Rubin when Rubin was National Economic Advisor, then followed his boss to the Treasury Department, ending up as Secretary himself. Civilian attainment came next. Feldstein was president of the National Bureau of Economic Research. Summers was named president of Harvard University.

Feldstein was president of the NBER for thirty years. Summers suffered a series of disappointments. George W. Bush defeated Al Gore in 2000, depriving Summers of his Treasury job. He resigned his Harvard presidency after five years, amid a storm of faculty criticism. He advised Hillary Clinton in 2008, then served President Barack Obama as National Economic Advisor for two years; afterwards, he failed to get the job he wanted, as Chairman of the Federal Reserve Board, Janet Yellen was chosen instead.

Summers returned to teach at Harvard’s Kennedy School of Government. He remarried, and spent his honeymoon on the private island of financier Jeffrey Epstein. In 2013, he declined an offer to become governor of the Bank of Israel. He self-published short essays and speeches on a website. He became a sharp critic of President Joe Biden’s economic policies, describing them as irresponsible. By then, he had become something of a social butterfly in the process, serving on boards, dabbling in venture capital investing. After Donald Trump’s election as president, he seemed lost. His speeches remained well attended all the while.

Summers has been in the news recently, thanks to his relatively close friendship with Epstein, well after the financier’s conviction as a predatory sex offender. The scandal led to examination of his other involvements, and led to his decision to stop teaching students. A great deal of schadenfreude poured forth.

Has the superstar become a supernova? That would be the last stage of a once enormous star, producing a brilliant explosion, before deteriorating into a nebulous cloud of gas. Maybe. Maybe not. Superstars are too valuable to waste out of vengeance. Experience in high-stakes policy making counts for much. Summers has always been a centrist Democrat. Immense financial problems for America lie just ahead: Social Security repair, health care restructuring, thorough-going budgetary reform.

What might Summers do to redeem himself? Cut the cords. Close the blog. Find a new institution. Leave Harvard. Consult to the Democratic Party behind the scenes, always minding the gap between centrists and progressives, but otherwise keep his mouth shut for a year or two. In that case, don’t be so sure you have seen the last of Larry. He survived that first bout of cancer, after all.