Lawrence Summers

Lawrence Summers
Lawrence Summers
Born	Lawrence Henry Summers; November 30, 1954 (age 71); New Haven, Connecticut, U.S.
Occupation(s)	Economist, academic, public official
Years active	1982–present
Known for	United States Secretary of the Treasury (1999–2001), President of Harvard University (2001–2006), Director of the National Economic Council (2009–2010)

Lawrence Henry Summers (born November 30, 1954) is a prominent American economist known for his tenure as United States Secretary of the Treasury from 1999 to 2001 and later as director of the National Economic Council between 2009 and 2010. He served as Harvard University's president from 2001 until 2006, and currently holds the position of Charles W. Eliot University Professor as well as directing the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School. In November 2023, Summers was appointed to the board of directors for the artificial general intelligence firm OpenAI.

Summers began his academic career at Harvard as a professor of economics in 1983. He departed in 1991 to assume the role of Chief Economist of the World Bank, a position he held until 1993. Under President Bill Clinton, he was named Under Secretary for International Affairs at the United States Department of the Treasury in 1993, advanced to Deputy Secretary in 1995, and then succeeded Robert Rubin as Secretary in 1999. During his Treasury service, Summers was instrumental in managing U.S. policy responses to major financial crises including those in Mexico (1994), Asia (1997), and Russia (1998). He also played a key role in promoting privatization initiatives across post-Soviet nations and advocated for deregulating the U.S. financial sector, notably supporting repeal of the Glass-Steagall Act.

Following President Clinton’s administration, Summers assumed Harvard’s presidency as its 27th leader from 2001 to 2006. His resignation followed a faculty vote expressing no confidence amid disputes with faculty members, issues concerning financial conflicts of interest related to Andrei Shleifer, and controversy sparked by a 2005 lecture on women’s underrepresentation in science and engineering fields.

After departing Harvard, Summers became managing partner at hedge fund D. E. Shaw & Co.. He later re-entered public service during the Obama administration, serving as Director of the National Economic Council from 2009 to 2010, where he was a principal economic advisor throughout the Great Recession.

Early life and education

Born on November 30, 1954, in New Haven, Connecticut, Summers grew up in a Jewish family deeply rooted in economics. His parents, economists Robert Summers and Anita Summers, who is of Romanian-Jewish heritage, were both faculty members at the University of Pennsylvania. Summers is also related to Nobel Prize-winning economists Paul Samuelson and Kenneth Arrow, his uncles. Raised in Penn Valley, Pennsylvania, a Philadelphia suburb, he attended Harriton High School.

At age sixteen, Summers enrolled at the Massachusetts Institute of Technology (MIT), initially pursuing physics before switching his focus to economics, completing his degree in 1975. He was an active participant on MIT’s debate team and qualified for the National Debate Tournament three times. Summers earned his doctorate from Harvard University in 1982 and became one of its youngest tenured professors by 1983. In 1987, he held a visiting scholar position at the London School of Economics.

Academic economist

Summers has contributed extensively to several fields within economics including public finance, labor economics, financial economics, and macroeconomics. His research also covers international economics, economic demography, economic history, and development economics. In recognition of his work, he received the distinguished John Bates Clark Medal in 1993 and was the inaugural social scientist honored with the Alan T. Waterman Award from the National Science Foundation in 1987. He is an elected member of the United States National Academy of Sciences. At Harvard today, as Charles W. Eliot University Professor, he offers courses such as American Economic Policy and The Political Economy of Globalization.

Public Service

Summers was a member of the Council of Economic Advisers during President Reagan's administration from 1982 to 1983 and later served as an economic consultant for the Dukakis presidential campaign in 1988.

World Bank Chief Economist

Following his departure from Harvard in 1991, Summers took on the role of Vice President for Development Economics and Chief Economist at the World Bank, a position he held until 1993. In this capacity, he contributed to crafting development strategies aimed at supporting emerging economies, participated in the bank’s loan approval committee, and managed research initiatives, statistical analysis, and external training programs. Among his notable research was a significant report highlighting the substantial benefits of investing in girls’ education within developing countries.

The Economist referred to Summers as a "noted contrarian," frequently positioned at the heart of contentious economic policy discussions.

Controversy over "Dirty industries"

In December 1991, Summers was a co-signatory of a leaked memo from the World Bank, written by Lant Pritchett and intended as satire. The document asserted that "the economic rationale for dumping toxic waste in the lowest wage country is sound," controversially adding that certain African nations were "severely underpolluted." Both Pritchett and Summers have clarified that the memo was meant humorously and that its public dissemination stripped away crucial irony and context.

Roles in the Clinton Administration

Summers was appointed Undersecretary for International Affairs in 1993 and subsequently served within the United States Department of the Treasury during President Clinton’s tenure. He advanced to Deputy Secretary of the Treasury in 1995 under his mentor Robert Rubin, eventually succeeding Rubin as Secretary of the Treasury in 1999.

His efforts were heavily concentrated on international financial matters, notably playing a pivotal role in orchestrating bailouts for Mexico and Russia amid their currency crises. He spearheaded a project through the Harvard Institute for International Development that provided advisory support to Russia’s government from 1992 to 1997; however, this initiative became controversial when some advisors engaged in investments within Russia, raising questions about conflicts of interest. Summers encouraged Russian President Boris Yeltsin to implement policies focused on "privatization, stabilization, and liberalization," reflecting similar reforms he promoted domestically.

Summers advocated for South Korea to increase interest rates and achieve fiscal balance during its recession—a stance that drew criticism from economists such as Paul Krugman and Joseph Stiglitz. During the Asian financial crisis, Summers and Paul Wolfowitz reportedly supported efforts toward regime change in Indonesia.

Internal documents released in 2009 revealed Summers’ opposition to U.S. leadership on reducing greenhouse gas emissions and rejecting participation in the Kyoto Protocol.

As Treasury Secretary, Summers opposed Republican tax cut proposals in 1999. Amid the 2000 California energy crisis, he worked alongside Alan Greenspan and Enron CEO Kenneth Lay to advise Governor Gray Davis that overregulation was responsible for market instability, urging a loosening of environmental regulations to restore balance.

Summers endorsed the 1999 Gramm–Leach–Bliley Act, which repealed critical restrictions of the 1933 Glass–Steagall Act, enabling banks to combine commercial banking, insurance, and investment services. He lauded this legislation as necessary modernization to maintain competitiveness globally. Critics, including President Barack Obama, later associated this repeal with contributing factors behind the subprime mortgage crisis. As part of Clinton’s Working Group on Financial Markets, Summers collaborated with figures such as SEC Chairman Arthur Levitt, Federal Reserve Chairman Greenspan, and Secretary Rubin to prevent regulation of financial derivatives—an action widely regarded as instrumental in precipitating the 2008 financial meltdown.

Perspectives on financial oversight

On May 7, 1998, the Commodity Futures Trading Commission (CFTC) released a Concept Release soliciting feedback on how to uphold regulatory protections without obstructing the expansion of the OTC (over-the-counter) derivatives market or diminishing U.S. competitiveness internationally. Subsequently, on July 30, 1998, then-Deputy Treasury Secretary Summers testified before Congress, asserting that sophisticated financial entities engaged in these contracts were capable of safeguarding themselves against fraud and insolvency. He emphasized the lack of definitive evidence supporting the need for further regulation of institutional OTC derivatives, challenging advocates to justify such measures. In 1999, Summers endorsed the Gramm–Leach–Bliley Act, which eliminated restrictions separating investment and commercial banking, describing it as a significant advancement for the American financial sector.

Concerning the 2008 financial crisis, Summers acknowledged in a March 15, 2009 interview with ABC that regulatory lapses—such as inadequate oversight of A.I.G.—were "outrageous." By February 2009, reflecting on Wall Street deregulation and his involvement in government bailouts, Summers cited John Maynard Keynes: "When circumstances change, I change my opinion." Nonetheless, on April 18, 2010, former President Clinton publicly disagreed with Summers’s advice against regulating derivatives.

Harvard University presidency

After George W. Bush assumed office in 2001, Summers departed from the Treasury Department to become Harvard's 27th president, holding the position from July 2001 through June 2006. He was Harvard's first Jewish president, although his predecessor Neil Rudenstine had Jewish heritage through his father.

Several of Summers’s actions during his presidency generated public controversy both during and after his term.

Cornel West controversy

In October 2001, Summers criticized Cornel West, chair of African American Studies, for missing classes while working on Bill Bradley’s presidential campaign and accused him of contributing to grade inflation. Additionally, Summers described West’s rap album as an "embarrassment" to Harvard. West strongly contested these allegations and later labeled Summers as "uninformed" and "an unprincipled power player" in his 2004 book Democracy Matters. West eventually returned to Princeton University.

Gender differences debate

At a National Bureau of Economic Research conference in January 2005 focused on diversifying science and engineering fields, Summers addressed why women were underrepresented among tenured faculty at leading institutions. He characterized his remarks as a "positive" and provocative exploration rather than prescriptive commentary.

Summers proposed three explanations for the gender gap: the high-powered job hypothesis; variability in aptitude; and socialization combined with discrimination. The most controversial was the second hypothesis, which referenced studies indicating greater male variability in cognitive abilities results in more men at both extremes of score distributions. He argued that even slight differences in variability might lead to substantial disparities in disciplines such as aeronautical engineering or chemistry.

He concluded that the predominant factor was a conflict between familial responsibilities and employers’ expectations for intensive work commitment, with intrinsic aptitude differences and social factors playing smaller roles. Summers suggested strategies to improve women’s representation in science and engineering fields.

The speech sparked accusations of sexism and flawed scholarship, provoking widespread criticism and controversy at Harvard. Summers issued several apologies afterward. This incident likely influenced his resignation as Harvard president in 2006 and hindered his prospects for becoming Treasury Secretary under President Obama.

Sheryl Sandberg, a mentee of Summers, defended him by emphasizing his support for women’s advancement in math and science and his active engagement with related issues.

In 2016, reflecting on political correctness within academia, Summers warned of a "creeping totalitarianism" restricting permissible ideas on university campuses while reaffirming his dedication to diversity and fighting injustice.

Opposition and Backing of Summers at Harvard

On March 15, 2005, the Harvard Faculty of Arts and Sciences voted on a motion expressing "lack of confidence" in Summers's leadership, which passed by 218 to 185 votes, with 18 abstentions. A less severe censure motion was also approved, garnering 253 votes in favor against 137 opposed, accompanied by the same number of abstentions.

Despite this, the Harvard Corporation, the university’s top governing board responsible for appointing the president, demonstrated strong support for Summers.

Not every member of the FAS faculty opposed Summers; psychologist Steven Pinker publicly defended the validity of Summers’s January lecture, highlighting its academic seriousness and importance to scholarly debate.

Summers enjoyed comparatively greater support from Harvard College students than from faculty members. According to a The Harvard Crimson survey, 57% of students opposed his resignation, whereas only 19% supported it.

In July 2005, board member Conrad K. Harper resigned from the Harvard Corporation, citing dissatisfaction with Summers’s remarks about women and his salary increase. Harper expressed that he could not endorse a pay raise under those circumstances and believed that Harvard’s interests were best served by Summers stepping down.

Backing from Economist Andrei Shleifer

Harvard University and economist Andrei Shleifer, a close ally of Summers, agreed to pay $28.5 million to resolve a U.S. government lawsuit concerning Shleifer’s conflict of interest during Russia’s privatization efforts. The lawsuit, filed under the False Claims Act, accused Shleifer of purchasing Russian stocks while advising on privatization policies. Although a federal judge found Harvard in breach of contract, Shleifer was held personally liable for damages.

By June 2005, Harvard and Shleifer reached a preliminary agreement; by August, Harvard committed to paying $26.5 million while Shleifer was responsible for $2 million in damages.

The university’s assumption of most financial liability combined with Shleifer’s continued faculty status led to accusations of preferential treatment linked to Summers. This controversy further eroded Summers’s reputation among professors, illustrated by Frederick H. Abernathy’s pointed critique of Harvard’s handling during a faculty meeting.

Involvement in Russia

An extensive 18,000-word piece published in Institutional Investor alleged that Shleifer exploited privileged information and influence over Russia’s economy to secure profitable personal investments while leading a Harvard advisory group contracted by the U.S. government to assist Russia. The article suggested that Summers protected Shleifer from disciplinary measures and had previously warned him and his spouse about conflict-of-interest policies in 1996. Summers’s close relationship with Shleifer was acknowledged when he was appointed as Rudenstine’s successor; consequently, Summers recused himself from related proceedings, which were overseen by an independent panel chaired by former Harvard president Derek Bok.

Links to Jeffrey Epstein

A 2003 article in Harvard Crimson revealed a "special connection" between Summers and Jeffrey Epstein. During Summers’s presidency, Epstein pledged at least $25 million to fund Harvard's Program for Evolutionary Dynamics and was granted a private office on campus despite holding no official university position. The association between Summers and Epstein predated both his presidency and tenure as Deputy Secretary of the Treasury. Flight logs presented at the 2021 Ghislaine Maxwell trial indicate that Summers traveled on Epstein’s private jet at least four times while serving in these roles. Furthermore, an Epstein-funded charitable organization made donations to a PBS program hosted by Summers’s wife, Elisa New, who is a professor at Harvard.

Winklevoss twins and Facebook

In February 2004, the Winklevoss twins requested a meeting with Summers to seek his assistance regarding their conflict with Facebook creator Mark Zuckerberg. They alleged that Zuckerberg had appropriated their social networking idea, initially named HarvardConnection, after they had invited him to participate in their initiative. Summers considered the matter outside the university's authority and recommended pursuing legal remedies.

Resignation as Harvard President

Summers declared on February 21, 2006, that he would resign from his role as Harvard President effective June 30, 2006. The university granted him a one-year paid sabbatical, helped finance a $1 million loan for his home, and provided additional compensation. Former President Derek Bok acted as Interim President until Drew Gilpin Faust took office on February 11, 2007.

Post-Harvard presidency career

Following his sabbatical, Summers assumed the position of Harvard's Charles W. Eliot University Professor, with appointments at both the Kennedy School of Government and Harvard Business School. In 2006, he joined the Panel of Eminent Persons tasked with reviewing the United Nations Conference on Trade and Development. He is affiliated with the Group of Thirty and participates in the Berggruen Institute's 21st Century Council. In 2015, he attended a Berggruen-facilitated gathering with Chinese president Xi Jinping.

Business interests

On October 19, 2006, Summers became a part-time managing director at New York-based hedge fund D. E. Shaw & Co., earning $5 million over a span of sixteen months. Simultaneously, he collected $2.7 million in speaking fees from leading financial firms such as Goldman Sachs, JPMorgan Chase, Citigroup, Merrill Lynch, and Lehman Brothers. At the time of his nomination as Treasury Secretary in 1999, Summers disclosed assets near $900,000 alongside liabilities amounting to $500,000. By 2009, his estimated net worth had increased to between $17 million and $39 million. Additionally, he was a member of the Steering Committee of the Bilderberg Group. In 2013, Summers became an early angel investor in India's pioneering car rental startup, Zoomcar, founded by a former Harvard teaching fellow.

National Economic Council

In January 2009, Summers was appointed as director of the National Economic Council under President Barack Obama, positioning him as a central figure in economic policymaking. While receiving commendations from Obama and economic advisor Peter Orszag—who described him as "one of the world's most brilliant economists"—Summers encountered criticism due to strained relations with former Federal Reserve Chairman Paul Volcker and disagreements over policy directions. Henry Kissinger characterized Summers as well-suited for a White House role focused on "shooting down or fixing bad ideas."

During negotiations on the economic stimulus package, Summers advocated for tax reductions rather than infrastructure investments, which drew disapproval from Representative Peter DeFazio and economists including Paul Krugman and Joseph Stiglitz. Proposals from Summers and Obama's team ranged between $550 billion and $900 billion; Christina Romer initially suggested $1.8 trillion but scaled back following objections from Summers.

The Wall Street Journal reported that Summers encouraged Senator Chris Dodd to eliminate executive compensation limits on companies receiving stimulus funding, including Citigroup.

In April 2009, scrutiny intensified over Summers’ earnings from hedge fund D.E. Shaw and Wall Street speaking engagements shortly before influencing bailout decisions while serving as a government official.

Post-NEC career

Following his departure from the NEC in December 2010, Summers provided consultancy services to hedge fund firm D. E. Shaw & Co, Citigroup, and the NASDAQ OMX Group, while continuing his tenure as a Harvard professor. In June 2011, he joined the board of Square, a company specializing in digital payment solutions, and took on the role of special advisor at the venture capital firm Andreessen Horowitz. By December 2012, he had become a board member for Lending Club, a platform focused on peer-to-peer lending. In July 2015, Summers added another board position with Premise Data, a San Francisco-based analytics company that gathers data through a worldwide contributor network.

In April 2016, Summers was one of eight former Treasury secretaries who publicly advocated for the United Kingdom to remain part of the European Union ahead of the June referendum. After the Brexit vote, he described it as "the worst self-inflicted policy wound that a country has done since the Second World War," characterizing it as a "wake up call for elites everywhere" and promoting the idea of "responsible nationalism" as a response to popular sentiment.

In June 2016, Summers cautioned that a Trump presidency posed greater economic risks than Brexit, forecasting a possible extended recession within 18 months if Trump were elected, with significant global economic consequences.

2020 presidential election

Progressive organizations such as the Sunrise Movement and Justice Democrats pressured Joe Biden's 2020 campaign to exclude Summers from his economic advisory team, criticizing his stances on inequality and climate change. Responding to this opposition, Summers declared he would not participate in any Biden administration formed after the 2020 election.

Candidacy for Federal Reserve chairmanship and Bank of Israel governorship

In 2013, Summers emerged as a frontrunner alongside Janet Yellen to succeed Ben Bernanke as chair of the Federal Reserve. However, due to bipartisan resistance, he withdrew his candidacy, expressing concern that a divisive confirmation battle would damage both the Federal Reserve's effectiveness and ongoing economic recovery efforts. That same year, Israeli Prime Minister Benjamin Netanyahu offered Summers the position of governor at the Bank of Israel, which he declined, opting not to lead Israel’s central bank.

Criticism of the Biden Administration, 2021

Summers was an early and vocal critic of President Joe Biden’s economic strategy, condemning the $1.9 trillion American Rescue Plan Act of 2021 as "the least responsible macroeconomic policy we've had in the last 40 years." He warned that such measures could trigger recessionary pressures and destabilize financial markets.

Hamas-led attack on Israel

Following the 2023 Hamas-led attack on Israel in October 2023, several undergraduate groups at Harvard University released a letter condemning the Israeli state, assigning it "full responsibility for all unfolding violence." This statement provoked criticism from notable alumni and Larry Summers himself, who expressed being "sickened" by their message. While agreeing with investor Bill Ackman on acknowledging employees' political beliefs, Summers rebuked Ackman’s proposal to disclose all signatories’ names as reminiscent of "Joe McCarthy"-style tactics.

Summers also criticized Harvard’s administration for inadequate responses to increasing anti-Semitism since the attack. In March 2025, he reproached both the Harvard Corporation and President Alan Garber for failing to produce a conclusive report with actionable recommendations despite having established a task force over a year earlier aimed at combating anti-Semitism.

Personal life

Around 1983, Summers received a diagnosis of Hodgkin's lymphoma, underwent medical treatment, and has since remained free of cancer. He has three children—twin daughters Ruth and Pamela, and a son named Harry—from his first marriage to Victoria Joanne (Perry). In December 2005, he wed English professor Elisa New, who has three daughters from a previous relationship. Summers lives in Brookline, Massachusetts.

In popular culture

In the 2010 motion picture The Social Network, Summers is portrayed by Douglas Urbanski as Harvard's President engaging with the Winklevoss twins concerning their conflict with Mark Zuckerberg.

The documentary Inside Job features Summers as a central figure in the 2008 financial crisis, focusing on his involvement in financial deregulation policies.

In the The Simpsons episode "E My Sports" (Season 30, Episode 17), Principal Seymour Skinner mentions a $100 bill bearing Summers' signature, underscoring his economic significance prior to the Great Recession.

External links