On April 3, the White House quietly released financial records for President Obama’s pick for chairman of the National Economic Council, Lawrence H. Summers. It was revealed that he was paid millions of dollars by hedge funds and banks that received bailout funds.
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The documents reveal that Summers, who served as treasury secretary under former President Bill Clinton, received at least $9 million for his employment at the hedge fund D.E. Shaw and from speaking engagements for banks like Merrill Lynch and the now-bankrupt Lehman Brothers.
Lawrence Summers is no stranger to controversy. After his stint as treasury secretary, he acted as president of Harvard University for five years. His stay at Harvard ended in February 2006 after he spouted, on the record, inflammatory and sexist remarks about his belief that women lacked a natural ability to grasp science and math.
Despite such outbursts, Summers continued a lucrative career in the private sector, weighing his options between positions at different banks like Goldman Sachs and Citigroup. It was not until he befriended Julius Gaudio that he decided to become a private consultant for the hedge fund D.E. Shaw, where Gaudio was one of the managing directors.
D.E. Shaw is a $30 billion hedge fund that makes its money by cashing in on shady investment schemes in a completely unregulated feeding trough for the ultra rich. D.E. Shaw helped Summers expand his wealth exponentially. According to the released White House report, Summers collected $5.2 million from D.E. Shaw in only the second of the two years he was there. Moreover, Summers earned this vast sum while working just one day per week.
Summers also cashed in from 40 paid appearances and speeches he made in 2008 for a number of bailed-out Wall Street giants. Goldman Sachs, which has gotten over $10 million in bailout money, paid Summers over $200,000. JP Morgan Chase, recipient of $25 billion in bailouts, paid Summers nearly $70,000. Citigroup, which received a whopping $50 billion, gave Summers $100,000 for speaking engagements. Along with paid gigs from corporations including Lehman Brothers and Merrill Lynch, Summers made nearly $3 million for his appearances last year.
Obama’s appointment of Wall Street lackey Summers makes it crystal clear: The U.S. government, no matter who resides in the White House mansion, is in the practice of protecting the class interests of the country’s ruling elite. The $11.5 trillion in bailout funds given to the big banks has been completely supported by the Obama administration. Under the new administration, the profitability of the banks and the whole of Wall Street will take precedence over the needs of working people, who continue to take the brunt of the failing U.S. economy.
