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Thursday, January 20, 2011

Evidence of an American Plutocracy: The Larry Summers Story

By Matthew Skomarovsky  |  LittleSis | Op-Ed
Truthout
Larry Summers. (Photo: E.T. Studhalter / World Economic Forum)
Monday 10 January 2011

“So here is the evidence for an American plutocracy of a narrow and discrete but hardly harmless sort. Wall Street seduced the economics profession not through overt corruption, but by aligning the incentives of economists with its own. It was very easy for academic economists to move from universities to central banks to hedge funds — a tightly knit world in which everyone shared the same views about the self-regulating and beneficial effects of open capital markets. The alliance was enormously profitable for everyone: The academics got big consulting fees, and Wall Street got legitimacy. And it has kept the system going despite the enormous policy failures it has generated, not to exclude the recent crisis.”

—Francis Fukuyama, The American Interest, January 2011

Larry Summers’ path to the Obama administration, and his record within it, are symptomatic of a new American plutocracy, and his new job at Harvard will keep the gears of corruption greased.

Summers rose to power under the protective wing of Wall Street and Democratic Party mogul Robert Rubin. He aggressively advanced Rubin’s program of financial deregulation and faithfully rescued his cronies when deregulation went wrong. Despite the economic catastrophes these policies have contributed to, Summers and other Rubinites have continued their political ascendancy in recent years, filling top positions in the Obama administration.
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For more information on the powerful documentary Inside Job click here.