Monday, October 5, 2009

Larry Summers

Ryan Lizza has written a lenghty story on Larry Summers, one of the key economic-policy figures of this administration, for vanity Fair. It is available online here. Warning, it is rather long.

You can get the gist of it from the lucky fish.

Lizza confronted Summers with a tidbit from Rubin's memoir (written back in 2002). Summers was Rubin's second-in-command at the Treasury Department under Clinton.

Rubin wrote:

"Larry thought I was overly concerned with the risks of derivatives. His argument was characteristic of many students of markets, who argue that derivatives serve an important purpose in allocating risk by letting each person take as much of whatever kind of risk he wants. Larry’s position held together under normal circumstances but seemed to me not to take into account what might happen under extraordinary circumstances.”

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