The crisis bailout’s chief decision-maker was personally enriched by the rescued banks.

Evidence

The most famous instance was that of Larry Summers, erstwhile president of Harvard University, and head of the National Economic Council during the first two years of the Obama presidency. Indeed, it was precisely that high-profile government position that forced him to disclose his numerous ties to and payments from the financial sector. When he filed his “Executive Branch Financial Disclosure Report” on January 20, 2009, listing a net worth of 17–39 million, he prompted a flurry of newspaper and blog accounts of his outsized speaker fees and favors done for the financial sector from the late 1990s onward. Summers has enjoyed an extremely checkered career in many respects, dating from his controversial tenure as chief economist at the World Bank in 1990, but had nonetheless risen to political prominence due to the long-term patronage of Robert Rubin, formerly co-chair of Goldman Sachs, secretary of the Treasury, and later gray eminence at Citigroup and other Wall Street institutions. During the Clinton administration, Rubin and Summers played a now-infamous role in quashing Brooksley Born at the CFTC in 1998 when she proposed reining in the proliferating markets in credit default swaps. Indeed, many of the most significant neoliberal bank deregulations that led up to the crisis happened during the joint watch of Rubin, Summers, and Greenspan. When Rubin left the Treasury in 1999 for Citigroup, he persuaded Clinton to name Summers as his replacement. Rubin lobbied for Summers to be appointed president of Harvard, a term that ended rather inauspiciously in 2006 with accusations of economics faculty fraud from the federal government. Summers did not suffer from these contretemps, however; he was taken on board at Taconic Capital Advisors, a Goldman alumni hedge fund, and began earning 5 million a year working one day a week at the hedge fund D. E. Shaw, and earning really substantial speaking fees from all the main players in the crisis: 135,000 from Goldman Sachs, 67,000 from JP Morgan, 67,500 from Lehman Brothers, and $45,000 from Merrill Lynch eight days after Obama’s election. … Much of his wealth appears to have been racked up during this run-up to the crisis. Obama then appointed Summers his top economics advisor, as someone who would serve Solomon-like in helping decide who would be rescued, and who cast into oblivion. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 557

Categorization

• XREF: Connects to the broader ‘revolving door’ literature on financial sector capture of regulators, and to the reader’s thought-collective theme of who staffed the crisis response.
• SEED: Angle: the personal balance-sheet of the bailout’s deciders as the cleanest metric of regulatory capture.