Economic aristocrats and the President

Economic Adviser to the Aristocracy
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Read More: Banks, Barack Obama, Economy, Hedge Funds, Honorariums, Larry Summers, Lawrence Summers, Obama Economic Advisers, Wall Street, Business News

The lately published list of the honorariums received by Lawrence Summers for lectures delivered in 2008--at firms like J.P. Morgan, McKinsey and Company, Goldman Sachs (twice), Citigroup (twice), Lehman Brothers (twice), American Express, Pricewaterhouse Coopers, Skagen Funds (twice)--shows the practical meaning of an aristocratic class. The amounts received by Summers from these banks and brokerage houses and consulting firms covered a range from $59,400 per lecture (Skagen) to $135,000 (McKinsey). Other outfits paid still more.
Summers also received a salary of $5.2 million in 2008 from the hedge fund D.E. Shaw after having brought substantial pressure to institute to a radical policy of deregulation that affords an unparalleled species of financial protection to hedge funds.

The point about such a private counselor who becomes a public servant is not that he is corrupt. He need not be. Rather, he is predictable within the world he knows and believes in, which is the world that honors him. He does not have to be told what to do. When he thinks of the American family, these banks and investment groups, and the too-big-to-fail insurance colossus, are in fact his extended family. They are the people he talks to and jokes with and eats with, the people he thinks of in his spare time. They are the people he knows.

One sees in the recent career of Summers--and not least, in his ascent to the position of economic adviser to President Obama--how subtle, consistent, and pervasive are the means by which an aristocracy perpetuates itself. How it doles out its rewards to maintain its power. How it buys the talents and shapes the careers it needs, so that even a general crisis brings only a second layer of bribed servants, and the medicine is administered by doctors whose judgment is bought and paid for. One sees, too, what drove the rage against such a class in earlier times--the feeling that its power is a monstrous imposition; the fear that no cry or protest will ever penetrate from outside the closed circle.
David BromwichProfessor of Literature at Yale