Harvard Suspends Construction of Larry Summers’ $1 Billion Science Center « naked capitalism

Friday, December 11, 2009

Harvard Suspends Construction of Larry Summers’ $1 Billion Science Center

Why hasn’t a group of disgruntled Harvard alumni circulated a statement itemizing the damage that Larry Summers wrought as president of the University? Yeah, I know, it would be divisive, grown-ups are discouraged from raising uncomfortable questions, or worse, demanding accountability of leaders.

But Summers did a great deal of damage to Harvard, and has a less than operational moral compass.. He clearly aspires to have another big job in DC, like the Fed chair, so it is important to shine a harsh light on his abject performance (and that’s before we get to the biggest issue, that he is a long-standing protege of Bob Rubin, who still seems to wield considerable influence).

From the New York Times:

Harvard announced Thursday that it would indefinitely suspend construction on a high-tech science complex in the Allston neighborhood of Boston because of money problems….

As part of a larger long-term expansion into Allston — a pet project of Lawrence H. Summers, Dr. Faust’s predecessor at Harvard and now President Obama’s chief economic adviser — the university also bought a string of buildings there over the last 20 years. But many have remained vacant, to the chagrin of Allston residents who have accused the university of buying land and holding onto it, a practice known as land banking.

The four-building science center, estimated to cost at least $1 billion, was originally scheduled to be finished in 2011. Dr. Faust’s announcement comes 10 months after she announced plans to slow the pace of the project while the university assessed whether it could continue. Harvard has since disclosed that its endowment declined 27 percent from June 2008 to June 2009, to $26 billion, and the university has made several cost-cutting moves.

24 Comments:

nowhereman says:

December 11, 2009 at 1:16 am

Summers time and the livin’ is easy. (not so much anymore)

Trainwreck says:

December 11, 2009 at 2:02 am

I think this is probably because Larry Summers was discredited with claiming that black holes are the ideal place to hide loses. It was recently reported that black holes actually spew out the derivative instruments that our Financial Space Administration has been trying to stuff into them.

Doc Holiday says:

December 11, 2009 at 3:37 am

Re: “Harvard has since disclosed that its endowment declined 27 percent from June 2008 to June 2009, to $26 billion, and the university has made several cost-cutting moves.”

> I don’t get this at all, isn’t the Dow up like about 200% this year? What gives — what takes?

elephant swims says:

December 11, 2009 at 5:12 am

Larry is actually a human manifestation of your favorite atomic particle aka hadrons and by the weak interaction can be viewed as a process of decay of their constituent quarks. ie: t -> b -> c -> s -> u d or the general pattern is that the quarks will decay to the most massive quark possible, leading the the pattern.

Massive Larry…ROFLMFAO…hear that Larry[!] your middle name is decay boyo! Go smell some fresh cut left field grass see: http://epa.gov/esd/cmb/pdf/voclr.pdf

LOL cutting grass + VOC + exhaust fumes = slow death bawhahahahah, but she sure looks grand…go golf, base ball!
- craazyman says:
  
  December 11, 2009 at 7:00 am
  
  Did you ever notice that if you put a shoulder-length wig on Larry Summers he’d look like John Law?
  
  No kidding. Google it up.
  
  And Jim Croce has more than a likeness to Michaelangelo, with those heavy upper eyelids and not-so-pretty but still magnificiently intelligent visage.
  
  Some things just ARE. And their reality is higher than we can know, closed in by our earthly clay, which doth mute the music of the spheres.
  
  Ho Ho says Santa Claus coming down the chimney.
  - elephant swims says:
    
    December 11, 2009 at 7:51 am
    
    Your pron is kinky, lets party!

DoctoRx says:

December 11, 2009 at 5:57 am

Dr. Faust?

Hmmm . . .

Let’s expand that and think of Barack Obama as Dr. Faustus selling his soul to Big Pharma et al in order to “do” healthcare in any manner.

run75441 says:

December 11, 2009 at 7:04 am

Hmmm . . .

Havard could name the proposed building the “Iris Mack & Labor Center.”

DownSouth says:

December 11, 2009 at 8:28 am

Matt Taibbi, in his new piece in Rolling Stone, “Obama’s big sellout,” certainly doesn’t have many nice things to say about Summers or the other members of the Rubin administration:

Barack Obama, a once-in-a-generation political talent whose graceful conquest of America’s racial dragons en route to the White House inspired the entire world, has for some reason allowed his presidency to be hijacked by sniveling, low-rent shitheads.

http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout/print

Rickstersherpa says:

December 11, 2009 at 9:49 am

Just one little correction, Larry Summers was President of Harvard, not Dean, for five “interesting” years. For supposedly being the “brightest man alive” and always subjecting ideas brought to him to rigourous questioning, he seems to have accepted without to much questions the group think of the last 30 years. In Harvard, it appears that he did not question the the American university presidents that the way they can tell they are doing a good job it to build lots of fancy new buildings and expand the university’s bureaucracy as to justify those tuition increasaes every year at twice the inflation level. Stiglitz worked with him at the World Bank and Dean Baker at treasury, and both came away with the opinion that there was no there there, that he was essentially Bob Rubin’s doppelganger.

By the way, anyone following the Democratic party the last 8 years realized that Rubin in particular, and Wall Street bankers in general, in part because of the belief thy really were the miracle workers of 1990s prosperity and in part because they were the biggest source of fund raising for Democrats in the 2006 and 2008 elections. As Kos has pointed out, there was little policy differences between Clinton and Obama, and both were committed to listening a lot to Bob Rubin who himself did not become radioactive until late 2008. I would disagree with Tabbai because I don’t think Obama “sold out” as that would mean he changed positions and policy from what he has always believed. After all, he teaches at the heart of Fresh-Water economics, University of Chicago, and shares as his colleagues on the adjunct Law School faculty the two founders of libertarian law and economics theory, Judge Richard Posner and Judge Frank Easterbrook. This association is far stronger than the one he has with Bill Ayers.

Sometimes choices are between bad and worse, and considering the Republican Party is should change its name to the We Are Just Freaking Bat Crazy Party, this is what we have.

KrisKringle says:

December 11, 2009 at 9:49 am

This is old news. I had a buddy working on the building. Most of the talent who were earmarked to use this building are working in Europe & Canada, as the US has no stem cell research policy.

The American Spectator : AmSpecBlog : The Persecuted Larry Summers says:

December 11, 2009 at 12:01 pm

[...] the latest charges against him, leveled by Yves Smith, seem a little [...]

randyB says:

December 11, 2009 at 4:17 pm

Larry is your typical QUANT..Academically smart but no feelings or empathy ..The two don’t coexist usually in humans . These folks are dangerous in high levels because they make decisions based on formulas that don’t account for human behaviour..

GOD please don’t put these people in charge of anything..They are wonderfull in support positions..

David says:

December 11, 2009 at 6:31 pm

I don’t see the problem. Summers bought some buildings when it looked like real estate would go up, and the Harvard Endowment was making a killing. It’s called diversification. Yale did it too, buying a big former R&D campus in Connecticut in about 2007, at what looked like a fantastic price at the time. Yale also renovated a lot of buildings and had plans to build two new undergrad housing complexes. Is Richard Levin horrible too? No. Both endowments made a ton of money, both bought real estate with some of it, both are exposed to the current downturn.

Just like everyone else.

Full disclosure: I am a quant. But please answer my comments not my identity. ;-) What does this have to do with feelings or empathy anyway? Are you complaining about his investments or his empathy?

alex says:

December 11, 2009 at 8:54 pm

“Just like everyone else.”

That’s the problem. Should the president have an economic adviser who bought into the bubble “just like everyone else”, or one who saw it for what it was?

“Are you complaining about his investments or his empathy?”

I’d complain about both. His investments indicate that he’s part of what Paul Krugman would call “Serious Person Syndrome” – someone who’s considered serious and wise because he was wrong at the same time and in the same way as most other people. Heaven forbid that we should have someone who bucked the herd and was prematurely right.

I’d also complain about his empathy because economic adviser to the president is not just a technocratic number-crunching theory-spouting position. Economics matters because it affects real people in real ways. Anyone who lacks the empathy to understand that doesn’t belong in the job.

Then there his long history of being wrong on major policy issues, like advocating “shock therapy” for Russia and vehemently opposing derivatives regulation.

The amazing thing about Summers is that other than being a “Serious Person” it’s hard to think of anything that qualifies him for the job. Like having been right about something.
- David says:
  
  December 11, 2009 at 9:46 pm
  
  I’ll give you the shock therapy for Russia. He and Andrei Shleifer really did a number there.
  
  As for derivative regulation, refresh my memory. Was he instrumental in the growing market for CDS? Arguably one could say that this is gambling with something that should be insurance, and of course “synthetic” CDS were even worse.
  
  Other kinds of OTC derivatives were basically going to grow anyway, there was no critical mass to crack down on them.
  - alex says:
    
    December 11, 2009 at 10:10 pm
    
    “Was he instrumental in the growing market for CDS?”
    
    Yes, in that he vehemently opposed any regulation of them. The classic news story is here:
    
    http://www.pbs.org/wgbh/pages/frontline/warning/view/
    
    Brief version is that as head of the CFTC in the 1990’s Brooksley Born was concerned about the lack of derivatives regulation, but was vehemently opposed by Summers, Rubin and Greenspan.

PatR says:

December 11, 2009 at 8:16 pm

I too am a quantitative person. I disagree with the current economic policies of Larry Summers, and I strenuously disagreed with the bubble fever of the 2000’s, and put my own money on that.

The problem with Larry Summers is not his personality. There were many non-quant types cheering for the bubble as well as quants. The problem is the policy of boosting asset prices into bubbles. That’s what needs to change.

David says:

December 11, 2009 at 9:40 pm

Summers should get some credit for investing and making great returns in the earlier years. If we’re going to blame him for being there in the crash, we should be consistent.

As for the inflationary policies now, would you prefer massive deflation making it impossible for people to pay their debts? There are two choices: outright cancellation of debts, and inflation to reduce their relative size or at least it from growing through deflation. Otherwise if you keep the debt contracts and allow deflation, you throw massive numbers of Americans out of their homes, and well for one thing, some of them have guns.

Summers wasn’t making the bubbles during the Greenspan years. I don’t know what he would have done in government then, but he wasn’t there.

I’m not a big Summers fan necessarily. I just don’t want some unknown quantity to come in because of a right guess about the market two or three years ago, and then turn out to have no backbone and end up taking orders from bankers. We have done that recently already …
- alex says:
  
  December 11, 2009 at 10:14 pm
  
  “Summers wasn’t making the bubbles during the Greenspan years.”
  
  No, he wasn’t making them, but he certainly opposed anything that might reign them in.
  
  “I just don’t want some unknown quantity to come in … and then turn out to have no backbone and end up taking orders from bankers.”
  
  And Summers doesn’t? Sure there’s always a risk in changing horses, but we know the current one is lame.

DoctorOfLove says:

December 11, 2009 at 10:49 pm

Credit bubbling is credit bubbling.

Banks must have x% capital.

But they can trade cds, derivatives of any sort, securitize their assets with implicit backstops, etc.et.

means

We have no idea what capital they have, and they don’t either, and we explicitly don’t care.

History has shown that fractional reserve banks can live on 10% but not less. None of the major banks have anything approaching 10%.

Larry is a cheerleader for this crap.

David says:

December 11, 2009 at 10:51 pm

Well OK I agree Summers is not a good choice. I’m convinced.

But it’s not because he is a quant, and not because his investment returns at Harvard amplified market moves up and down.

It’s because his policy prescriptions for Russia and the USA have been correct.

alex says:

December 11, 2009 at 10:52 pm

Agreed.

David says:

December 11, 2009 at 10:52 pm

I meant incorrect of course. Sorry for the typo.

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