$5.2M Wall St. Ties Haunt President's Economic Czar

Is Summers too close to hedge fund pals?
By Ambreen Ali,  Newser Staff
Posted Apr 6, 2009 1:27 AM CDT
$5.2M Wall St. Ties Haunt President's Economic Czar
Larry Summers played a vital role in helping to make the DE Shaw hedge fund billions of dollars. Now that role is casting a shadow over his effort at reviving the economy.   (AP Photo/Ron Edmonds)

President Obama's chief economic adviser worked as a consultant only one day a week for the DE Shaw & Company hedge fund in New York, which paid him an eye-popping $5.2 million in just two years. Larry Summers was a prized "marquee" consultant who met with clients regularly, and eagerly used his clout to help Shaw make billions, reports the New York Times. But that lucrative relationship is now casting a shadow over Summers' work attempting to revive the economy.

Summers presents his hedge fund stint as merely part-time work, and says the Wall Street insight he gained is helping shape strategy to revive the financial industry. But critics say Summers' ties raise questions about whether the government economic overhaul he's engineering will benefit Wall Street companies at taxpayer expense. “This is what might be called contamination. Did Summers spend so much time with the hedge fund or investors that he started to think like them?" asks a public policy professor.
(More Larry Summers stories.)

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