FT: Epstein-connected Larry Summers’ extraordinary fall from grace

Key topics:Summers praised by Sandberg but embroiled in Epstein email scandalResigned from Harvard, OpenAI, and think-tank roles amid backlashCareer marked by brilliance, controversy, and debated economic legacy.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Guy Chazan in New York.Sheryl Sandberg’s encomium to her mentor, Lawrence Summers, could hardly have been more effusive. The economist had always stuck by people, she said, even those facing public scrutiny and even when others would shrink from an association.“He never worried that he would somehow get dragged into someone else’s mess,” the former Meta chief operating officer, who worked as Summers’ chief of staff at the US Treasury, told an event late last year to mark his 70th birthday. “I know all of us here showed up for this day, because Larry has shown up for us.”After the events of the past few days, Sandberg’s words have a piquancy she could not have foreseen. Summers has found himself in perhaps the biggest mess of his life — much of it of his own making.Summers’ reputation has been in tatters ever since a trove of emails released by Congress last week showed him asking the late sex offender Jeffrey Epstein for advice on pursuing an extramarital relationship with a female mentee.This week he announced he would step away from his public commitments, resigning from the board of OpenAI and from roles at think-tanks such as the Budget Lab at Yale and the Brookings Institution. On Wednesday he said he had taken leave from teaching at Harvard University, where he has been a tenured professor since 1983..Read more:.US launches Epstein probe of Bill Clinton, Larry Summers, Reid Hoffman on now public emails.Summers, who used to write for the Financial Times, declined a request for an interview. But he issued a public statement on Monday saying he was “deeply ashamed” of his actions, and took “full responsibility for my misguided decision to continue communicating with Mr Epstein”.Friends and colleagues have been shocked that he appeared to have such a cosy relationship with the convicted sex offender until as late as March 2019 — just months before Epstein’s arrest and death. “Getting involved with Epstein and asking for advice from him is insane,” said one person who has known him for years. “Like a lot of brilliant but flawed people he just falls into traps.”Others said it was typical of his hubris. “Nobody writes things like that in an email unless they think they’re untouchable,” said one economist who knows him. “Which he has been — for a long time.”It has been an extraordinary fall from grace for a man admired as one of America’s leading public intellectuals and economic elder statesmen, equally at home in the worlds of politics, academia and high finance, whose opinions on the crisis du jour were heeded around the globe.“Over the last several decades, he has been one of the most influential public voices on consequential matters of US and international economic policy,” Timothy Geithner, Treasury secretary under President Barack Obama, told the FT.“He has shown moral courage in his consistent willingness to say tough things on many of the hard questions of our time. Often inconvenient for those in the administrations of both parties, and more valuable for that willingness to cause discomfort.”But critics have long bemoaned his outsized influence and what they see as a reluctance to brook dissent. “It’s not just that he’s abrasive — it’s that he steamrollers people who disagree with him,” said one economist. “He’s a bully who is very good at just shutting down debate.”Some claim the correspondence with Epstein has exposed a deep current of sexism. Jonathan A Parker, an economist at the Massachusetts Institute of Technology, called Summers’ “creepy abuse of his professional power” “infuriating”.“This behavior shrinks women’s networks and harms their careers,” he wrote on X. “And maybe fewer women walk through my door for advice or to chat about life as well as economics. Such a record of stupidity from this man.” Certainly, this is not the first time Summers has been embroiled in scandal. There was the speech he gave in 2005 while president of Harvard blaming the underrepresentation of women in tenured positions in science and engineering on “different availability of aptitude at the high end”. The suggestion that there were innate differences in men and women’s cognitive abilities triggered a massive backlash.Summers apologised. But he was already on thin ice after a high-profile feud with Cornel West, a professor of Afro-American studies. Harvard’s faculty of arts and sciences voted no confidence in him in 2005 and the following year he announced his resignation as the university’s president.His detractors say Summers’ blunt manner was never a good fit for Harvard. “He lacks empathy, and can’t read the room,” said the person who has known him for years. “At Harvard he was just a bull in a china shop.”There have been other controversies, too. In the 1990s he got into trouble after it emerged that a memo written by a subordinate and signed by him while he was chief economist at the World Bank said the best place to dump toxic waste was in poor countries, where lifespans were already short.Summers, who said he had not read the memo, later told a Senate committee that it was satirical and “never intended . . . as a serious policy recommendation”. The scandal scuppered his hopes of being named to run President Clinton’s Council of Economic Advisers.“I liked Larry personally but came to believe his judgment was terrible,” Robert Reich, labour secretary under Clinton, wrote in his recently published memoir Coming up Short.Still, few would question his brilliance as an economist. The nephew of two Nobel laureates in economics, he became a tenured professor at Harvard while still in his twenties and later won the prestigious John Bates Clark medal given to American economists under 40.After his stint at the World Bank he joined the government, working as Treasury secretary Robert Rubin’s deputy. The two were credited for the administration’s response to financial crises in Mexico, Asia and Russia and for presiding over the 1990s boom in the US economy.In 1999 Time ran a cover story describing the two men, together with Alan Greenspan, the then Fed chair, as the “Committee to Save the World”. It was around this time that former US secretary of state Henry Kissinger reportedly said Summers should be given a permanent office in the West Wing so the president could ask him anything. Colleagues were impressed by his rigour, his argumentativeness and willingness to challenge orthodoxies. Geithner said he first met Summers while working as a civil servant in the Treasury Department during the 1990s when he would “make me explain the established policy on any given issue”.“Inevitably, he’d respond with something like, ‘whatever you mandarins of the Treasury think, this policy is not at the frontier of knowledge . . We need to bring the policy closer to that frontier’,” Geithner said.But Summers’ legacy remains contested. Critics cite his support for financial deregulation, including the repeal of the Glass-Steagall Act, which had separated commercial and investment banking.“He opened the door for the disaster we had in the financial crisis,” said Dean Baker, a macroeconomist and co-founder of the Centre for Economic and Policy Research.While at the Treasury Department in the 1990s he also opposed efforts by Brooksley Born, chair of the Commodity Futures Trading Commission, to increase oversight of over-the-counter financial derivatives. Summers told Congress that such a move would “cast a shadow of regulatory uncertainty over an otherwise thriving market”..Read more:.More Epstein fallout as Harvard launches investigation into big donations from sex fiend.After his stint at Harvard he re-entered government, serving as director of the National Economic Council under Obama. He played a key role in the policies that stabilised the economy after the 2008 financial crisis, including the $787bn stimulus package, bank rescue and restructuring of automakers.But his hopes of scaling another summit of policymaking were dashed. In 2013, Summers had aspired to become chair of the Federal Reserve. But liberal Democrats opposed his nomination, citing his record on financial regulation in the 1990s, his ties to Wall Street and his confrontational leadership style.Summers had left the White House in 2010 but continued to intervene in policy debates. In 2013 he argued the US and other advanced economies were facing “secular stagnation” — a prolonged period of insufficient demand. Many economists subsequently agreed with him.It is unclear whether he can sustain this role in the wake of the Epstein emails. For some, his retreat from public life is a big loss. “He’s a polymath,” said one author whom he mentored at Harvard. “He helped me a lot, and there’s a lot of other people who would say the same.”Others think it might be too early to write him off altogether. “He’s like a cat with nine lives,” said the critical economist. “He’ll be back.”.© 2025 The Financial Times Ltd.

FT: Epstein-connected Larry Summers’ extraordinary fall from grace

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