Evidence of an American Plutocracy: the Larry Summers Story #p2

"So here is the evidence for an American plutocracy of a narrow and discrete but hardly harmless sort. Wall Street seduced the economics profession not through overt corruption, but by aligning the incentives of economists with its own. It was very easy for academic economists to move from universities to central banks to hedge funds — a tightly knit world in which everyone shared the same views about the self-regulating and beneficial effects of open capital markets. The alliance was enormously profitable for everyone: The academics got big consulting fees, and Wall Street got legitimacy. And it has kept the system going despite the enormous policy failures it has generated, not to exclude the recent crisis."
—Francis Fukuyama, The American Interest, January 2011

Larry Summers' path to the Obama administration, and his record within it, are symptomatic of a new American plutocracy, and his new job at Harvard will keep the gears of corruption greased.

Summers rose to power under the protective wing of Wall Street and Democratic Party mogul Robert Rubin. He aggressively advanced Rubin's program of financial deregulation and faithfully rescued his cronies when deregulation went wrong. Despite the economic catastrophes these policies have contributed to, Summers and other Rubinites have continued their political ascendancy in recent years, filling top positions in the Obama administration.

Obama's economic program, developed almost entirely by Rubin's proteges, has received widespread popular condemnation for bailing out Wall Street while leaving Main Street out in the cold. Summers has become a defining symbol of the latest sold-out administration within a sold-out system of government. His departure from the White House is more a reflection of this public anger than a personal career choice.

But strategic sensitivity is not change. Summers' exit does not significantly diminish Rubin's shadow over the White House, nor does it mark an end or pause in the vicious cycle of today's crony capitalism. Obama has replaced Summers with a less notorious Rubinite, and the Harvard research center Summers will now direct provides a name-brand intellectual cover for, not an alternative to, the dangerously insular politics his career has thus far embodied.

rest at http://www.truth-out.org/evidence-american-plutocracy-larry-summers-story66869