Larry Summers Already Took a Pay Cut
The recent headlines about Lawrence Summers had it all wrong. They announced with an implied breathlessness that he earned around $8 million last year -- much of it from the hedge fund D.E. Shaw. Here's what I would have written: "Man Takes More Than $7.9 Million Cut in Pay." Somewhere in the Diagnostic and Statistical Manual of Mental Disorders, the bible of shrinks, there should be an entry for "public servant." They are all, bless their hearts, a little nuts.
Mine, of course, is not an approach that Screaming Cable TV takes to such people. They are all crooks, up to here -- wherever "here" may be -- in conflicts of interest and perks, and too dim to succeed in the vaunted private sector. But the truth is otherwise. There are, it turns out, successful people who would give up big bucks and much of their privacy to work for you and me. It's virtually un-American.
Summers is clearly one of these people. D.E. Shaw paid him $5.2 million last year to meet with important clients. In addition, he lent the firm his expertise as a crack economist, and it, in turn, provided him with an idea of how a wildly successful hedge fund works. At the same time, Summers made around $2.7 million in speaking fees from other organizations and companies. He was, to use a technical (micro) economic term, on easy street.
Yet he chucked it all for an office on the street of broken dreams, Pennsylvania Avenue. So did national security adviser James L. Jones, who was earning about $2 million a year. David Axelrod, who had been running public affairs firms before going into the White House, kissed away at least the $1.5 million he earned last year and sold his stake in his companies. Other members of the Obama team similarly unburdened themselves of excess wealth, spare time and privacy, proving that money is not everything.
This is the dirty little secret of Washington. I don't mean to characterize these or other administration aides as the functional equivalent of Trappist monks, since they enjoy the attention, the power and -- above all -- the action. They are doing something substantive, important -- sometimes making life-or-death decisions and gaining, if they are lucky, a mention in a history book. It is not a life without any compensation.
There are few among us who would take a multimillion-dollar pay cut. Yes, you could say, someone like Summers could make it back, but that's not really -- or always -- the case. Take Tom Daschle. Here was a man who was not trying to build a career. He is 61, and his career is largely behind him. Yet he was willing to give up a lucrative lobbying practice to go back into government as secretary of health and human services. It turns out he cared more about reforming health care than he did about building a fortune. He didn't make it into the Cabinet, foiled by a humiliating spot of trouble about taxes that he could have avoided just by staying where he was and raking in the money.
In Ronald Reagan's famous formulation, "government is not the solution to our problems; government is the problem." This statement, at the very heart of the so-called Reagan Revolution, denigrated government and the people in it. Reagan's statement withdrew John F. Kennedy's invitation to the intellectually gifted to come to Washington and see what they could do for their country. Reagan sent a different message. Government service is for the lame, the cautious. If you really want to do something for your country, shun Washington and make money. It was morning again in America -- whatever that meant.
It is to Barack Obama's immense credit that he has reversed Reagan's reversal. Washington crackles with people on a mission. Brains are once again in vogue, if only because Obama has them in abundance. Not for him the aw-shucks affectation of the previous eight years, when instinct was extolled and ideology trumped analysis. We are in a mess, and one of the reasons is that people who might have noticed or done something about it had been told to stay out of government.
In our scandal-soaked culture, it is de rigueur to denigrate public officials and to search for the inevitable conflict of interest. But here are people, such as Summers, who have put aside wealth and lavish perks for government service. They have their reasons, sure, but whatever they are, we -- not they -- are the richer for it.