fb-pixelFive times Larry Summers has been in the midst of economic crisis Skip to main content

Here are five times Larry Summers has been in the midst of an economic crisis

Larry Summers in Harvard Square in 2001.Suzanne Kreiter/Globe Staff/The Boston Globe

If a crisis is afoot, it is safe to assume economist Larry Summers is not far behind.

Global tumult during the Clinton years? Summers played crucial roles in the Treasury Department. Harvard’s effort to rethink itself for the 21st century? He was named president of the university. The 2008 financial crisis? He returned to the White House as President Obama’s top economic adviser.

And on Tuesday, Summers was named to the board of OpenAI, the maker of ChatGPT, which Summers has said “could be the most important general purpose technology since the wheel or fire.”

His entry into the board is the latest development in a chaotic week for the Silicon Valley company, which ousted its chief executive and cofounder, Sam Altman, last Friday before reinstituting him Tuesday night. Altman returns alongside a new board, which includes Summers, Bret Taylor, a former co-CEO of software company Salesforce, and existing board member Adam D’Angelo.

OpenAI announced the “initial board” members in a message posted to X, the social networking service formerly known as Twitter, noting that the company is “collaborating to figure out the details.”


It’s not the first time the famously prickly Summers has entered the crosshairs of a burgeoning tech firm — who could forget his portrayal in “The Social Network,” the cinematic retelling of Facebook’s rise, when he all but told the Winklevoss twins to stick their grievances with Mark Zuckerberg where the sun don’t shine?

Summers also holds board seats at payments company Block and software firm Skillsoft.

His arrival on the scene of the OpenAI quagmire offers a chance to look back at some of Summers’ most charged moments, from public servant to reigning scholar to, most recently, vocal private citizen.

US Vice President Al Gore (right) congratulated Larry Summers (second from left) after being sworn in as the secretary of treasury beside his wife Vicki (second from right) and President Bill Clinton on July 2, 1999.JOYCE NALTCHAYAN/AFP via Getty Images

Treasury secretary

In 1993, after Bill Clinton was elected president, Summers made the move from the World Bank to the US Treasury Department, assisting with the response to international financial crises in Asia and Mexico. In 1999, he rose to the post of secretary, leading the department through the tail end of the Clinton years.


He played a key role in the repeal of the Glass-Steagall Act, which set up a barrier between commercial and investment banks. The legislation that replaced it, the Financial Services Modernization Act of 1999, would “better enable American companies to compete in the new economy,” Summers argued.

Some have contended that the rollback of Glass-Steagall ushered in an era of deregulation that set the stage for the 2008 financial crisisa charge Summers has contested.

Harvard University president Larry Summers shook hands with students after he announced his resignation on Feb. 21, 2006.Kamerman, David/ globe staff

Harvard University

In 2001, Harvard University called on Summers, a onetime professor, to become its 27th president.

Summers brought with him visions for a campus in Allston, a renewed focus on undergraduate education, and ideas for how to use the internet to make Harvard a global force.

But after five years — at the time the briefest tenure since the Civil War — Summers resigned after he drew intense ire for suggesting that “there are issues of intrinsic aptitude” to blame for the lack of female representation in the fields of science and engineering. He later apologized.

Larry Summers, director of the White House's National Economic Council, listened to a question at the US-India Business Council meeting in Washington, D.C., on June 2, 2010. Bloomberg

2008 financial crisis

Just two years after his departure from Harvard, Summers returned to the White House when he was tapped as Obama’s lead economic adviser. He was appointed amid a global meltdown of financial markets, burnishing his reputation as something of a “shadow economic minister,” as the New York Times put it.


Summers helped engineer the response to the 2008 financial crisis, which was fueled by the collapse of the housing bubble and led to mass unemployment and a broad reduction in consumer spending. He helped muscle a $787 billion stimulus bill through a divided Congress.

In a 2019 post to his website, Summers addressed to a question regarding the response to the crisis: Did we do [the] right thing?

“No. Then yes. Then no,” he wrote.

Former Treasury secretary Larry Summers spoke during a financial and economic event at the London School of Economics on March 25, 2013. REUTERS

Federal Reserve chair bid

In 2013, Summers was a leading candidate for chair of the Federal Reserve.

But Obama faced opposition from within his party on Summers’ potential nomination, with some progressive Democrats bristling at his “sometimes brusque demeanor and his role in deregulating markets,” the Globe reported.

With Obama unable to champion his nomination, Summers eventually withdrew from consideration for the top job, which went to Janet Yellen (who now holds Summers’ old job as secretary of the Treasury).

“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the administration, or, ultimately, the interests of the nation’s ongoing economic recovery,” wrote Summers in a letter to Obama.

Even without a formal return to public service, however, Summers remained vocal about economic policy.


In 2021, he sounded the alarm to President Biden on the potential for rampant inflation, warning that the stimulus meant to revive the economy post-COVID could spur rapid inflation.

“The Fed’s idea used to be that it removed the punchbowl before the party got good,” he said. “Now, the Fed’s doctrine is that it will only remove the punchbowl after it sees some people staggering around drunk.”

Larry Summers, president emeritus and professor at Harvard University, during a panel session on day three of the World Economic Forum in Davos, Switzerland, on Jan. 19.Hollie Adams/Bloomberg

Israel–Hamas war

In October, Summers made waves when he said he was “sickened” by Harvard’s response — or lack thereof — when student groups blamed Israel for Hamas’s attack.

Summers, who is Jewish, said he felt “disillusioned and alienated” by Harvard’s lack of response to the claims of the student groups.

“The silence from Harvard’s leadership, so far, coupled with a vocal and widely reported student groups’ statement blaming Israel solely, has allowed Harvard to appear at best neutral toward acts of terror against the Jewish state of Israel,” he said.

Soon after, Harvard president Claudine Gay released a statement condemning the Hamas attacks and noting that although she supported free expression, “no student group — not even 30 student groups — speaks for Harvard University or its leadership.”

Material from Globe wire services was used in this report.

Dana Gerber can be reached at dana.gerber@globe.com. Follow her @danagerber6.