Why Larry Summers Could Be Worse Than Bernanke

Written By Jeff Siegel

Posted August 16, 2013

It’s the classic case of the fox guarding the henhouse.

As the reign of Ben Bernanke comes to an end, leaving behind it a slippery trail littered with the building blocks of crushing inflation, President Obama must choose a successor. Freedom Watch

And don’t think for a minute that the president is looking for anything but another errand boy who will be charged with the responsibility of continuing the Fed’s current level of incompetency and irresponsibility…

That in itself is a tragedy that’ll ultimately reduce the dollar to the last square of glue-covered toilet paper we often discard at the most inopportune times.

But upon closer investigation, you’ll fine that this long-time “untouchable” insider will not only serve as Obama’s spineless yes-man, but, if we are truly condemned to repeat the mistakes of the past, he will be the one to finally sink this battered old ship.

Now, it’s not a lock just yet, but there are plenty of analysts that believe former Treasury Secretary Larry Summers will be the next chairman of the Fed.

If you’re unfamiliar with Summers, let me give you a quick rundown…

A Closet full of Skeletons

Larry Summers is probably best known for his leadership role in the dismantling of Glass-Steagall.

The Glass-Steagall Act, if you don’t know, was initially created in 1933 in an effort to restore public confidence in the banking system during the Great Depression. Essentially, it forced a separation of commercial banking and investment banking activities.

Summers pushed for the end of Glass-Steagall during his time as President Clinton’s Treasury Secretary. But playing a critical role in what would ultimately lead us to a brutal recession didn’t get much coverage back then, despite the numerous warnings that this was a bad idea that would ultimately lead to a death blow for the middle class, while turning giant banks into king-makers and criminal factories…

Today, however, Summers is on the fast track to becoming the next Fed chairman.

And now we’re starting to see plenty of skeletons in his recently pried-open closet…

The Worst Watchdog Ever!

Although the mainstream media bombard us with hyperbolic warnings of foreign Islamic terrorists, I’m a bit more concerned about domestic terrorists… you know, the self-serving politicians and all their Wall Street gods.

Larry Summers is an insider in every sense of the word. He’s made millions delivering speeches to the big banks — including Merrill Lynch, JPMorgan Chase, and Citigroup, which also paid him some very lucrative “consulting fees.” In total, Summers has racked up as much as $39 million in consulting fees alone. Not a bad gig, if you can get it.

In theory, the chairman of the Fed is to serve as a sort of watchdog. But this guy isn’t going to do anything to derail his herd of cash cows.

If Summers is to serve as a watchdog, his bite will have all the fierceness of a toothless toy poodle.

The Summers-Enron Connection

Then there’s the Summers-Enron connection…

Back when California Governor Gray Davis suspected Enron was manipulating the state’s energy market, and when scumbag traders were laughing about all the money they were making while consumers were getting screwed, Larry Summers told Davis that California needed to “suck it up”…

Which is something Harvard had to do after Summers left the Massachusetts university on the hook for some pretty toxic interest rate swaps following his time as president of the institution. According to a Bloomberg report, the swaps were so bad that Harvard agreed to pay banks nearly $1 billion to terminate them.

And most of these “bad bets” were made in 2004, when Summers was running the university.

And President Obama is pushing for this guy?!

Bail You Out like Wall Street

Of course, given Summers’ laundry list of schemes and failures, it is possible that the president won’t be able to muster the support he’ll need from the Senate. Certainly, Republicans aren’t going to do anything to make his life easier… and there’s a growing number of Democrats showing their disinterest in Summers.

So confirmation could be tricky.

Another favorite for the position (though not nearly as much as Summers), is Janet Yellen, the Vice Chair of the Board of Governors of the Fed.

Although Wall Street may not be in her corner, with another election cycle coming up soon, I suspect there will be a few politicians looking to be friends of Larry Summers’. This alone could give Yellen a real shot at the position.

However, Yellen doesn’t come without baggage, either. But I do believe that because she is not as well-connected to Wall Street, there’s probably less of a chance that her phone will be ringing off the hook with a bunch of turkey vultures asking to return favors.

Of course, regardless of what happens, whoever gets the position is likely to keep printing money.

So at the end of the day, I’m not sure it even matters.

What I do know is that this is just another reason you need to take responsibility for your own health, wealth and prosperity.

Because if you think the government will ever bail you out like it did Wall Street, you’re going to be very disappointed — and very poor.

Live honorably, live free…

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Jeff Siegel for Freedom Watch

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