Harvard Rules by Richard Bradley Page A

2000, when Stiglitz’s term was up, he was due to be reappointed by World Bank president James Wolfensohn. But Wolfensohn informed him that the appointment would come only if he promised to silence his criticism, a condition Stiglitz declined to meet.
    Stiglitz left the Bank to teach at Columbia University and write an influential bestseller called Globalization and Its Discontents. In 2001 he would win the Nobel Prize for his work on “information asymmetries”—the idea that markets are imperfect because their participants have unequal access to information. “Even small degrees of information imperfections can have large economic consequences,” Stiglitz explained. As developed by him, it was the kind of big idea that had eluded Summers.
    But the memory of his ouster still stung, and Stiglitz blamed Larry Summers. Summers couldn’t handle criticism, especially from another economist, Stiglitz thought. He didn’t believe in dissent or the public airing of conflicting opinions. Stiglitz believed with all his heart that Summers, with his power over the World Bank, had forced Wolfensohn either to neuter or to exile Stiglitz, but he’d never be able to prove that. Summers, Stiglitz would tell associates, had been careful “not to leave his fingerprints” on the episode.
    For the most part, however, Summers received positive press during his Washington years. Reporters appreciated him. He had made himself an excellent source of background information for the beat reporters covering Treasury, and he had a gift for explaining complicated situations lucidly and colorfully. When he did speak on the record, he showed a well-honed flair for the sound bite, as when he compared modern capital markets to the invention of the jet. “On the one hand, it’s faster and gets you where you’re going more comfortably and more rapidly,” he said. “On the other hand, crashes are that much more spectacular.” True, Summers tended to repeat his best lines, but they were still more interesting than the usual government monotone.
    Anyway, the U.S. economy was roaring along, largely unaffected by the crises abroad. The IMF remedies may have inflicted painful consequences overseas, but the reporters in Washington paid little heed to what was going on in Malaysia or Moscow, and they wrote glowingly about the Clinton economic team. The most egregious example came in February 1999, when Time put Rubin, Greenspan, and Summers on its cover, calling them the “Three Marketeers” and “the committee to save the world.” In a breathy, you-are-there style, the article’s lead portrayed a moment of crisis at which Rubin happened to be bonefishing and Greenspan playing tennis. Of Summers, Time said, “You really should calm down about this phone-ringing stuff, but you are the Deputy Secretary of the Treasury, and this past year, for all its chaos and tumult, has been about the most exciting you could imagine. It’s the holiday season, and you are eager to get to your family and all that, but boy, this holding the world economy by the hand is even better than advertised.”
    Summers’ presence on the magazine cover raised some eyebrows at the White House, where not everyone thought a deputy cabinet secretary deserved equal billing with Bob Rubin and Alan Greenspan. In the Washington pecking order, deputies were supposed to be anonymous. But the photo did reflect how influential Summers had become and the closeness of his relationships with the other two men. Rubin, Greenspan, and Summers dined together weekly, and their disagreements were as collegial as they were rare.
    Summers’ presence on the cover of Time was also a sign that Bob Rubin was grooming his successor. Though Rubin would not talk about it until seven years later, in 1996 he and Summers had cut a deal. Summers agreed to turn down other job offers and stay at Treasury after Bill Clinton’s