Report: Summers rejects Netanyahu offer to be top Israeli banker

Larry Summers

Larry Summers

I guess rudeness is a resume-builder in Israel. Reuters reporter Dan Williams:

The ‘Times of Israel’ says Summers has rejected the job.

So is this the consolation prize for not getting the US Fed chairmanship? And is there a revolving door for American Jews between the US and Israel? Stanley Fischer, formerly of Citigroup, was the last Israeli bank chair. Summers has long been a defender of Israel; he stopped divestment in its tracks at Harvard ten years ago by saying it was anti-Semitic in effect.

Summers is also a big neoliberal. Why he lost the fed chair, per Bloomberg:

A campaign led by two Democrats, Ohio Senator Sherrod Brown and Oregon Senator Jeff Merkley, who organized advocacy groups and fellow legislators against Summers effectively ended his prospects. Concerned that he would take too soft a stance in regulating Wall Street

NYT:

In August, [Republican Senator Pat] Roberts said, “I wouldn’t want Larry Summers to mow my yard.”

Mr. Summers, who was also the president of Harvard, has attracted resistance for a variety of reasons, among them his comments about the aptitude of women in math and science.

Senators like Mr. Tester also say that Mr. Summers has too often promoted the interests of large financial institutions over those of small community banks.

About Philip Weiss

Philip Weiss is Founder and Co-Editor of Mondoweiss.net.
Posted in Israel/Palestine

{ 23 comments... read them below or add one }

  1. there’s something fishy going on. i thought they finally found someone for this job, the guy from argentina. my hunch is there’s a hush hush on the big news. the bank of israel has some issues and i think it has to do w/regulators of euro banks advising not to make loans or something. i think it’s related to why the last guy stepped down in january. i don’t think anyone wants being at the helm of a sinking ship.

    link to bloomberg.com

    Resignations

    Israel’s TA-25 Index rose 8.6 percent since the MSCI reclassification took effect in May 2010 versus a 67 percent jump for the Nasdaq Composite Index. (CCMP) That year alone, investors pulled $795 million from the Israeli market. The 44 percent tumble in volumes through the end of 2012 compared with an average 18 percent global decline, the Bank of Israel said in a March 12 report.

    Initial public offerings have dried up. In June, Kadimastem Ltd. (KDST), a developer of stem cell therapies, became the first company to list on the Tel Aviv bourse since the end of 2011, compared with a record 56 IPOs in 2007, exchange data show.

    Companies that pulled off the exchange, which had 549 stocks in 2012, included Hot Telecommunication System Ltd., a telecommunications company, and ELAD Canada Inc., a real estate company owned by billionaire Isaac Tshuva. Israel Chemicals Ltd. (ICL), the Tel Aviv-based company that extracts minerals from the Dead Sea to make fertilizers and potash, said yesterday it’s preparing for a dual listing in part to shield itself from worsening conditions on the local bourse.
    ‘Wake-Up Call’

    The drop in volumes prompted a feud between regulators and exchange officials over who was to blame. Former Tel Aviv Stock Exchange Chief Executive Officer Ester Levanon resigned on July 17 and Saul Bronfeld, the chairman since 2006, followed the next week. Bronfeld, a former Bank of Israel chief economist, cited government regulations and slower economic growth for the exodus of investors and companies. Israel Securities Authority Chairman Shmuel Hauser says the bourse’s management is also responsible.

    “The decline in volume and prices on the Tel Aviv bourse is due to excessive regulation and the change in the pace of economic growth, not the operations of the bourse,” Bronfeld said in an interview Aug. 5 in Tel Aviv. “My resignation is a wake-up call for Jerusalem,” where Prime Minister Benjamin Netanyahu’s government is based, he said.

    The resignations are coinciding with a shuffle at the central bank, where two candidates nominated by Netanyahu to replace former Governor Stanley Fischer have withdrawn. Jacob Frenkel, a former central bank chief, and Leonardo Leiderman, the chief economist at Bank Hapoalim Ltd. (POLI), dealt a blow to Netanyahu by giving up their nominations. Fischer’s handpicked deputy, Karnit Flug, is acting as a caretaker in the meantime.

    • speaking of sinking ship. out of curiosity i googled ‘bank of israel and sinking ship’ and look what popped up:

      Stanley Fischer, are you deserting a sinking ship?
      Is the respected economist jumping the good ship Bank of Israel because economic havoc looms…..

      ……there is room to fear that Fischer may be fleeing the battlefield just before the economic failure hits – a failure that could tarnish his image as the one who brought Israel’s economy back to health. If Fischer does, indeed, do just that, he will be leaving a tough legacy for his replacement.

      link to haaretz.com

  2. Krauss says:

    I’ve been following this story on a weekly basis now for months. It’s one giant mess.

    Candidate after candidate has been rejected, often for political reasons. Their first choice had to confess, rather embarrasingly, that he had stolen small things in a duty-free shop at a Hong Kong airport.

    Yair Lapid’s manegement of the finance ministry is not much better where he just fired a civil servant for no other reason than that the servant came up with an indepedent paper with suggestions.

    As for the Summer’s angle. There’s something slightly tragic in his character. His family is made up out of Nobel laureates. He wanted one himself but now looks increasingly unlikely to get one. He wanted to become Fed chief all his life, but then the liberal faction destroyed that chance(Yellen was always the better candidate anyway but Obama’s anti-woman bias and preference for pro-Wall Street candidates once again became apparent until his hand was forced).

    Now, he’s offered the Israeli central bank job. Remember, Fischer wanted to become the head of the IMF. My guess is that Summers want either the IMF or the World Bank job. He feels that by going to Israel he’d take a step down and be seen as a provincial candidate. Maybe he’ll get involved in some Chinese business or something to gin up the votes for a potential vote after Lagarde is gone.

    • Inanna says:

      Since Fischer has held positions at both the World Bank and IMF, he would know that being able to become head of the IMF is not possible. Not only is he too old but a European traditionally holds the IMF seat. I feel Summers would not be welcomed back to the World Bank given his own controversial tenure as Chief Economist and VP. And, as an American, the IMF role would also be barred to him.

    • Ellen says:

      Not only the “liberal faction.” Summers left a trail of financial destruction in his path. Without going into the still dark details of his trashing the Harvard Endowment by bullying his hand to fill it with the toxic waste of Credit Default Swaps, etc. he was also instrumental in assuring that financial kryptonite stayed free of regulation.

      In doing that he had a hand in destroying a few career regulators along with the reespected Brooksly Borne, who was apponted by Clinton as a CFTC Comissioner. Clinton never stood up as she was runover and demonized by Summers. There is still a lot of pain and guilt in Washington by all the mis-placed faith put into Summers. And no one, absolutely no one was going to bat for him for the Fed Chair. And without political freinds, you are nothing in D.C.

      A documentary worth watching on the Summers era.

      link to pbs.org

      Summers is left with Bibi Nutahoo as his supperter and friend now. I wonder what excuse he gave for rejecting the Israeli job offer?

  3. radii says:

    if Summers had been able to take the Fed Chief’s job, wouldn’t that have almost been the same thing?

  4. Keith says:

    Below I provide a quote and a link to an interesting review of Larry Summers career from when Summers was the preferred candidate for Federal Reserve chairman. This should also provide some insight into Obama’s priorities.

    “Summers was somewhere involved in all these policy fiascos—from the original $787 billion, business tax cut heavy stimulus, to the generous bankster bailouts, to failing to prevent the homeowner foreclosures (while subsidy mortgage lenders)….The point of this Summers’ policy history review is to show that Larry Summers has always done what the banksters have wanted….” (Jack Rasmus)
    link to counterpunch.org

    • Keith says:

      Let me add one more thing. Larry Summers, Alan Greenspan and Robert Rubin were dubbed “The Committee to Save the World” by Time Magazine for their role in the financial crisis. A better title would have been “The Committee That Screwed the World.”

  5. I’d let Larry Summers mow my lawn. I’d even pay his ticket up here if he agreed to do it.

  6. Nevada Ned says:

    Larry Summers is not a people person. So he was really unsuited to being Harvard President. He managed to offend enough people* that he was eventually forced to resign.
    But he’s really smart. Some other people involved in the financial collapse were not so smart, and George W. Bush was fairly stupid. Which means Summers didn’t have the excuse that W did.

    *example #1: he thought that everyone knows free trade is best for everyone, and only idiots are opposed to free trade. Some Congressmen, whose districts are full of unemployed people whose jobs were moved to China, asked what planet Larry Summers was living on.
    example #2: Summer voiced opposition to DBS, and offended pro-Palestinian activists, but this is (alas) a small number.
    example #3: Summers offended women by arguing that no university would discriminate against women applicants for faculty positions, because if they did, the discriminating universities would allow other universities to hire outstanding female scholars, gaining an advantage in the recruiting wars.
    It is a well-established fact that universities used to discriminate against women and minorities. Here Summers managed to offend women, while displaying the ideology that free markets solve all problems.
    Incidentally if you go back long enough, you find Harvard discriminating against Jews. (Norbert Wiener was a towering figure in engineering and applied mathematics, who couldn’t be hired at Harvard a century ago, which hardly hired any Jewish faculty. So Wiener went to MIT instead and is regarded as a legend there.)
    example #4: Summers attempted to centralize control of Harvard’s money in the hands of the University President. Traditionally, each unit of Harvard raised its own funds, and the Univ. President only controlled about 1% of the budget. Summers tried to change that, and lost. Here Summers made enemies of some of the Deans.
    example: #5: Under Summers, Harvard paid up to $30M each to stock-pickers, managing Harvard’s enormous endowment. This angered alumni, who saw their donations going to pay a fortune to stock-pickers. Here Summer offended alumni.
    example #6: The Harvard Endowment was invested heavily in Credit Default Swaps and similar “creative” financial instruments. When the crash came, Harvard had to raise cash for its operating expenses by selling real-estate assets at fire-sale prices.
    example #7 Summers got into a public fight with Cornell West, who quit Harvard for Princeton. West proclaimed that Summers was “the Ariel Sharon of American Higher Education”. Another prominent professor of Afro-Am studies quit Harvard at around the same time, and Skip Gates almost left but ultimately decided to stay.

    The list goes on and on and on….

  7. kalithea says:

    Just because he backs the Zionist crazy train doesn’t mean he wants to board it. He’s not that stupid!

  8. RE: “In August, [Republican Senator Pat] Roberts said, ‘I wouldn’t want Larry Summers to mow my yard’.” ~ NYT

    SOME CONTEXT from The Wichita Eagle:

    [EXCERPT] . . . Yellen, vice chairman of the Federal Reserve, is widely considered to be vying with former Treasury Secretary Lawrence Summers for that key job.
    Roberts said Yellen has more support in the Senate, which must approve the appointment.
    “I wouldn’t want Larry Summers to mow my yard,” Roberts said. “He’s terribly controversial and brusque and I don’t think he works well with either side of the aisle, quite frankly.”
    But he expressed reservations about Yellen, as well. . .

    SOURCE – link to kansas.com

  9. just says:

    “Karnit Flug appointed Bank of Israel Governor

    After 112 days without a Bank of Israel governor, Prime Minister Netanyahu and Finance Minister Lapid appoint first ever woman for chief BoI post; former governor Fischer widely believed to have wanted Flug to succeed him.

    Prime Minister Binyamin Netanyahu and Finance Minister Yair Lapid have appointed Karnit Flug to be the next Bank of Israel Governor., after more than 100 days without a treasury chief and a roster of nominees who came and went.

    Flug, is the Deputy Bank of Israel Governor and has served as the acting central bank chief since former governor Stanley Fischer’s resignation in June.”

    link to jpost.com

    I guess that “congratulations” are in order……….

  10. Kathleen says:

    Had no idea that Ohio Senator Sherrod Brown (I worked my ass off on his two senate campaigns) led the push back against Summers.

    It was Summers and Rubin who pushed the destruction of the Glas Steagall Act right? Convinced Clinton to sign the legislation. I think this is right. Creating the environment for last economic debacle. Clinton signed that deal. Folks do not like to think about this.

    Summers sees the Israeli forecast.

    • Citizen says:

      From firedoglake:

      “Volcker continued to oppose the expansion of banks into the securities underwriting business until his retirement in August 1987. At this time there was still support for Glass-Steagall in Congress (even from Schumer who wrote an oped for the NYT, Don’t Let Banks Become Casinos) and so, even with Greenspan at the Fed continuing to advocate for repeal, the most Citicorp and others could do was to chip away at regulations. Over the years several attempts were made to change the law but failed to win passage in Congress. It would take a Republican Congress and the Clinton administration’s Robert Rubin and Larry Summers at Treasury to repeal Glass-Steagall.”
      link to my.firedoglake.com

  11. Can he join another government of a different country after serving the government of US?
    Is there no risk to the national interest ? Or is it something that even does not raise a red flag for he is being hired by Israel?