Clinton Advisers: Larry Summers Gives Bad Advice on Wall StreetBy
He suggested she defend big banks, attack Sanders over votes
E-mails on WikiLeaks lay out ex-Treasury secretary’s advice
Earlier this year as Hillary Clinton faced a barrage of criticism from her Democratic primary opponent Bernie Sanders about her ties to Wall Street, former U.S. Treasury Secretary Larry Summers reached out to her campaign to offer some advice.
Among his recommendations: Stop trying to compete with Sanders’ attacks on the finance industry and instead promote economic growth. Show how the nation benefits from having banking behemoths that can hold their own against foreign rivals. Maybe remind voters that the Vermont senator opposed using taxpayer funds to bail out Wall Street during the 2008 financial crisis. Summers’s point was that had Congress not rescued lenders the U.S. might have faced a severe Depression.
Clinton’s advisers weren’t impressed.
“Worst advice ever," Clinton campaign chairman John Podesta wrote in a Jan. 23 e-mail to Tina Flournoy, chief of staff to Bill Clinton. “Wrong then, wrong now." Flournoy agreed, according to correspondence posted on the WikiLeaks website.
Representatives for Summers and the Clinton campaign did not immediately respond to requests for comment.
Clinton’s campaign has declined to confirm the authenticity of the alleged Podesta e-mails that Julian Assange’s organization has been releasing in recent days. The campaign, citing U.S. intelligence community assessments, has blamed Russian hackers for targeting Democratic groups in an attempt to meddle in the U.S. election.
Summers’s advice, if legitimate, was outlined in an e-mail he sent directly to Bill Clinton, as well as some of Hillary Clinton’s top advisers, including Gary Gensler, a former chairman of the Commodity Futures Trading Commission who was also a partner at Goldman Sachs Group Inc. Summers’s note critiqued her performance in a recent debate, laying out a list of specific talking points the former secretary of state might want to adopt going forward.
Summers advised Clinton to state that without large, diversified lenders, U.S. regions that are dependent on oil production would be "headed into a catastrophic credit crunch." Summers, who served in both the Clinton and Obama administrations, also suggested that Clinton criticize Sanders for voting against the Troubled Asset Relief Program, the legislation that bailed out banks eight years ago.
“Let’s attack him for being against TARP. Brilliant," Podesta said in the leaked correspondence, appearing to be sarcastic.
Clinton has had a tough time maintaining a middle ground on issues involving the finance industry. As a former New York senator, Clinton developed close ties to many financial companies and remains Wall Street’s favored candidate. She’s faced scrutiny for giving paid speeches before Goldman Sachs and other firms. The purported texts of those speeches were released by WikiLeaks earlier this month.
Summers is now President Emeritus of Harvard University and sits on the board of companies including LendingClub Corp., the online lending platform that is reeling from its disclosure earlier this year that employees altered information on loans the company sold.
— With assistance by Robert Schmidt