A Conversation with Lawrence Summers.

Publication: Finance Wire

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Original Source: THE CHARLIE ROSE SHOW

CHARLIE ROSE, HOST: Welcome to the broadcast. Lawrence Summers, Larry Summers to many, steps down tomorrow after five years as president of Harvard. It`s been a tumultuous time, and he talks about it with us.

(BEGIN VIDEO CLIP)

LAWRENCE SUMMERS, PRESIDENT, HARVARD: There was a lot of controversy that happened in five years, and that was probably a consequence of the approach I took, and it was probably a consequence of who I am and the approach I`ve taken in different jobs.

So yes, I`ve learned some very important things for myself. I`ve learned more about the nature of the university. But I feel very good, Charlie, as I leave. I feel that the university has a different spirit, has a spirit that is more self-questioning and less -- and less complacent, so I believe it has a very good foundation for its future.

(END VIDEO CLIP)

CHARLIE ROSE: Larry Summers for the hour, coming up.

(COMMERCIAL BREAK)

CHARLIE ROSE: Larry Summers is here. Here`s the former secretary of the treasury and chief economist of the World Bank. He is currently the president of Harvard University. Tomorrow, he will step down after five years at the helm of the nation`s oldest university. He leaves as the most closely watched and controversial figure in American education. I am pleased to have him here at this table for a conversation about his life, about the experiences he`s had at Harvard, and about how he sees the economy, one of his primary areas of expertise.

Let me begin by saying welcome.

LAWRENCE SUMMERS: Glad to be with you, Charlie.

CHARLIE ROSE: Great to see you. Tell me how you`re going to feel tomorrow.

LAWRENCE SUMMERS: Oh, I`m going to feel a sense of relief without the responsibilities I`ve carried for the last five years. I`m going to have a sense of looking forward to the economic writing and research that I hope to do. I`m going to feel good about the things that have been accomplished at Harvard these last five years. I`m going to, obviously, have some regrets about the things that I might have hoped to be part of that I won`t be part of as the university builds its future.

But overall, Charlie, I`m feeling very good and I`m looking forward after 15 years of various kinds of administrative and leadership positions for a chance to get back to thinking about the crucial economic and policy and international questions that are before this country, and to be able to write and speak freely about those question.

CHARLIE ROSE: You have already began to do that. I saw a very wise speech you have made, or a comment you had made about the current accounts deficit and the risk that it has for America.

LAWRENCE SUMMERS: You know, you know, Charlie, most people who smoke don`t actually die early because of their smoking, but many do. And so it`s a needless risk for people to take. That`s how I see the magnitude of our current account deficit and our international borrowing.

Nobody can be certain that it means the apocalypse, but it`s taking a chance that we as a country shouldn`t be taking with economic instability, and that`s why it`s so important that we increase our savings, that we focus on exporting more, that we do many of the kinds of things that we`ve been talking about for a long time as a country, but actually drifting further behind on, whether it`s with respect to the rate at which we save, the extent to which we`re investing in new science and engineering, the ways in which we`re investing in education for all our citizens. These were issues that in some ways we tried to work on at Harvard, and I think they`re absolutely crucial for our future and to reduce the risks that are inherent in that future.

CHARLIE ROSE: There`s nobody that doesn`t think that Larry Summers is one of the smartest guys they`ve met. You go back to Harvard, or you never leave Harvard as a university professor, which -- what are there, four, five, university professors...

LAWRENCE SUMMERS: About a dozen.

CHARLIE ROSE: About a dozen, OK, but it`s the most distinguished position they have to offer a member of the faculty, correct?

LAWRENCE SUMMERS: Yes.

CHARLIE ROSE: Let me talk about what it is that you wanted to do. How you believe you set this university, America`s -- certainly top three or four most prestigious universities -- in the direction to do that, to give me an insight into what you had made a judgment about that was important.

LAWRENCE SUMMERS: Charlie, I started with this: That I was going to be about the future, that the Harvard of the common rooms and the house masters and the memorial churches and the great traditions was hugely important, but it would take care of itself. And my focus was going to be the undergraduate students, who are really the lifeblood of a great university, but too often are also its forgotten children. My focus was going to be the post-docs, who five years ago didn`t have any health insurance. My focus was going to be the people, the assistant professors whose office lights were on at 2:00 in the morning. My focus was going to be the potential to do research at Harvard that could change the world, by using stem cells to find a cure for Parkinson`s. That my overall emphasis was going to be towards the future, and it was going to be one of challenging a great institution to be even better.

And I was, for five years, a person in a hurry, a person in a very great hurry, because I believed there was so much -- and do believe -- there was so much that Harvard could do that would really be transformative in its impact. We did some things that I think are very important these last years, at a time when not just inequality is increasing in America, but social mobility is increasing as well. We sent, I think, a very important signal by saying that any family with an income below $60,000, below the average income in the country, could send their child to Harvard without paying any tuition at all. We made -- go ahead.

CHARLIE ROSE: No, no, you go ahead.

LAWRENCE SUMMERS: We made a -- we made major investments in the biomedical sciences at a time when the federal government is cutting back, and at a time when some of the research that`s most promising, using stem cells, is actually off limits for the federal government. We used Harvard`s formidable resources to try to fill that gap.

You know, I was struck from my time in government, and certainly everything that`s happened in the last few years, that there hasn`t been a period when there was more misunderstanding of the United States and misunderstanding by the United States of the rest of the world. We, I think, have done something that can be very important in changing that over time. Today, two-thirds of a Harvard class has an international experience each year during the term, or over the summer, and Harvard`s on the way where in just a few years, every student before they graduate from Harvard will have an important international experience. And I know from when I was young and from many, many stories of other people that that has...

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