No wait, still bad news!

I'll let someone else start by doing the talking:

In the Summers years, from 2001 to 2006, nothing was on auto-pilot. He was the unquestioned commander, a dominating personality with the talent to move a balkanized institution like Harvard, but also a man unafflicted, former colleagues say, with self-doubt in matters of finance.

Certainly, when it came to handling Harvard’s cash account, the former US Treasury secretary had no doubts. Widely considered one of the most brilliant economists of his generation, Summers pushed to invest 100 percent of Harvard’s cash with the endowment and had to be argued down to 80 percent, financial executives say. The cash account grew to $5.1 billion during his tenure, more than the entire endowment of all but a dozen or so colleges and universities.

OK, let me put this in Point Break terms: Summers thought that he was gonna ride that once-in-a-generation wave to freedom, but instead was caught on the beach by Keanu Reeves and the Australian police and forced to kill himself. Really, though, how can you blame the guy? To quote C. Scudworth, "I watched the first two-thirds of "MC Hammer: Behind the Music" and if there's one thing I learned about money it's that it never runs out!"

But for cereal, guys, Summers is in charge of the White House's economic policy and he is a man "unafflicted ... by self-doubt." Decisiveness is one thing, and a good one when accompanied by some form of self-reflection. Hubris, however, is forever ugly and dangerous. When commentators speculate on whether or not 1600 Pennsylvania has a long-term strategy to sort out our woeful economic life, I should think that episodes like this one at Harvard would be educational.

Maybe Summers really is the economist that everyone tells him he is, or maybe he's a schmuck who only knows how to hold down the 'on' button. He ignored warnings from two endowment managers, Jack Meyer and Mohammed El-Erian, that tying up all of Harvard's liquidity in high-risk investments could backfire, and would put the university at a severe disadvantage in shoring up the inevitable losses to its endowment if it did. And when it did backfire, Harvard lost nearly $2 billion in what should have been emergency cash, in addition to $11 billion in damage to its $37 billion endowment. It also lost out on the swaps that Summers had relied on to hedge against the risk of a rise in interest rates when rates fell instead, costing a further $500 million. It ultimately took a bond issuance (always an expensive and usually cost-ineffective measure) to shore up Harvard's balance sheet, in addition to a debt sale and aggressive cost-cutting measures across the board.

It wouldn't be fair to put all of this on Summers's shoulders if Harvard wasn't essentially run by a tight group of mandarins who exercise extreme deference to authority. Summers himself left in 2006 after his infamous "women are genetically inferior to men" remarks, which, I suppose, has saved any deeper scrutiny of his role in Pied Pipering the university. Because he had been so dominant in financial matters, however, he left the endowment's managerial team stripped down to an inoperable core which was largely, as the article puts it, operating on auto-pilot. As you can imagine, that was a somewhat problematic arrangement when they hit bad weather and found no one at the wheel.

Auto-pilot? That somehow sounds familiar--could it be how the economy is being steered? The non-presence of Obama's team, or Obama himself, when it comes to matters of financial regulation or the disciplining of investment firms smacks of that same Summersian spirit of laissez-faire. Only since this ship is quite a big bigger than Harvard's, I suspect that any future storms can be expected to cost a lot more than $17 billion.