by Caitlin Kenney

The New Republic's Noam Scheiber has written an extensive profile of Larry Summers, Director of the National Economic Council, and one of Obama's key advisors. The wide-ranging piece covers Summers from his college debate team days through his work on the current stimulus bill. Here is the bit that grabbed me:

In July, when he was still a civilian, Summers argued in the Financial Times that the government should use its "receivership power" over Fannie Mae and Freddie Mac to wipe out holders of regular and preferred stock and certain types of bonds, "conserving cash for the benefit of taxpayers." He said it should run the companies until the financial crisis passed—perhaps a period of several years—before selling off certain components to the private sector. "It is a time for decisive action," Summers wrote.

 

As the financial crisis has deepened, many economists have proposed something roughly analogous for the country's largest commercial banks. Geithner has so far resisted. The Treasury secretary has opted instead to bolster the balance sheets of hard-up banks with capital from last fall's bank bailout, and to provide government financing for investors interested in purchasing depressed assets. In fairness, there are any number of reasons why someone might support nationalization for Fannie and Freddie but oppose it for large banks, whose balance sheets and business models are far more complex. Still, one can't help wondering if the administration might now be inching toward some version of Summers's FT approach had he been in charge at Treasury. (Summers declined to comment on hypotheticals.)

Summers' inability to gain the support needed to make significant changes in his professional career is highlighted throughout the piece. And though Schieber seems to think it's time to "Free Larry Summers" perhaps as our friend Felix Salmon over at Portfolio suggests, that isn't such a good idea.