1 00:00:02,480 --> 00:00:07,360 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,600 --> 00:00:11,240 Speaker 2: For our Bloomberg audiences worldwide. I'm David Weston and we're 3 00:00:11,280 --> 00:00:14,320 Speaker 2: joined now by Larry Summers of Harvard. Larry, thank you 4 00:00:14,320 --> 00:00:16,680 Speaker 2: so much for joining us. You've spent much of your 5 00:00:16,680 --> 00:00:18,599 Speaker 2: career when you've written in Washington as a professor at 6 00:00:18,600 --> 00:00:21,000 Speaker 2: Harvard and then as president of Harvard as well. So 7 00:00:21,040 --> 00:00:23,200 Speaker 2: we want to ask you about this letter that came 8 00:00:23,239 --> 00:00:25,480 Speaker 2: in on Friday from the United States government. I've read 9 00:00:25,520 --> 00:00:28,319 Speaker 2: the letter carefully. Set aside for the moment some of 10 00:00:28,320 --> 00:00:30,960 Speaker 2: the things that some people find forraconian. Does the Trump 11 00:00:31,000 --> 00:00:33,760 Speaker 2: administration have a point, particularly with respect to dealing with 12 00:00:33,800 --> 00:00:36,920 Speaker 2: antisemitism and diversity of viewpoint those things you have spoken 13 00:00:36,960 --> 00:00:37,720 Speaker 2: out on before. 14 00:00:38,600 --> 00:00:42,760 Speaker 1: David, I've been sharply critical of Harvard, and I continue 15 00:00:42,800 --> 00:00:48,360 Speaker 1: to be critical on many dimensions. Anti Semitism is still 16 00:00:48,840 --> 00:00:53,559 Speaker 1: not responded to strongly enough. There are still excesses of 17 00:00:53,640 --> 00:01:01,280 Speaker 1: identity politics. There's still concerns about intellectual diversity. That's all right, 18 00:01:02,280 --> 00:01:06,160 Speaker 1: But here's the thing. In America, you have to follow 19 00:01:06,200 --> 00:01:11,480 Speaker 1: the law and the approach the Trump administration is taking 20 00:01:12,080 --> 00:01:18,040 Speaker 1: of simply announcing and across the board freeze is wildly 21 00:01:18,880 --> 00:01:26,840 Speaker 1: extra legal in its approach. It is not at all 22 00:01:27,040 --> 00:01:31,720 Speaker 1: consistent with the Civil Rights Act, it is probably not 23 00:01:31,880 --> 00:01:36,959 Speaker 1: consistent with Harvard's First Amendment rights. And so the right 24 00:01:37,040 --> 00:01:42,920 Speaker 1: thing to do was surely for Harvard to respond vigorously 25 00:01:43,160 --> 00:01:48,559 Speaker 1: and strongly. All the more because this is not an 26 00:01:48,760 --> 00:01:52,240 Speaker 1: isolated thing what's being done to Harvard. This is not 27 00:01:52,520 --> 00:01:58,720 Speaker 1: a manifestation of a particular concern about aspects of universities. 28 00:01:59,280 --> 00:02:02,040 Speaker 1: This is a part part of a broad and sweeping 29 00:02:02,200 --> 00:02:10,280 Speaker 1: effort to suppress institutions that challenge the presidential administration. It's 30 00:02:10,360 --> 00:02:13,440 Speaker 1: part of what's being done to law firms. It's part 31 00:02:13,440 --> 00:02:16,440 Speaker 1: of what's being done to countries. It's part of what's 32 00:02:16,480 --> 00:02:20,400 Speaker 1: being done to judges. It's part of what's being done 33 00:02:20,480 --> 00:02:25,959 Speaker 1: to legal residents of our country. And if an institution 34 00:02:26,360 --> 00:02:33,520 Speaker 1: like Harvard cannot resist tyranny when applied to it, with 35 00:02:33,760 --> 00:02:38,000 Speaker 1: Harvard's fifty billion dollar endowment, with all its network, with 36 00:02:38,080 --> 00:02:43,600 Speaker 1: all its prestige, then who can. So Harvard should not 37 00:02:43,720 --> 00:02:49,160 Speaker 1: go interjecting itself into politics, but God, when it is 38 00:02:49,280 --> 00:02:55,720 Speaker 1: the object of an extra legal set of orders and threats, 39 00:02:56,840 --> 00:02:59,720 Speaker 1: I don't think it had any viable choice at all. 40 00:03:00,160 --> 00:03:03,120 Speaker 1: But to respond strongly. 41 00:03:03,600 --> 00:03:06,200 Speaker 2: Let's talk about that extra legal part of what you're 42 00:03:06,200 --> 00:03:10,280 Speaker 2: saying at least defonic. The representative Republican from New York 43 00:03:10,800 --> 00:03:13,880 Speaker 2: actually give an interview today and Arrival Network saying, listen, 44 00:03:14,680 --> 00:03:18,240 Speaker 2: colleges like Harvard don't have a right to money from 45 00:03:18,280 --> 00:03:20,400 Speaker 2: the government. They don't have a right to tax mayor money. 46 00:03:20,520 --> 00:03:22,480 Speaker 2: And if they don't have a right to tax mayor money, 47 00:03:22,600 --> 00:03:28,160 Speaker 2: can't the government put conditions on that money? Show? 48 00:03:28,840 --> 00:03:34,120 Speaker 1: Here's the thing. First of all, the money is not going. 49 00:03:34,200 --> 00:03:38,200 Speaker 1: It's not like the government's funding the DEI office at Harvard. 50 00:03:38,520 --> 00:03:42,640 Speaker 1: Not like the government is funding the student discipline mechanism 51 00:03:43,040 --> 00:03:47,640 Speaker 1: at Harvard. The government is funding researchers who are doing 52 00:03:47,760 --> 00:03:54,800 Speaker 1: vitally important research on diseases like diabetes and cancer and als. 53 00:03:55,680 --> 00:04:01,000 Speaker 1: Show what sense does it make to cut they're funding 54 00:04:01,200 --> 00:04:05,960 Speaker 1: off because somebody doesn't like what the associate dean of 55 00:04:06,120 --> 00:04:13,000 Speaker 1: students did in a student discipline case. And what remit 56 00:04:13,120 --> 00:04:19,960 Speaker 1: does the government have to set as a condition the 57 00:04:20,000 --> 00:04:24,000 Speaker 1: composition which beliefs are valued, in which beliefs are not 58 00:04:24,200 --> 00:04:29,240 Speaker 1: valued in the Harvard Sociology department, That's not the way 59 00:04:29,800 --> 00:04:38,200 Speaker 1: free speech works are in a free society. And this 60 00:04:38,440 --> 00:04:41,719 Speaker 1: is supposed to be done the power of the purse. 61 00:04:41,880 --> 00:04:46,760 Speaker 1: Remember by Congress. It is not the prerogative of the 62 00:04:46,839 --> 00:04:55,160 Speaker 1: executive branch with three days notice, with no hearing, no 63 00:04:55,360 --> 00:05:03,560 Speaker 1: judicial review, no transparent notification to Congress, as mandated by statute, 64 00:05:03,880 --> 00:05:10,159 Speaker 1: to simply indiscriminately start cutting off previously promised and committed 65 00:05:11,440 --> 00:05:16,599 Speaker 1: funds because it has a disagreement over an issue with 66 00:05:17,600 --> 00:05:19,760 Speaker 1: the university. 67 00:05:20,400 --> 00:05:21,880 Speaker 2: So, Larry, give us a sense of what is a 68 00:05:21,880 --> 00:05:24,880 Speaker 2: practical matter this will mean if it continues through. You 69 00:05:25,000 --> 00:05:27,159 Speaker 2: ran Harvard at one point. You know the budget, You 70 00:05:27,240 --> 00:05:29,880 Speaker 2: know that fifty three billion dollars in downand there what 71 00:05:29,920 --> 00:05:32,200 Speaker 2: will it do their operations? 72 00:05:33,360 --> 00:05:39,039 Speaker 1: Look, they'll have to make some very important strategic choices. 73 00:05:39,839 --> 00:05:44,520 Speaker 1: I hope that the university will find ways even if 74 00:05:44,560 --> 00:05:51,359 Speaker 1: there is a cutoff for some interval of funds, to 75 00:05:51,560 --> 00:05:58,840 Speaker 1: maintain vitally important programs, to not cut back research. But potentially, 76 00:05:59,480 --> 00:06:05,000 Speaker 1: if the US government goes to war with our great universities, 77 00:06:05,680 --> 00:06:11,360 Speaker 1: it means a sharp reduction in the kind of scientific 78 00:06:11,480 --> 00:06:15,880 Speaker 1: progress that has caused the United States to be the 79 00:06:16,040 --> 00:06:19,760 Speaker 1: envy of the world and pull so far ahead of 80 00:06:19,800 --> 00:06:24,800 Speaker 1: Europe and Japan. It means the end of efforts at 81 00:06:25,080 --> 00:06:33,839 Speaker 1: cures to diseases like cancer and diabetes. It means a 82 00:06:33,960 --> 00:06:39,160 Speaker 1: substantial risk to our national security because one of our 83 00:06:39,240 --> 00:06:44,240 Speaker 1: great national assets has been our capacity for innovation, which 84 00:06:44,320 --> 00:06:52,039 Speaker 1: resides very heavily in our leading academic institutions. So a 85 00:06:52,160 --> 00:06:57,240 Speaker 1: short run problem, I think that can be managed painfully 86 00:06:57,480 --> 00:07:02,440 Speaker 1: until the judiciary steps in and does what's necessary, a 87 00:07:03,120 --> 00:07:09,880 Speaker 1: long run war against the universities that is going after 88 00:07:10,640 --> 00:07:14,280 Speaker 1: what is our hugest asset. You know, if I think 89 00:07:14,320 --> 00:07:17,720 Speaker 1: about all the different sectors of the economy, it's hard 90 00:07:17,760 --> 00:07:21,640 Speaker 1: to think of one where we are as dominant as 91 00:07:21,960 --> 00:07:26,040 Speaker 1: in higher education. All the students from all over the world, 92 00:07:26,360 --> 00:07:30,720 Speaker 1: at least until this administration came, wanted to come to 93 00:07:32,000 --> 00:07:36,520 Speaker 1: the United States. A vast fraction of the world's innovation 94 00:07:37,120 --> 00:07:41,480 Speaker 1: takes place in American universities. If we put at this 95 00:07:41,880 --> 00:07:46,200 Speaker 1: put that at risk, we are making, I believe, a 96 00:07:46,360 --> 00:07:53,320 Speaker 1: very very grave mistake. And yes, these issues should be pursued. 97 00:07:53,840 --> 00:07:58,840 Speaker 1: But destroying medical research grants because you don't think people 98 00:07:58,840 --> 00:08:01,800 Speaker 1: have been disciplines of early enough, it really doesn't make 99 00:08:01,800 --> 00:08:02,400 Speaker 1: any sense. 100 00:08:03,280 --> 00:08:05,680 Speaker 2: Laurie, I wonder if there's cautionary tail here that maybe 101 00:08:05,880 --> 00:08:09,080 Speaker 2: the higher education system has become too intertwined with the government, 102 00:08:09,120 --> 00:08:14,160 Speaker 2: that's why they're so dependent upon them. 103 00:08:14,320 --> 00:08:19,240 Speaker 1: That there may be questions that can be asked of 104 00:08:19,280 --> 00:08:24,400 Speaker 1: that kind. But gosh, if the government is not prepared 105 00:08:25,000 --> 00:08:30,880 Speaker 1: to fund basic research, the research which ultimately will make 106 00:08:31,000 --> 00:08:34,920 Speaker 1: possible the development of new products, I think we have 107 00:08:34,960 --> 00:08:39,240 Speaker 1: a problem. If the government is not prepared to fund 108 00:08:39,840 --> 00:08:44,560 Speaker 1: scholarships that promote opportunity for our poorest students, who are 109 00:08:44,679 --> 00:08:50,160 Speaker 1: very able and generate social mobility, I think we have 110 00:08:50,559 --> 00:08:54,360 Speaker 1: a problem. I think what we need, frankly, is a 111 00:08:54,960 --> 00:08:59,120 Speaker 1: more mature relationship between the government, the broader society, and 112 00:08:59,160 --> 00:09:05,280 Speaker 1: the university. Yes, the universities have made some very serious mistakes, 113 00:09:05,840 --> 00:09:11,199 Speaker 1: and yes they should be pressured and pressured with escalating 114 00:09:11,320 --> 00:09:18,479 Speaker 1: strength to change that. I didn't even have an objection 115 00:09:19,120 --> 00:09:22,840 Speaker 1: to the way in which the Biden administration opened civil 116 00:09:22,920 --> 00:09:27,640 Speaker 1: rights cases with respect to a variety of universities and 117 00:09:27,920 --> 00:09:33,480 Speaker 1: anti semitism. But that's a very different thing than the 118 00:09:33,640 --> 00:09:39,880 Speaker 1: kind of persecution that is involved here. And this escalated yesterday, 119 00:09:39,960 --> 00:09:45,079 Speaker 1: David in a profoundly troubling way, when the President of 120 00:09:45,120 --> 00:09:52,920 Speaker 1: the United States endeavored by social media to engage in 121 00:09:53,000 --> 00:09:58,040 Speaker 1: an individual specific tax matter, namely Harvard's five oh one 122 00:09:58,200 --> 00:10:03,600 Speaker 1: C three deduction, and to suggest that it be decided 123 00:10:04,160 --> 00:10:10,079 Speaker 1: on the basis of a political ground. That's the kind 124 00:10:10,120 --> 00:10:16,960 Speaker 1: of interference with the IRS that it's a sacred duty 125 00:10:17,559 --> 00:10:25,600 Speaker 1: of the Treasury Secretary to resist. It's exactly what was 126 00:10:25,640 --> 00:10:31,320 Speaker 1: alleged to have happened six levels down, and many people 127 00:10:31,840 --> 00:10:35,319 Speaker 1: got very upset in connection with the so called Loess 128 00:10:35,440 --> 00:10:40,040 Speaker 1: Learner case involving five O one C three deductions and 129 00:10:40,120 --> 00:10:46,400 Speaker 1: conservative groups. If there was punishment of conservative groups, people 130 00:10:46,440 --> 00:10:49,960 Speaker 1: were absolutely right to have been hugely outraged about it 131 00:10:50,360 --> 00:10:53,160 Speaker 1: during the Biden administration. I don't know anything about the 132 00:10:53,200 --> 00:10:55,760 Speaker 1: merits of the case, but for the President of the 133 00:10:55,880 --> 00:11:01,000 Speaker 1: United States to be calling for changing the tax status 134 00:11:01,040 --> 00:11:07,920 Speaker 1: of his adversaries, this is new and I believe authoritarian 135 00:11:08,679 --> 00:11:13,439 Speaker 1: and a real question about our democracy. 136 00:11:13,720 --> 00:11:16,240 Speaker 2: Larry, one last question, since we're on taxes and this 137 00:11:16,400 --> 00:11:19,640 Speaker 2: is tax week, Basically, what do you make of the 138 00:11:19,720 --> 00:11:22,439 Speaker 2: actions that the Trump administration is taking with respect to 139 00:11:22,480 --> 00:11:23,079 Speaker 2: the IRS. 140 00:11:26,960 --> 00:11:31,440 Speaker 1: I think it's possible that the Treasury Secretary and his 141 00:11:31,559 --> 00:11:39,320 Speaker 1: senior colleagues are being seriously delinquent in their duty. I 142 00:11:39,400 --> 00:11:42,880 Speaker 1: look at tens of thousands of people being pushed out 143 00:11:42,920 --> 00:11:48,480 Speaker 1: of the IRS, even as tax compliance is a massive problem, 144 00:11:48,960 --> 00:11:53,160 Speaker 1: and hears so many stories have increased tax cheeing as 145 00:11:53,200 --> 00:11:58,480 Speaker 1: a consequence. I see the elevation of a person with 146 00:11:58,640 --> 00:12:06,120 Speaker 1: no experience administrative or information technology experience to be the 147 00:12:06,160 --> 00:12:11,400 Speaker 1: contemporary commissioner of the IRS, chosen on the basis of 148 00:12:11,480 --> 00:12:16,880 Speaker 1: political loyalty to the Trump enterprise. I look at what 149 00:12:17,000 --> 00:12:22,199 Speaker 1: are probably the extra lawful agreements entered into without even 150 00:12:22,280 --> 00:12:26,720 Speaker 1: speaking to people at the IRS with respect to information 151 00:12:26,920 --> 00:12:33,000 Speaker 1: sharing and immigration. I look at the president's involvement in 152 00:12:33,920 --> 00:12:42,200 Speaker 1: specific cases, and I see the most important line that 153 00:12:42,360 --> 00:12:44,800 Speaker 1: I thought I was supposed to defend when I was 154 00:12:44,880 --> 00:12:53,920 Speaker 1: Treasury secretary, a political tax enforcement, neutral professional tax enforcement, 155 00:12:54,559 --> 00:13:00,880 Speaker 1: not driven by politics. And I see that line being 156 00:13:01,040 --> 00:13:07,360 Speaker 1: crossed with the Treasury Department cheering it on, and it 157 00:13:07,400 --> 00:13:10,679 Speaker 1: makes me both very sad and very angry. 158 00:13:11,000 --> 00:13:13,800 Speaker 2: Larry, thank you so very much, really appreciate That's Larry Summers, 159 00:13:13,800 --> 00:13:16,000 Speaker 2: form treasure Secretary, now with Harvard