WEBVTT - Former Treasury Secretary Larry Summers Talks Harvard 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>For our Bloomberg audiences worldwide. I'm David Weston and we're

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<v Speaker 2>joined now by Larry Summers of Harvard. Larry, thank you

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<v Speaker 2>so much for joining us. You've spent much of your

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<v Speaker 2>career when you've written in Washington as a professor at

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<v Speaker 2>Harvard and then as president of Harvard as well. So

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<v Speaker 2>we want to ask you about this letter that came

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<v Speaker 2>in on Friday from the United States government. I've read

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<v Speaker 2>the letter carefully. Set aside for the moment some of

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<v Speaker 2>the things that some people find forraconian. Does the Trump

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<v Speaker 2>administration have a point, particularly with respect to dealing with

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<v Speaker 2>antisemitism and diversity of viewpoint those things you have spoken

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<v Speaker 2>out on before.

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<v Speaker 1>David, I've been sharply critical of Harvard, and I continue

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<v Speaker 1>to be critical on many dimensions. Anti Semitism is still

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<v Speaker 1>not responded to strongly enough. There are still excesses of

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<v Speaker 1>identity politics. There's still concerns about intellectual diversity. That's all right,

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<v Speaker 1>But here's the thing. In America, you have to follow

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<v Speaker 1>the law and the approach the Trump administration is taking

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<v Speaker 1>of simply announcing and across the board freeze is wildly

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<v Speaker 1>extra legal in its approach. It is not at all

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<v Speaker 1>consistent with the Civil Rights Act, it is probably not

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<v Speaker 1>consistent with Harvard's First Amendment rights. And so the right

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<v Speaker 1>thing to do was surely for Harvard to respond vigorously

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<v Speaker 1>and strongly. All the more because this is not an

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<v Speaker 1>isolated thing what's being done to Harvard. This is not

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<v Speaker 1>a manifestation of a particular concern about aspects of universities.

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<v Speaker 1>This is a part part of a broad and sweeping

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<v Speaker 1>effort to suppress institutions that challenge the presidential administration. It's

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<v Speaker 1>part of what's being done to law firms. It's part

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<v Speaker 1>of what's being done to countries. It's part of what's

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<v Speaker 1>being done to judges. It's part of what's being done

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<v Speaker 1>to legal residents of our country. And if an institution

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<v Speaker 1>like Harvard cannot resist tyranny when applied to it, with

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<v Speaker 1>Harvard's fifty billion dollar endowment, with all its network, with

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<v Speaker 1>all its prestige, then who can. So Harvard should not

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<v Speaker 1>go interjecting itself into politics, but God, when it is

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<v Speaker 1>the object of an extra legal set of orders and threats,

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<v Speaker 1>I don't think it had any viable choice at all.

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<v Speaker 1>But to respond strongly.

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<v Speaker 2>Let's talk about that extra legal part of what you're

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<v Speaker 2>saying at least defonic. The representative Republican from New York

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<v Speaker 2>actually give an interview today and Arrival Network saying, listen,

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<v Speaker 2>colleges like Harvard don't have a right to money from

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<v Speaker 2>the government. They don't have a right to tax mayor money.

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<v Speaker 2>And if they don't have a right to tax mayor money,

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<v Speaker 2>can't the government put conditions on that money? Show?

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<v Speaker 1>Here's the thing. First of all, the money is not going.

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<v Speaker 1>It's not like the government's funding the DEI office at Harvard.

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<v Speaker 1>Not like the government is funding the student discipline mechanism

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<v Speaker 1>at Harvard. The government is funding researchers who are doing

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<v Speaker 1>vitally important research on diseases like diabetes and cancer and als.

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<v Speaker 1>Show what sense does it make to cut they're funding

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<v Speaker 1>off because somebody doesn't like what the associate dean of

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<v Speaker 1>students did in a student discipline case. And what remit

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<v Speaker 1>does the government have to set as a condition the

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<v Speaker 1>composition which beliefs are valued, in which beliefs are not

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<v Speaker 1>valued in the Harvard Sociology department, That's not the way

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<v Speaker 1>free speech works are in a free society. And this

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<v Speaker 1>is supposed to be done the power of the purse.

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<v Speaker 1>Remember by Congress. It is not the prerogative of the

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<v Speaker 1>executive branch with three days notice, with no hearing, no

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<v Speaker 1>judicial review, no transparent notification to Congress, as mandated by statute,

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<v Speaker 1>to simply indiscriminately start cutting off previously promised and committed

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<v Speaker 1>funds because it has a disagreement over an issue with

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<v Speaker 1>the university.

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<v Speaker 2>So, Larry, give us a sense of what is a

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<v Speaker 2>practical matter this will mean if it continues through. You

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<v Speaker 2>ran Harvard at one point. You know the budget, You

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<v Speaker 2>know that fifty three billion dollars in downand there what

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<v Speaker 2>will it do their operations?

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<v Speaker 1>Look, they'll have to make some very important strategic choices.

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<v Speaker 1>I hope that the university will find ways even if

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<v Speaker 1>there is a cutoff for some interval of funds, to

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<v Speaker 1>maintain vitally important programs, to not cut back research. But potentially,

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<v Speaker 1>if the US government goes to war with our great universities,

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<v Speaker 1>it means a sharp reduction in the kind of scientific

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<v Speaker 1>progress that has caused the United States to be the

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<v Speaker 1>envy of the world and pull so far ahead of

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<v Speaker 1>Europe and Japan. It means the end of efforts at

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<v Speaker 1>cures to diseases like cancer and diabetes. It means a

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<v Speaker 1>substantial risk to our national security because one of our

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<v Speaker 1>great national assets has been our capacity for innovation, which

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<v Speaker 1>resides very heavily in our leading academic institutions. So a

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<v Speaker 1>short run problem, I think that can be managed painfully

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<v Speaker 1>until the judiciary steps in and does what's necessary, a

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<v Speaker 1>long run war against the universities that is going after

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<v Speaker 1>what is our hugest asset. You know, if I think

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<v Speaker 1>about all the different sectors of the economy, it's hard

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<v Speaker 1>to think of one where we are as dominant as

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<v Speaker 1>in higher education. All the students from all over the world,

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<v Speaker 1>at least until this administration came, wanted to come to

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<v Speaker 1>the United States. A vast fraction of the world's innovation

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<v Speaker 1>takes place in American universities. If we put at this

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<v Speaker 1>put that at risk, we are making, I believe, a

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<v Speaker 1>very very grave mistake. And yes, these issues should be pursued.

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<v Speaker 1>But destroying medical research grants because you don't think people

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<v Speaker 1>have been disciplines of early enough, it really doesn't make

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<v Speaker 1>any sense.

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<v Speaker 2>Laurie, I wonder if there's cautionary tail here that maybe

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<v Speaker 2>the higher education system has become too intertwined with the government,

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<v Speaker 2>that's why they're so dependent upon them.

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<v Speaker 1>That there may be questions that can be asked of

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<v Speaker 1>that kind. But gosh, if the government is not prepared

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<v Speaker 1>to fund basic research, the research which ultimately will make

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<v Speaker 1>possible the development of new products, I think we have

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<v Speaker 1>a problem. If the government is not prepared to fund

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<v Speaker 1>scholarships that promote opportunity for our poorest students, who are

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<v Speaker 1>very able and generate social mobility, I think we have

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<v Speaker 1>a problem. I think what we need, frankly, is a

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<v Speaker 1>more mature relationship between the government, the broader society, and

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<v Speaker 1>the university. Yes, the universities have made some very serious mistakes,

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<v Speaker 1>and yes they should be pressured and pressured with escalating

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<v Speaker 1>strength to change that. I didn't even have an objection

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<v Speaker 1>to the way in which the Biden administration opened civil

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<v Speaker 1>rights cases with respect to a variety of universities and

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<v Speaker 1>anti semitism. But that's a very different thing than the

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<v Speaker 1>kind of persecution that is involved here. And this escalated yesterday,

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<v Speaker 1>David in a profoundly troubling way, when the President of

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<v Speaker 1>the United States endeavored by social media to engage in

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<v Speaker 1>an individual specific tax matter, namely Harvard's five oh one

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<v Speaker 1>C three deduction, and to suggest that it be decided

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<v Speaker 1>on the basis of a political ground. That's the kind

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<v Speaker 1>of interference with the IRS that it's a sacred duty

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<v Speaker 1>of the Treasury Secretary to resist. It's exactly what was

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<v Speaker 1>alleged to have happened six levels down, and many people

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<v Speaker 1>got very upset in connection with the so called Loess

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<v Speaker 1>Learner case involving five O one C three deductions and

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<v Speaker 1>conservative groups. If there was punishment of conservative groups, people

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<v Speaker 1>were absolutely right to have been hugely outraged about it

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<v Speaker 1>during the Biden administration. I don't know anything about the

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<v Speaker 1>merits of the case, but for the President of the

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<v Speaker 1>United States to be calling for changing the tax status

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<v Speaker 1>of his adversaries, this is new and I believe authoritarian

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<v Speaker 1>and a real question about our democracy.

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<v Speaker 2>Larry, one last question, since we're on taxes and this

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<v Speaker 2>is tax week, Basically, what do you make of the

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<v Speaker 2>actions that the Trump administration is taking with respect to

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<v Speaker 2>the IRS.

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<v Speaker 1>I think it's possible that the Treasury Secretary and his

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<v Speaker 1>senior colleagues are being seriously delinquent in their duty. I

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<v Speaker 1>look at tens of thousands of people being pushed out

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<v Speaker 1>of the IRS, even as tax compliance is a massive problem,

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<v Speaker 1>and hears so many stories have increased tax cheeing as

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<v Speaker 1>a consequence. I see the elevation of a person with

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<v Speaker 1>no experience administrative or information technology experience to be the

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<v Speaker 1>contemporary commissioner of the IRS, chosen on the basis of

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<v Speaker 1>political loyalty to the Trump enterprise. I look at what

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<v Speaker 1>are probably the extra lawful agreements entered into without even

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<v Speaker 1>speaking to people at the IRS with respect to information

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<v Speaker 1>sharing and immigration. I look at the president's involvement in

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<v Speaker 1>specific cases, and I see the most important line that

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<v Speaker 1>I thought I was supposed to defend when I was

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<v Speaker 1>Treasury secretary, a political tax enforcement, neutral professional tax enforcement,

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<v Speaker 1>not driven by politics. And I see that line being

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<v Speaker 1>crossed with the Treasury Department cheering it on, and it

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<v Speaker 1>makes me both very sad and very angry.

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<v Speaker 2>Larry, thank you so very much, really appreciate That's Larry Summers,

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<v Speaker 2>form treasure Secretary, now with Harvard