One of the top economic advisers to the Obama administration received roughly $5.2 Million over the past year in compensation from Wall Street hedge fund D.E. Shaw. And Mr. Summers also received hundreds of thousands of dollars in compensation from JP Morgan, Citigroup, Goldman Sachs, and Lehman for speaking engagements.

Source: WSJ

Do you remember the history of Larry Summers? He was the Treasury Secretary in 1999 when Congress repealed the Glass-Steagall Act of 1933. It was that pivotal moment that enabled the financial institutions to become the stars of the epic movie that we have all been watching over the past several years titled ‘banks gone wild’.

From the New York Times (November 5, 1999)

Congress approved landmark legislation today that opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another’s businesses.

The measure, considered by many the most important banking legislation in 66 years, was approved in the Senate by a vote of 90 to 8 and in the House tonight by 362 to 57. The bill will now be sent to the president, who is expected to sign it, aides said. It would become one of the most significant achievements this year by the White House and the Republicans leading the 106th Congress.

”Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,” Treasury Secretary Lawrence H. Summers said. ”This historic legislation will better enable American companies to compete in the new economy.”

The decision to repeal the Glass-Steagall Act of 1933 provoked dire warnings from a handful of dissenters that the deregulation of Wall Street would someday wreak havoc on the nation’s financial system. The original idea behind Glass-Steagall was that separation between bankers and brokers would reduce the potential conflicts of interest that were thought to have contributed to the speculative stock frenzy before the Depression.

Today’s action followed a rich Congressional debate about the history of finance in America in this century, the causes of the banking crisis of the 1930’s, the globalization of banking and the future of the nation’s economy.[...]

[...]The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.

”I think we will look back in 10 years’ time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930’s is true in 2010,” said Senator Byron L. Dorgan, Democrat of North Dakota. ”I wasn’t around during the 1930’s or the debate over Glass-Steagall. But I was here in the early 1980’s when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.”

Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ‘’seemed determined to unlearn the lessons from our past mistakes.”

”Scores of banks failed in the Great Depression as a result of unsound banking practices, and their failure only deepened the crisis,” Mr. Wellstone said. ”Glass-Steagall was intended to protect our financial system by insulating commercial banking from other forms of risk. It was one of several stabilizers designed to keep a similar tragedy from recurring. Now Congress is about to repeal that economic stabilizer without putting any comparable safeguard in its place.”[...]

Larry Summers, the former Treasury Secretary who in 1999 was in favor of taking the leash off the banks and financial institutions that has now cost the American tax payer Trillions of dollars to clean up the mess, and has been receiving money from hedge funds and financial institutions in the past year is the top adviser to the Obama administration?

Mr. Summers… just ‘who‘ is your allegiance with? I don’t think it is with the tax payers.