This is a rush transcript from "On the Record," November 30, 2009. This copy may not be in its final form and may be updated.
GRETA VAN SUSTEREN, FOX NEWS HOST: Please tell us this is not true. Did the president's economic guru, Larry Summers, ignore warnings that cost Harvard University $1.8 billions? According to the "Boston Globe," when Summers was president of Harvard he orchestrated a risky investment strategy with Harvard's cash.
Newspaper reports that the head of the Harvard's Endowment specifically warned Summers that his economic strategy was -- for Harvard was dangerous. The newspaper reports Summers thought he knew better and guess what happened? Harvard lost $1.8 billion when the market crashed.
Now Summers is the director of President Obama's national economic council. Is this really a bad sign?
Joining us live is Steve Moore, senior economic writer for the "Wall Street Journal" editorial page. Steve hi.
I know you may feel a little differently but can't we get somebody who is not arrogant and does not have a record of a catastrophic failure in the face of people warning him?
STEVE MOORE, SENIOR ECONOMIC WRITER, "WALL STREET JOURNAL": Well, it certainly was a catastrophic error, no question about that, Greta. And I agree with you entirely. And maybe you can understand a little bit now with economic wisdom like this in the White House why we are running a trillion and a half dollar deficit and the while the wheels are coming off this stimulus plan.
What happened here Greta is as you said, Larry Summers who's the national economic council president, which means that he's the chief economic adviser to President Obama ignored all the warnings of the financial advisers and said, let's roll the dice here, let's put all the huge percentage of the money into stocks, into hedge funds and into mortgage-backed securities, and guess what? When the stock market collapsed, Harvard lost $1.8 billion.
VAN SUSTEREN: Maybe he is not as smart about this as President Obama thinks, and if he is, we have a 10.2 percent unemployment rate. Why don't we find somebody who has a good track record? Maybe find someone's who has actually run a business? Who's run something?
But to me, to take advice from someone and who has made a catastrophic decision after being warned by others, do not do this, what in the world is President Obama thinking putting him as his chief adviser in economics? That is borderline insane.
MOORE: Well, you know, Larry Summers has the reputation of being the wunderkind. He was the boy wonder economist in the 80s and 90s. He is a very arrogant guy. He does think he has all the answers.
VAN SUSTEREN: But that's reputation -- that is what people say, that's what people talk.
VAN SUSTEREN: What are the facts -- what is the historical fact that's different? Let everybody talk about how great and brilliantly he is. I might add, he's the guy who thought women shouldn't be -- who weren't -- didn't have much aptitude for science...
MOORE: I agree with him on that one. But look, I mean, you're exactly right. Why can't -- I love your idea of getting some people who are economic advisers who have actually businesses. You've probably seen the new study out that shows that Barack Obama has fewer people with business experience in his cabinet than any president in last 100 years. I think that's where they're seriously deficient.
But when he cannot run an endowment fund, how can he run the finances of $3 trillion federal government?
VAN SUSTEREN: But it's even worse because people told him and warned him. He wouldn't even listen to anybody else. That's the problem.
Not only has he made bad dumb mistakes that cost $1.8 billion, and people said, do not do it, and that is the guy who's advising the president on our economy.
MOORE: But you know what Greta? This is exactly what happened with the stimulus plan. I mean back in January, February...
VAN SUSTEREN: He may be the architect of that, who knows?
MOORE: ... Don't do it, it's not going to work. They ignored the advice of good economists, and now we have spent $400 billion, all we have is more debt, and we do not have any more jobs.
VAN SUSTEREN: And I have got to go. Steve thank you.
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