But I've liked Cunning Realist for a while now ... hadn't looked at him lately, so I'm grateful for the reminder.

-- Steve V. is absolutely right when he says

I think part of the problem here is this incestuous relationship between Wall Street and D.C.

-- where "the problem" isn't just Summers's absurd salary, but the present crisis. See Simon Johnson:

Wall Street is a very seductive place, imbued with an air of power. Its executives truly believe that they control the levers that make the world go round. A civil servant from Washington invited into their conference rooms, even if just for a meeting, could be forgiven for falling under their sway. Throughout my time at the IMF, I was struck by the easy access of leading financiers to the highest U.S. government officials, and the interweaving of the two career tracks. I vividly remember a meeting in early 2008--attended by top policy makers from a handful of rich countries--at which the chair casually proclaimed, to the room’s general approval, that the best preparation for becoming a central-bank governor was to work first as an investment banker.

A whole generation of policy makers has been mesmerized by Wall Street, always and utterly convinced that whatever the banks said was true.

http://cunningrealist.blogspot.com/