Obama's Shorts

The Obama campaign convened a conference call earlier this week to flesh out the Democratic nominee's message on the financial crisis. It had two participants, both men: Lawrence Summers, who served as Treasury Secretary at the end of the Clinton administration before taking over as president of Harvard, and William Donaldson, who, as chairman of the Securities and Exchange Commission during the Bush administration, presided over the loosening of capital requirements for broker-dealers such as Bear Stearns and Lehman Brothers.

What interests us is that, in addition to their positions as advisers to the Obama campaign and as former government officials, Messrs. Donaldson and Summers both work for firms active in the financial industry. Mr. Summers is a managing director of D.E. Shaw, which a spokeswoman described as "a global investment firm." "We on any given day are long and short literally thousands of different stocks," she told us. Mr. Donaldson told us that neither he nor his firm Donaldson Enterprises engage in any shortselling. He is chairman of the advisory council of Perella Weinberg Partners, whose Web site lists one of its investment strategies as "Diversified long/short equity."

New York's two Democratic senators, Senators Clinton and Schumer, issued a statement Wednesday calling on the Securities and Exchange Commission to impose a temporary halt on short-selling of financial institutions. The California Public Employees' Retirement System said yesterday it would no longer make shares available for borrowing to those trying to short Goldman Sachs or Morgan Stanley. It will be interesting to see whether the firms of Mr. Obama's economic advisers will forswear a chance to profit in order to abide by the recommendations of Mr. Obama's colleagues in the Senate Democratic caucus.