On Fri, Jul 26, 2013 at 8:43 AM, Marv Gandall <[email protected]> wrote:
> > Referring to this: > > > > Don't let Larry Summers head the Fed > > > http://petitions.moveon.org/sign/dont-let-larry-summers?source=c.url&r_by=1135580 > > Summers is an abusive character, but is there even a dime's worth of > difference between him and the other rumoured contender, Janet Yellen? > Felix Salmon summarizes the case for Yellen v. Summers quite nicely here (mostly linking to the substantive criticisms and providing some meta-commentary): http://blogs.reuters.com/felix-salmon/2013/07/24/dont-send-summers-to-the-fed/ --------------------------------snip The upshot, from doing all that reading, is pretty clear. The arguments for Yellen are very strong; the arguments against Summers are strong; the arguments for Summers are weak; and the arguments against Yellen are all but nonexistent. (While there are lots of people<http://www.huffingtonpost.com/2013/07/23/larry-summers-fed-chairman_n_3641737.html>who think that Summers should not be Fed chair, there’s pretty much no one who feels the same way about Yellen.) As a result, if Obama picks Summers, it won’t be on the merits; instead, it will be on the grounds that Obama *likes* Summers, and is in awe of his intelligence. (Summers is, to put it mildly, not good at charming those he considers to be his inferiors, but he’s surprisingly excellent at cultivating people with real power.) What’s more, the move would be a calculated snub to *bien pensant* opinion. Never mind the utter shambles that Summers made of Harvard, or the way he treated Cornel West, or his tone-deaf speech about women’s aptitude, or the pollution memo, or the Shleifer affair, or the way he shut down Brooksley Born at the CFTC, or his role in repealing Glass-Steagall, or his generally toxic combination of ego and temper — so long as POTUS likes Larry, and/or so long as Summers is good at working key Obama advisors like Geithner, Lew, and Rubin, that’s all that matters. The choice of Summers would also be the clearest signal yet that Obama feels that he did what needed to be done to deal with the financial crisis, and that financial reform is, for the rest of his presidency, going to be a very low priority. Summers is a deregulator in his bones; he didn’t like the consumer-friendly parts of Dodd-Frank, and his actions have nearly always erred on the side of being far too friendly to Wall Street. He considers<http://blogs.reuters.com/lawrencesummers/2012/06/03/breaking-the-negative-feedback-loop/>monetary policy to be largely irrelevant in a zero interest rate environment, and there is no chance whatsoever that he would take a robust leadership role with respect to the Fed’s other big job, which is regulation. If you want to repeat all of the Clinton-era mistakes of financial regulation, you can’t do better than appointing Clinton’s very own Treasury secretary.
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