Last week, Ma Yglesias suggested that this was a deliberate trial balloon by the White House to see if Summers is acceptable. Yglesias made a good point that while there was a lot of criticisms of Summers in the blogosphere, this was likely expected. The question came down to is it more or less than the White House expected?
Read more: http://www.businessinsider.com/new-york-times-endorses-janet-yellen-2013-7#ixzz2afcF14ch
It's now crystal clear that it's much worse than the White House had hoped. There was an attempt yesterday to put the idea out there with a piece in the Wall Street Journal that Summers is a dove. Today the President himself defended Summers in a meeting with House Democrats. That's all you really need to know to be able to conclude that this is much worse than had been expected, to say nothing of hoped, by the White House.
However, it just keeps getting worse. There's little doubt that liberals have been convinced that Yellen is the right choice. The trouble is that the support for Yellen is both for her and against him. Meanwhile, no one is opposed to Yellen even if they support Summers. It really is getting bad: even I, myself, the ultimate Obama partisan and loyal foot soldier, have to admit I've been swayed. I now think that Yellen is the choice, period. Or anyway, Summers is unacceptable. He has too much baggage, and, really what do we know about what he knows about monetary policy?
In the latest case, we have the NYTimes really endorsing Yellen as if this is a political campaign.
"The "race" between Larry Summers and Janet Yellen to succeed Ben Bernanke is becoming more and more like a political battle every day."
Read more: http://www.businessinsider.com/new-york-times-endorses-janet-yellen-2013-7#ixzz2afcF14ch
True and it's a game she's simply cleaning his clock in. It's so total that some suggest that the WH actually really wants Yellen and is conditioning the markets and everyone else to expect her-and more, demand her.
Interesting. Ok, the NYTimes:
"Despite a campaign from allies both inside and outside the White House, the recent drive to install Lawrence Summers as the next chairman of the Federal Reserve seems to be faltering — and with good reason: He is not the best person for the job, as a group of Democratic senators made clear in a letter to President Obama last week calling for the nomination of Janet Yellen, the vice chairwoman of the Fed’s board of governors."
"A Yale educated economist and professor emeritus at the University of California, Berkeley, she was first nominated and confirmed to the Fed board in the 1990s; from 2004 to 2010, she served as the president of the Federal Reserve Bank of San Francisco. She has been vice chairwoman since 2010, a trying time in which the Fed’s largely successful efforts to steer the economy have been made all the more difficult by poor fiscal policy decisions, including the White House’s premature pivot from stimulus to deficit reduction, which happened while Mr. Summers was a top adviser to Mr. Obama."
In a point of digression, let me just observe that I love the NYTimes. Just the way they phrase stuff is just tremendous. The Times identifies the 'insular' Summers supporters-a nefarious band of Rubinites:
"What has changed in the past week is that the power dynamics around economic policy-making have become more public than normal. Mr. Rubin and his circle — including Mr. Summers; Timothy Geithner, Mr. Obama’s first Treasury secretary; and Gene Sperling, currently a top economic adviser to the president — have dominated economic decisions in both the Clinton and Obama administrations. Most of them were also prominent in Wall Street circles in the George W. Bush years. In the wake of the financial crisis and the Dodd-Frank reform law, the Fed chairmanship has only become more central to the fate of the banks and economy; as a result, they want someone who shares their background and can be counted on to further their views."
Sorry. If you're looking for a defense of Summers at this point, I got nothing. Brad Delong did mount a defense of him the other day-and I love Mr. Delong who just recently very kindly linked a post of mine to his blog.
However, I must say that while Delong is a very smart guy, he couldn't really come up with a very compelling case for Summers either. His argument was 'Well we're in desperate times so we need a guy who's not afraid to call his own plays and do something really unorthodox.' If that's the best Summers can get it's not looking fortuitous
Delong may have a slight preference for Summers; however, most other liberals and economists have a more than slight aversion to him and a very large preference for Yellen.
UPDATE: As I said, this anti Summers campaign has been really effective. Usually if Summers were the President's guy I'd be all for him. Normally I'd applaud Harry Reid here:
“Larry Summers is a longtime friend of mine. I like him a lot. I think he’s a very competent man. But that decision is up to the president. Whoever the president selects, this caucus will be for that person — no matter who it is.”
http://www.washingtonpost.com/blogs/plum-line/wp/2013/07/31/larry-summers-will-face-opposition-from-some-democrats/
Yet, this time is different. I just don't see any reason to do Summers at this point. On the issues that matter-Fed policy and regulating the banks under the new Frank-Dodd regulations he's unknown on the first count and on the second he's highly suspect.
UPDATE: As I said, this anti Summers campaign has been really effective. Usually if Summers were the President's guy I'd be all for him. Normally I'd applaud Harry Reid here:
“Larry Summers is a longtime friend of mine. I like him a lot. I think he’s a very competent man. But that decision is up to the president. Whoever the president selects, this caucus will be for that person — no matter who it is.”
http://www.washingtonpost.com/blogs/plum-line/wp/2013/07/31/larry-summers-will-face-opposition-from-some-democrats/
Yet, this time is different. I just don't see any reason to do Summers at this point. On the issues that matter-Fed policy and regulating the banks under the new Frank-Dodd regulations he's unknown on the first count and on the second he's highly suspect.
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