Larry Summers Is A Terrible Choice For Fed Chief

From January 2012--The man behind Obama and Clinton's economic policies, Channel 4 News

Hey, Beltway? I think it's past time to expand your dating circle, for cryin' out loud. It's just a little too incestuous to really feel comfortable to those of us outside Washington.

And that includes putting Larry Summers as the Chairman of the Federal Reserve. Seriously, do we need him messing the Fed up too?

There are many reasons to oppose Summers as Fed chair, but the strongest objection is that Obama would be rewarding the same guys who got things disastrously wrong for the country—the Clinton-Rubin policy makers who danced to Wall Street’s tune of financial deregulation and collaborated with the Greenspan Fed and Wall Street to gut prudential regulation like the Glass-Steagall Act. Those actions set the stage for the crisis that devastated middle-class home owners and working people generally.

Summers was an over-confident cheerleader posing as superior intellect. People called him “the smartest man in the room,” and Summers definitely believed it. As Treasury secretary during Bill Clinton’s second term, Summers personally did the knife work that cut up Brooksley Born, the brave regulator earnestly trying to impose meaningful limits on the explosive derivatives market. He still owes Born—and the country—an apology.[..]

When Summers came back to Washington in 2009 as Obama’s chief economic adviser, he pushed aside rival views and once again underestimated the nature of the crisis or how to deal with it. When other Democrats called for much stronger stimulus measures, Summers was a voice for doing less, and he accepted disappointing results as the best that government could do. Obama, alas, adhered to that advice.

Let us not forget either that Summers lost his Harvard post for sexist statements questioning whether little feminine brains were suited for math and science and for his close relationship with and protection of a corrupt economics professor. Sweet jebus, that's the kind of person best qualified to set economic policy and strength for not only this country but the world?

I don't think so. Summers shouldn't be trusted with anything more influential than the dog pound.

There is, in fact, a much better candidate out there on a multitude of optics: Janet Yellin.

That could change if the heir apparent to succeed Ben Bernanke as Chair of the Federal Reserve Board, Janet Yellen, is nominated for the job by President Obama. Certainly, there is no better qualified candidate to fill Bernanke's shoes when he steps down in January. A noted economist, Yellen headed the Council of Economic Advisors for two years; led the San Francisco Federal Reserve Bank for six years; and has served ably as Bernanke's Vice Chairman since 2010. Unlike Larry Summers, Tim Geithner, and other Bob Rubin -- minions frequently mentioned in the financial press as potential Bernanke successors -- she was not part of the deregulatory cabal that got us into the 2008 financial crisis. In fact, she had a solid record as a bank regulator at the San Francisco Fed and was one of the few in the Fed system to sound the alarm on the risks of subprime mortgages in 2007.

Smart, qualified and tough on financial hijinks? Check. And not to put too fine a point on it, but think how impressive it would be to nominate the first woman to head the Fed. That's a glass ceiling that a Democratic president should be looking to do. But of course, there's a whisper campaign against her nomination, seemingly from Wall Streeters who don't like her position on regulations.

But no, unless you call your reps (especially if they're Democratic) to oppose Larry Summers, we're going to romance the same old players that have shown themselves to be so toxic in all their other relationships.

Come on, Washington, expand your dating circle already.


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