Why Not Yellen?
“Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today.”
--President Obama yesterday, drinking the Kool-Aid on Larry Summers
I was happy to see Larry Summers withdraw his name from consideration yesterday for chairmanship of the Federal Reserve, yet this sad episode of the Obama administration tells you enough troubling things to make you wish for 2016 to get here quickly.
From most accounts, this president decided that the two best people to succeed Ben Bernanke were Tim Geithner and Larry Summers. Think about that for a moment, and then focus on the incredibly poor judgement behind such decision making. Geithner was in the middle of the meltdown last decade, and then as Treasury Secretary ensured that Wall Street got what it wanted in the bailout while homeowners got ignored. For his part, Larry Summers has his fingerprints all over the crime scene that was the 2007-2008 meltdown, and made the fateful decision to eliminate an option for a large stimulus package from the president-elect's range of choices, thereby giving us this pathetic economic record and "growth" Obama incredibly touts today.
It's bad enough Obama wanted two of his "boys" for Bernanke's job, even though Summers has clearly established why he shouldn't be considered. It is even worse that he can't seem to work up even an elevated heartbeat for someone as well-qualified as Janet Yellen, you know, a woman. Obama wanted Summers so badly instead of Yellen that he was ready to ask Republicans to vote for her, naively thinking he could do so for free, instead of seeing the writing on the wall from fellow Democrats and simply going with Yellen even with all her support from across the spectrum.
Lastly, Obama's selection here if confirmed extends well into the next president's term. Don't assume for a moment that Hillary Clinton would have been more comfortable with Larry Summers than Yellen.