The letter and other pressure being exerted on the White House over the chairman's post have, according to The Wall Street Journal, made the president cross. The selection of the next Fed chief is in his view a crucial decision of presidential prerogative and one he apparently believes nobody should be meddling in. Thus, sources informed the Journal's reporters, there have been behind-the-scenes efforts telling the dissenters to keep their traps shut.
It's no surprise that Obama is miffed over the often acidic assessments of Summers's policy record, his abrasive personality and his sexism. Two weeks ago, he vigorously defended Summers during a private meeting with leading Democrats. Subsequently, he publicly announced that two strong choices among several he is considering are, in fact, Summers and Yellen.
The White House pushback seems to have worked, at least for now. In recent days, public critiques from the Yellen backers seem to have fallen off. Whether that's just the August recess at work or an indication that many of Summers's opponents within the party aren't up to fighting about it is anybody's guess. Top Democratic congressional leaders, including House Minority Leader Nancy Pelosi, have indicated they will support whomever the president nominates.
Before going below the fold to read more, please sign our petition requesting that President Obama not appoint Larry Summers as Federal Reserve chair, and consider instead appointing a more qualified person, such as Deputy Chair Janet Yellen.
There seems to be some confusion at the executive branch regarding the advise-and-consent role of senators in the confirmation of top officials. But then most of the dissenters signed onto the letter of support for Yellen come from the more liberal wing of the Democratic Party that has had a hard time in the past four-and-a-half years getting seriously listened to in the Obama White House. The Journal reports:
Within Mr. Obama's political coalition, Mr. Summers has powerful admirers and detractors. Former Sen. Evan Bayh, an Indiana Democrat who served on the banking committee, cited Mr. Summers' handling of economic crises as both an Obama adviser and a former Treasury Secretary under Bill Clinton.Summers worked diligently to keep Romer's views about the economic stimulus and other matters from directly reaching the president.
"With the prospect of unending legislative gridlock, this is going to be one of the primary legacy decisions of [Mr. Obama's] second term," Mr. Bayh said.
Yet others who have worked with Mr. Summers say he might not be a good fit for the position. Christina Romer, who chaired the Council of Economic Advisers in Mr. Obama's first term, said of Mr. Summers: "Larry has many strengths, but dealing with people in a respectful manner when he disagrees with them is not one of his strong suits. You can imagine that by the strength of his arguments he would be able to get people to go along with him. But there's always the possibility that he would cause some serious dysfunction."
Left, right and center, most observers say that there isn't a dime's worth of difference between Yellen and Summers when it comes to monetary policy. But when it comes to their record of predictions about where the economy was headed, Yellen swamps Summers. And when it comes to the regulatory role that the Fed will be engaged in under Dodd-Frank, Summers's history of repealing and blocking regulations during the Clinton administration does not exactly shine unless you're entrenched in the one percent.
No matter how smart Summers thinks he is, and by all accounts he is a brainy guy, he's also a toxic retread and staunch egotist who has pissed off just about everyone who he's rubbed elbows with, or rather poked his elbow into. Summers played a key role in supporting mistakes that brought about the Great Recession, sneering at and even smearing those who, for instance, argued that financial derivatives needed additional controls.
He would be a rotten choice. And the senators who seemed also to think so when they signed the letter of support for Yellen should ignore the White House staff's calls for them to cease their criticism. That criticism is a favor to the president even if he doesn't see it that way.
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