Summers withdraws from Fed race – FT.com

White House portrait of Lawrence Summers.

White House portrait of Lawrence Summers. (Photo credit: Wikipedia)

This is an amazing, MUST-READ story in the FT. Check it out!

Summers withdraws from Fed race – FT.com.

Larry Summers is a brilliant economist but as a practitioner he has made enemies. The left blame him for deregulation under the Clinton administration which paved the way for the banking crisis of 2008. Meanwhile, the right are critical of him in the early days of the Obama administration when he guided towards major stimulus of the economy.

Many prominent economists, like Nobel prize-winning Joe Stiglitz publicly favored Janet Yellon over Larry Summers. However, the tipping point was when a number of very powerful Democrat senators announced they would oppose Summers’ nomination for the chairmanship of the Fed. Others will cite Summers’ personality as not being suitable for the consensus building role at the Fed.

At another level, this story will be damaging for President Obama who had intimated that Summers was his preferred candidate for the Fed role. It will be seen as a sign of weakness that Obama could not get his way.

Personally, I have always felt that Janet Yellon is supremely qualified to take over as the chair of the Fed, probably one of the most powerful positions in the World.

Any views?

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6 responses

  1. Pingback: Janet Yellen: The cheery economist tipped to be the first lady at the Fed – FT.com « Dr Alf's Blog

  2. Pingback: The lesson from Summers’ exit – editorial – FT.com « Dr Alf's Blog

  3. Pingback: Why I think that Summers was right to withdraw from the Fed race – John Gelmini « Dr Alf's Blog

  4. Larry Summers should go back to academia or some other role to which he is better suited.

    He was the man who decided to push for the abolition of Glass Steagall which gave us sound money before the financial collapse.

    Thus Larry Summers was one of the people who helped to create the conditions under which the deliberately contrived financial and banking collapse happened.

    Bankers, “Masters of the Universe” and those in control of them were thus able to steal trillions of dollars from almost everyone in the world and transmute it into gold, gems, investment property held by impenetrable offshore entities hidden in up to 40 different tax havens. Following this $2.8 billion USD entrusted to Timothy Geithner, formerly of Goldman Sachs as “bailout money” remained unaccounted for. $2.9 trillion USD remained unaccounted for from the Pentagon budget in one year and another $1.6 trillion USD remained unaccounted for for the previous year.

    The $400 billion USD which disappeared to an undisclosed location in Israel when Lehman Brothers “went down” is still unaccounted for.

    Practically anyone, even my neighbor’s black cat “Beckham “, would be a better choice because Summers, whilst brilliant as an economist, is a theoretician and has an abrasive rather than consensual style, not suited to the requirements of this politically sensitive role.
    Whilst it is true that Summers was President Obama,s favourite choice ,this matters less and less because President Obama will be out of office on November 2016 just over 3 years from now and is effectively a lame duck.
    What does matter is who he chooses instead and in Janet Yellon there is a far more capable candidate

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