July 24, 2013
Larry Summers for Fed Chair?
Ezra Klein thinks it's all but a done deal that former Obama economic advisor and president of Harvard Larry Summers will be the next Chairman of the Federal Reserve. Klein's reasoning is that Obama knows Summers well and that this counts more than the consensus building that Summers is lousy at but his chief rival, Vice Chairman Janet Yellen excels. Others are unconvinced but Klein lays out a case for Summers: 1) President Obama really likes Summers. And he's surrounded by Summers's longtime colleagues and friends. Conversely, Obama doesn't really know Yellen, and nor do any of the White House's economic principals. 2) The Obama administration's top concern is choosing someone who cares about the Federal Reserve's mandate to maintain full employment as well as its mandate to keep inflation low. Yellen and Summers are both seen as clearing that bar. So the choice is defaulting to other considerations. 3) This White House, more so than any other in modern memory, knows in...(Read Full Post)