Larry Summers Makes a Comeback in the Fed Chair Rumor Mill
After it was starting to look like the Fed might get its first female chief in Janet Yellen, reports are emerging that Larry Summers is now the top pick to replace Ben Bernanke as Federal Reserve chief. That's Larry Summers, the former Treasury Secretary and Harvard President who insulted Cornel West so much that he left Harvard for Princeton, and who drew ire after floating the idea that the shortage of women at the top of science-based fields might be due to "innate" differences of aptitude between the sexes.
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The report, from the Washington Post's Ezra Klein, lays out a number of factors that may have boosted Summers above Yellen in recent days. First and foremost: the president really likes Summers, who has deep ties to the Clinton administration. He's also previously been a key part of Obama's economic team. And Klein isn't the only one hearing and repeating rumors of Summers's puzzling comeback in the running, after his chances at the role seemed much more remote just days ago:
A source close to this says it's "way past that." WH has all but decided on Summers. Unreal.
— Christopher Hayes (@chrislhayes) July 23, 2013
But others are still skeptical:
I'm only going to say this once: stop trying to make Larry Summers happen. He's not going to happen. http://t.co/7XeNeYUads
— Heidi N. Moore (@moorehn) July 23, 2013
According to Klein, one of Summers's biggest obstacles as a candidate for the post isn't really an issue for Obama administration insiders:
The big open question is Summers’s ability to manage the Federal Reserve’s Open Markets Committee. Here, Summers’s reputation for being difficult to work with is a big issue. But inside the White House, that reputation is considered overblown, or at least outdated — after all, they worked with him, and enjoyed working with him, and there’s some sense that maybe a more aggressive Fed chair wouldn’t be the worst thing in the world.
Meanwhile, previous reports have examined Summers's record for clues on a potential Summers Fed chair. And those reports are decidedly mixed, leaving plenty of room for skeptics on a Summers nomination. For one thing, Summers apparently had some trouble with interest rates while at Harvard, according to Bloomberg. And Quartz outlined three major reasons against a Summers Fed chair, including his role in the deregulation the preceded the financial crisis, his record on derivatives, and his hostility to warnings just before the recession.
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Bernanke, who's been the Fed chair since 2006, is expected to step down at the end of his term in January.
