In Tuesday's New York Times, the paper's editorial board joined a group of Senate Democrats, former Fed Vice Chairman Alan Blinder, former Federal Deposit Insurance Corp. Chairwoman Sheila Bair, and, nearly, Paul Krugman (among manyotherwriters), in endorsing Federal Reserve Board Vice Chairwoman Janet Yellen to succeed Chairman Ben Bernanke, over former Treasury Secretary and Obama economic adviser Lawrence Summers. This comes a week after The Washington Post's Ezra Klein reported that the White House was leaning toward nominating Summers for the position when Bernanke's term is up.
So, why go with Yellen? Here's The Times with some basic background:
A Yale educated economist and professor emeritus at the University of California, Berkeley, she was first nominated and confirmed to the Fed board in the 1990s; from 2004 to 2010, she served as the president of the Federal Reserve Bank of San Francisco. She has been vice chairwoman since 2010, a trying time in which the Fed's largely successful efforts to steer the economy have been made all the more difficult by poor fiscal policy decisions, including the White House's premature pivot from stimulus to deficit reduction, which happened while Mr. Summers was a top adviser to Mr. Obama.
As the last line of that shows, this endorsement is as much a sweeping critique of the Obama economic team, and Summers in particular, as it is a praise of Yellen. The Times places the support for a Summers candidacy around the "proteges of Robert Rubin," the former Clinton Treasury Secretary and Citigroup head. As TheTimes puts it, this group includes former Obama Treasury Secretary Timoyhy Geithner, top economic adviser Gene Sperling, and Summers.
But the piece isn't just a send-up of the Rubin crew's policies. It's a slam on the way its memberds they have handled business (emphasis ours):
In the wake of the financial crisis and the Dodd-Frank reform law, the Fed chairmanship has only become more central to the fate of the banks and economy; as a result, they want someone who shares their background and can be counted on to further their views.
Ms. Yellen is not that person, not only, or even mainly, because of policy differences but because she is not part of the fraternity. Indeed, she is reminiscent of other accomplished women with whom Mr. Summers, or his supporters, or both have tangled in the past.
In 1998, Mr. Rubin and Mr. Summers opposed Brooksley Born, then the chairwoman of the Commodity Futures Trading Commission, for correctly calling for the regulation of derivatives; in 2009, Mr. Summers squelched the sound recommendation of Christina Romer, then an economic adviser to Mr. Obama, for a larger stimulus. In the first Obama term, Mr. Geithner clashed unhelpfully with Sheila Bair, then the chairwoman of the Federal Deposit Insurance Corporation, and with Elizabeth Warren, then the chairwoman of the Congressional panel overseeing the bailouts.
In comparing Yellen to these other women who have had difficulties with the Obama administration (and, before that, Rubin), The New York Times stops just short of of saying the administration has, since its earliest days, had a gender problem. The Times' editorial board isn't at all the first to make this argument, but as the newspaper of record, its critique carries some real weight. How the Obama administration reacts, and if the White House at least decides it needs to squash the perception of sexism remains to be seen.
We may have to wait a while for an answer. According to reports from Bloomberg, Obama is not expected to make a decision for several weeks. So just expect this debate to get louder between now and September.
- Politics & Government
- Lawrence Summers
- Janet Yellen
- the White House