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Tuesday, July 23, 2013

Larry Summers is the Front-Runner? WTF?

In case you missed the news:

Right now, Larry Summers is the front-runner for Fed chair by Ezra Klein: The word among Federal Reserve watchers right now is that the choice is down to Janet Yellen or Larry Summers as Ben Bernanke’s replacement. ...
People dismissed Summers’s chances a month or two ago, but he’s increasingly viewed as the leading candidate today — and opinions on this, for reasons I don’t fully understand..., have really hardened in the last 72 hours. So after conversations with plugged-in sources both inside and outside the process, here’s what’s behind the changing odds:
1) President Obama really likes Summers. ...
3) This White House, more so than any other in modern memory, knows in its bones that the economy can fall apart at any second. ... This White House is very comfortable with how Summers handles a crisis.
4) There’s also a feeling that the chair of the Federal Reserve can do more if he or she is truly trusted by markets. Rightly or wrongly, there’s a sense that Summers has the market’s trust in a way Yellen doesn’t.
5) 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...
That’s not to say Summers is anywhere near a sure thing. ...
Against all that, the conventional wisdom — which I fully bought into — a month or two ago was that Summers had little real chance. The politics of it just didn’t make sense. ...

The politics of it still doesn't make any sense, and Yellen is more qualified for the job (and the suggestion that a woman can't handle a crisis as well as a man is just wrong -- as I see it, Summers is as likely to create problems as solve them; plus, his record on financial regulation is anything but stellar).

I'm very much in the Yellen camp.

    Posted by on Tuesday, July 23, 2013 at 02:18 PM in Economics, Monetary Policy | Permalink  Comments (128)


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