Larry Summers haswithdrawn his name from consideration as Fed chairman. That's good news as far as it goes, though I doubt the president is going to pick Janet Yellen -- there are too many signs suggesting that he won't.
But I'll get to that later. First, I just want to respond to this quote from Brad DeLong in The Wall Street Journal. DeLong thinks Summers is misunderstood and would have been a good choice:
J. Bradford DeLong, a Summers backer at the University of California, Berkeley, said the decision to pull his name is "not something Larry would have done were he really the guy his adversaries claim he is."Nonsense. One of the things the adversaries of Summers claim he is is a dick-swinging cock of the walk, someone who has to dominate every room he's in. A guy like that is damn well not going to allow himself to be humiliated by the U.S. Senate -- it would diminish his sense of authority. Sorry, but this is precisely what you would expect Summers to do.
So will Obama pick Janet Yellen? I doubt it. The Journal story tells us:
One leading candidate is Janet Yellen, the Fed's current vice chairwoman, who has garnered substantial support among Democrats in Congress and among economists. But the public lobbying on her behalf appears to have annoyed the president, say administration insiders, and may lead him to look elsewhere.At Business Insider, we're told this about the chances of Obama picking Yellen:
Capital Economics' Chief U.S. Economist Paul Ashworth thinks the administration may not end up doing so....I think I need to step outside. It smells like a locker room in here.
The Obama administration has shown little, if any, enthusiasm for Yellen ... so we're not convinced she will necessarily get the nod. Summers candidacy was sunk by the opposition of many Senate Democrats, which would have made it hard, if not impossible, to get his nomination confirmed. Nominating Yellen now could make Obama look weak, kowtowing to the Democrats who have been openly campaigning for her.
And DeLong worries about "the Obama administration tacking to the non-technocratic right in order to get Republican votes for confirmation."
I'm worried that Obama might pick former Fed vice chair Donald Kohn, about whom we learn this:
* James Kwak has written that Kohn was a proponent of the "Greenspan doctrine" that new financial instruments should be encouraged because they made institutions more "robust."Yikes.
* In a speech at Jackson Hole in 2005, ... Kohn cited the repeal of Glass-Steagall as an example of successfully rolling back a regulation that stifled competition: "...at times rolling back regulation--for example, by lifting the Glass-Steagall restrictions on banking organizations--will benefit competition and help the financial sector deliver services more efficiently and effectively."
So I'm not opening any champagne just because Summers is out.
Meanwhile, on a trivial note, I love the insider-y way Chuck Todd slips and calls Summers "Larry" at 0:47 of this clip:
I assume we'll never hear Chuck Todd slip and call Janet Yellen "Janet," 'cause she's not a boy.