The Growing Larry Summers Backlash

Moneybox
A blog about business and economics.
July 26 2013 9:27 AM

The Growing Larry Summers Backlash

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David Lipton of the IMF (center) speaks as head of the Banque de France Christian Noyer (left) and Janet Yellen (right) listen during a 2012 seminar. Nancy Pelosi is backing Yellen to chair the Federal reserve.

Photo by TORU YAMANAKA/AFP/GettyImages

It seems to me that had Barack Obama simply named Lawrence Summers his choice to chair the Federal Reserve, there would have been plenty of grumbling from liberal Democrats but the vast majority would have lined up and figured that confirming the president's choice is better than an awkward confirmation battle. With the decision simply leaked instead, however, about one-third of the Democratic Senate caucus has now signed an anti-Summers letter. The fact that House Minority Leader Nancy Pelosi is also giving backing to Janet Yellen likewise strikes me as significant. Pelosi is generally to Obama's left, but she's also generally a team player (see her crucial role in defending the National Security Agency from a bipartisan challenge in the House), and here she is off the team.

Binyamin Appelbaum* and Annie Lowrey have a very informative article in the New York Times giving some of the larger backstory and context to the choice and while it's written in a very neutral-toned NYT kind of way, I think any feminist-inclined reader is going to read it as suggesting that there's a long-running boys' club dynamic (see Lowrey's earlier reporting on this) in Democratic Party economic policy circles that the drive for Summers is part of.

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This leaves Ezra Klein today suggesting that we might see a "dark horse" Fed candidate such as Roger Ferguson emerge since Summers' friends have now perhaps overcommitted themselves to criticisms of Yellen. While Ferguson does not have Summers' band of detractors, it seems to me that would in many ways make Obama's political problem worse. If the reason to not appoint Yellen is the unique genius of Larry Summers, then people will make up their minds based on their views of whether Summers really is a unique genius. If the reason to not appoint Yellen is that she genuinely lacks the mojo to do the job, then that obviously raises the question of why appoint her to be vice chair in the first place?

Correction, July 26, 2013: This post originally misspelled Binyamin Appelbaum's surname.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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