The touted alternatives of Janet Yellen and Larry Sommers to replace Ben Bernanke as Chairperson of the Federal Reserve was a choice between Useless Moron A and Useless Moron B. Even if something about Yellen’s past was admirable, that is no more likely to mean anything about her potential at the Fed than John Kerry’s opposition to Viet Nam meant anything about his work now as Secretary of State. You don’t get office unless you sell out. If Yellen called the housing bust, that could have helped in 2005, but not in 2013.
But because of Larry Summers on-record history of enabling corruption, and his contribution to the meltdown of 2008, Leftists opposed him. They are claiming that his resignation from consideration for the next Federal Reserve Chairperson shows they have clout with the White House. Fox News ran the headline, “Left Claims Summer’s Scalp: Who’s Next?” And the Wall Street Journal posted a story that began:
“Chest-thumping by liberals after Lawrence Summers‘s decision to withdraw from consideration as the next chairman of the Federal Reserve could have broad implications, not just on the central bank but also for how Democrats maneuver during looming budget fights. A number of Democrats and liberals quickly called Mr. Summers’s move a victory for their cause, and they tried to leverage the decision to pressure President Barack Obama to nominate Fed vice chairman Janet Yellen to the post.”
This is a head fake.
Larry Summers was “Chief Economist” for the World Bank in the early nineties and then moved into the Clinton Administration to eventually be appointed as the Secretary of the Treasury. In other words, he is a liberal’s liberal. There was no way he was going to get much Republican support. He was bound to get GOP opposition.
Having more important things to worry about, Republicans have not jumped into the debate about potential nominees for the office of Federal Reserve Chair. It made sense for them to wait and deal with the person whom Obama actually nominates.
But the Liberal boasting in their “power” to get Summers to withdraw his name as a possibility is laughable. They only have that power because they knew Republicans were also opposed to him.
Both Left and Right have good reasons to despise Larry Summers history of misdeeds.
“As Treasury Secretary [for Bill Clinton], he helped to pass the Commodity Futures Modernization Act. This turned derivatives into a unique financial instrument with no oversight, reserve requirements, mandated disclosures, or listing minimums. The CFMA all but guaranteed that Derivatives would eventually implode. Summers further contributed to the crisis by Summers by overseeing the repeal of Glass Steagall. With this firebreak between Wall Street and Main Street effectively removed, the financial conflagration of 2008 spread from Wall Street to every corner of the economy.”
Of course, none of this means that Janet Yellen can do any better as Federal Reserve Chairman. This is all political theater aimed at making us think something significant is going on. The Leftist boasting about their power is all false.
Until the Federal Reserve is pulled, like a swollen tick, from the body politic of the US, and commodity currencies are decriminalized, no significant improvement in the Federal Reserve is even possible.