It has been fun to sit back and watch the liberal obsession with identity and gender politics intrude on the selection of the next chair of the Federal Reserve. The two leading candidates are Janet Yellen, currently at the San Francisco Fed, and Lawrence Summers, the liberal renaissance man who has been Treasury Secretary, president of Harvard, and lots of other things. Conservatives do not really have a dog in this fight and are close to indifferent: both Yellen and Summers are respected, with a slight edge perhaps going to Summers, as Yellen is seen as a monetary “dove” who is more likely than Summers to lead us into a return of ruinous inflation.
Naturally there is a vocal faction among liberals demanding that Obama must choose Yellen because she’s a woman. It also helps that Summers has a reputation for being something of a jerk. (I heard he was delighted by the portrayal of him as brusque and direct in The Social Network. And anyone who can send Cornel West packing from Harvard can’t be all bad.) Women have complained (with good reason apparently) that Obama’s economic team is an “old boys club” where women are marginalized—even very accomplished women like Christina Romer. (What was that again about a “War on Women”? Never mind.) And of course Summers was drummed out of Harvard for speaking candidly about possible differences in the number of men and women with high level ability in math.
So I wonder if it helps Summers’s chances that he’s received a ringing endorsement from Cass Sunstein?
The mission of the Federal Reserve Board is to help to increase employment, to promote economic growth and stable prices, and to protect consumers. For its next chairman, Obama has some extraordinary candidates, but no one knows more about how to carry out that mission than Larry Summers.
This might be enough to get Glenn Beck to back Yellen. The environmental left has long disliked Summers from a single comment he made more than 20 years ago. The infamous “Summers memo” written while he was chief economist at the World Bank even has its own Wikipedia entry. Here’s the beginning of the offending passage:
‘Dirty’ Industries: Just between you and me, shouldn’t the World Bank be encouraging MORE migration of the dirty industries to the LDCs [Least Developed Countries]? I can think of three reasons. . .
Worse, in 2008 Summers attached the following comment to a report on climate change policy:
[T]he costs of addressing climate change are highly uncertain, but I remain concerned that many policymakers do not sufficiently appreciate how large these uncertainties are or the consequences of paying them insufficient attention. Environmental certainty enjoys much attention while uncertainty over the cost of cutting emissions receives too little. This balance is wrong, particularly in the short term, since emissions in any given year matter little, while high costs, even for a short period, can cause substantial economic harm, particularly to the most vulnerable.
The left also dislikes Cass Sunstein, because he’s said nice things about cost-benefit analysis, and, believe it or not, actually put the brakes on some proposed regulations from the regulation-happy Obama Administration in his first-term post as head of the Office of Independent Regulatory Analysis (OIRA) in the OMB. So does Sunstein’s support really help Summers? Some lefties are already saying that Sunstein’s column is one more reason to support Yellen.
I expect one more strike will kill off Summers chances. If someone finds out he’s said nice things about the Keystone XL pipeline, it will all be over.
Here’s the Daily Kos’s subtle cheat sheet for lefties: