A few last words about Lawrence Summers and the Federal Reserve Board:
Although the White House was already moving to reframe the choice, it may have been a magazine story that precipitated the end of Summers’s candacy. Felix Salmon, the finance blogger at Reuters, wrote:
Michael Hirsh’s anti-Summers National Journal cover story landed on the desks of everybody who matters in Washington at the end of the week, and it had its intended effect: no matter how much the White House wanted Summers to get the job, those pesky Constitutional checks and balances would conspire to ensure that it would never be his.
Hirsh’s aptly-titled The Comprehensive Case against Larry Summers touched all the bases, including the Harvard Russia scandal. (“Of course he’s brilliant. But he also displays all the attributes — arrogance, bullying, stubbornness — that you don’t want at the head of the Fed.”)
By the end of the day, Sen Jeff Merkley (D-Oregon) phoned the White House to say that as many as five Democrats were prepared to vote against Summers on the 22-member Senate Banking Committee, according to Annie Lowrey of The New York Times. Last Sunday the candidate withdrew from consideration.
The episode is damaging to Obama’s presidency. It is too soon to judge how much harm has been done. Now that Congress has been told to expect Janet Yellen to be the nominee, the debate can turn back to more important matters.
Summers will remain at Harvard, and his opinion will continue to be sought, like that of his mentor, Martin S. Feldstein, another one-time aspirant to the Fed’s top job.
Economic Principals will return to normal next week. But will Washington?