Larry Summers Withdraws Name for Federal Reserve Chairman

This could leave the door open for the first female Fed chair.

Summers pondering his resignation.
National Journal
Matt Vasilogambros
Sept. 15, 2013, 1:23 p.m.

Larry Sum­mers, the con­tro­ver­sial former eco­nom­ic ad­viser to Pres­id­ent Obama, has with­drawn his name to be the next chair­man of the Fed­er­al Re­serve.

The former Treas­ury sec­ret­ary and cur­rent pres­id­ent of Har­vard has come un­der fire for his pre­vi­ous com­ments on wo­men’s in­tel­lec­tu­al abil­it­ies and his char­ac­ter and tem­pera­ment. While his re­sume and ex­per­i­ence may have been a good fit for Fed chair­man, a deep­er look at his past would sug­gest oth­er­wise. As Na­tion­al Journ­al‘s Mi­chael Hirsh wrote on Fri­day:

But, ac­cord­ing to nu­mer­ous ac­counts from those who have worked with him, Sum­mers has of­ten dis­played the op­pos­ite at­trib­utes dur­ing his long ca­reer. Be­hind the scenes, he has used his power, com­bined with in­tel­lec­tu­al ar­rog­ance, to bully op­pon­ents in­to si­lence, even when they have been proved right. He has re­fused to al­low his dis­sent­ers a voice at the table and ad­op­ted a policy of nev­er ad­mit­ting er­rors.

In re­cent weeks, it did not look like Sum­mers had the sup­port he would need in the Sen­ate to pass a con­firm­a­tion. There was both Demo­crat­ic and Re­pub­lic­an op­pos­i­tion on the Sen­ate Bank­ing Com­mit­tee. If he were nom­in­ated and re­jec­ted, this would have been a big­ger stain on his leg­acy than simply with­draw­ing his name.

In a state­ment, Obama said he ac­cep­ted Sum­mers’s de­cision and thanked him for his ser­vice to his ad­min­is­tra­tion. He said in part:

Larry was a crit­ic­al mem­ber of my team as we faced down the worst eco­nom­ic crisis since the Great De­pres­sion, and it was in no small part be­cause of his ex­pert­ise, wis­dom, and lead­er­ship that we wrestled the eco­nomy back to growth and made the kind of pro­gress we are see­ing today. I will al­ways be grate­ful to Larry for his tire­less work and ser­vice on be­half of his coun­try, and I look for­ward to con­tinu­ing to seek his guid­ance and coun­sel in the fu­ture.

In his let­ter to Obama (ob­tained by The Wash­ing­ton Post), Sum­mers said he plans to con­tin­ue his sup­port of the ad­min­is­tra­tion’s eco­nom­ic policies:

It has been a priv­ilege to work with you since the be­gin­ning of your Ad­min­is­tra­tion as you led the na­tion through a severe re­ces­sion in­to a sus­tained eco­nom­ic re­cov­ery. This is a com­plex mo­ment in our na­tion­al life. I have re­luct­antly con­cluded that any pos­sible con­firm­a­tion pro­cess for me would be ac­ri­mo­ni­ous and would not serve the in­terest of the Fed­er­al Re­serve, the Ad­min­is­tra­tion, or ul­ti­mately, the in­terests of the na­tion’s on­go­ing eco­nom­ic re­cov­ery.

Some pro­gress­ive groups cel­eb­rated Sum­mers’s with­draw­al. Adam Green, a cofounder of Pro­gress­ive Change Cam­paign Com­mit­tee, said Sum­mers “would have been an aw­ful Fed Chair.”

“Pres­id­ent Obama should ap­point someone to lead the Fed who has not ac­cep­ted mil­lions in pay­ments from Wall Street, and who will pri­or­it­ize an eco­nomy that works for the little guy above fur­ther en­rich­ment for the big guy,” Green said in a state­ment.

Cur­rent Chair­man Ben Bernanke’s term ends on Jan. 1. With Sum­mers out of the pic­ture, this could al­low the pres­id­ent to nom­in­ate the first fe­male Fed chair in Janet Yel­len. The vice chair­wo­man of the Fed is widely ad­mired and would likely get Sen­ate con­firm­a­tion.

Yel­len is not a guar­an­teed pick, says Carl To­bi­as, a nom­in­a­tions ex­pert from the Uni­versity of Rich­mond. While she is a clear front-run­ner, former Fed Vice Chair­man Don­ald Kohn has also been floated as a pos­sible re­place­ment for Bernanke.

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