Larry Summers, the controversial former economic adviser to President Obama, has withdrawn his name to be the next chairman of the Federal Reserve.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