Inside This Week’s Cover Story

National Journal
Sept. 12, 2013, 5 a.m.

Lawrence Henry Sum­mers is one of the world’s most em­in­ent eco­nom­ists. He won the John Bates Clark Medal giv­en every two years to the na­tion’s best eco­nom­ist un­der 40 — an award so com­pet­it­ive that some eco­nom­ists say it’s as pres­ti­gi­ous as a No­bel Prize. His fel­low eco­nom­ists cite his work even more fre­quently than that of Fed­er­al Re­serve Board Chair­man Ben Bernanke. Sum­mers also has more ex­per­i­ence than any seni­or U.S. of­fi­cial in memory, in­clud­ing Bernanke, in deal­ing with the fin­an­cial crises that have be­come the reg­u­lar re­spons­ib­il­ity of Fed chair­men since the Great De­pres­sion. He star­ted in the Re­agan ad­min­is­tra­tion, when he was seni­or staff eco­nom­ist on the Coun­cil of Eco­nom­ic Ad­visers, then moved on to be­come Treas­ury sec­ret­ary un­der Pres­id­ent Clin­ton, and, fi­nally, Pres­id­ent Obama’s chief eco­nom­ic ad­viser in the middle of the worst fin­an­cial crisis since the 1930s. Sum­mers holds mostly middle-of-the-road but pro­foundly in­formed views on fin­ance that make him fairly un­con­tro­ver­sial as a pro­spect­ive stew­ard of the Fed’s man­date, which is to con­trol in­fla­tion, re­duce un­em­ploy­ment, and guide eco­nom­ic growth. 

So, on pa­per, Sum­mers is a su­perb can­did­ate to suc­ceed Bernanke in a post that the bril­liant 58-year-old Har­vard pro­fess­or has pined for since his earli­est days in Wash­ing­ton, ac­cord­ing to long­time as­so­ci­ates. Obama is re­portedly fond enough of Sum­mers that he may name him in the next few weeks, passing on a chance to ap­point Janet Yel­len, the widely ad­mired cur­rent vice chair­wo­man, who is said to be the oth­er ma­jor con­tender, as the first fe­male Fed chief in his­tory.

And yet Sum­mers is a very risky choice for chair­man — far ris­ki­er than Yel­len, who would un­doubtedly win over­whelm­ing con­firm­a­tion and was re­cently rated the Fed’s most ac­cur­ate fore­caster since 2009 on is­sues from growth to jobs to in­fla­tion. 

In this week’s cov­er story, Na­tion­al Journ­al‘s Mi­chael Hirsh makes the case against Larry Sum­mers. 

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