Larry Summers for the Fed? Seriously? There are better choices for Federal Reserve chair; in particular, Janet Yellen is more than qualified and would do a great job.
Ezra Klein writes, in "Right now, Larry Summers is the front-runner for Fed chair": "The word among Federal Reserve watchers right now is that the choice is down to Janet Yellen or Larry Summers as Ben Bernanke's replacement."
The White House is not actively shooting this down, and this is just an insult to American women.
There are so many objections to Larry Summers as Fed chair, including his past efforts to deregulate Wall Street (see David Dayen at Salon: "The worst track record in America on regulating banks") including the Glass-Steagall repeal, and his record of bungling things up -- especially his record at Harvard. (But don't leave out his refusal to present President Obama with Christina Romer's large-enough stimulus.)
Accusations Of Summers' Sexism
But I want to offer a special point about Summers. All the evidence says that Larry Summers seriously appears to be a sexist, which alone should disqualify him for consideration. As the UK's Independent put it several years ago, in "Summers' 'sexism' costs him top Treasury job":
For Mr Summers ... may be famous for his brilliance but is equally so for saying things he politically ought not to. Most memorable was his remark in early 2005 while serving as President of Harvard University that women may somehow be innately less able in science and maths than men are.
Accusations of sexism have followed Summers around for years. In the late 1990s Brooksley Born was head of the Commodity Futures Trading Commission [CFTC]. She tried to regulate derivative trading, but was thwarted by a gang of men -- Alan Greenspan, Robert Rubin and Larry Summers -- who worked to silence and smear her and get her out of the way. The Frontline episode "The Warning" documented how Borns' efforts were pushed aside be these men. The documentary leaves the unmistakable impression that sexism played a part in this. Stanford Magazine's April 2009 cover story on Born, "Prophet and Loss," mentions the "whiff of sexism in the pushback" Born received. A writer at Feministing, in "Is Elizabeth Warren the next Brooksley Born?," asks the question more clearly:
To get her to be quiet, they basically threw the sexist book at her. They tried to intimidate her, they yelled at her (if you were thinking that was Summers, you're right), told her she was out of her depth and didn't understand her field and that if they needed to bring in a lawyer to explain to her the role of her small regulatory agency, the CFTC , they would.
They also talked about her behind her back. In the documentary, the then-SEC Chairman Arthur Levitt says that he "was told that she was irascible, difficult, stubborn, unreasonable."
"Talking about her behind her back" with sexist accusations comes into play again in the effort to get Summers placed in the Fed, by the way. More on this in a minute.
After Summers' time in the Clinton administration, of course, came the controversy over Summers's comments about women in science when he was president of Harvard. (Never mind certain other problems he had there.) From the Harvard Crimson, Jan 2005, "Summers' Comments on Women and Science Draw Ire::
MIT biologist Nancy Hopkins '64 said she felt physically ill as a result of listening to Summers' speech at a National Bureau of Economic Research (NBER) luncheon, and she left the conference room half-way through the president's remarks.
"For him to say that 'aptitude' is the second most important reason that women don't get to the top when he leads an institution that is 50 percent women students -- that's profoundly disturbing to me," Hopkins said. "He shouldn't admit women to Harvard if he's going to announce when they come that, hey, we don't feel that you can make it to the top."
Summers eventually stepped down as president of Harvard after a no-confidence vote from the faculty and an erosion of support by the governing board.
The "sexist" complaint is not limited to Summers' Harvard years and before. Not at all.
Several years ago I had a private conversation with a woman who had been in very-high-level meetings in the Obama administration including some at the highest level. She made a very clear point that one of the reasons things happened a certain way was that in meetings Larry Summers would literally shout down women who offered a contrasting viewpoint. This was a expressed as apparently a particular problem when it came to the viewpoints of women.
Ron Suskind's book Confidence Men describes a White House environment confirming the insider's comment to me. A Washington Post story about the book, "Book: Women in Obama White House felt excluded and ignored," writes that the book:
... describes constant second-guessing by Summers, now at Harvard, who was seen by others as "imperious and heavy-handed" in his decision-making.
In an excerpt obtained by The Post, a female senior aide to President Obama called the White House a hostile environment for women.
"This place would be in court for a hostile workplace," former White House communications director Anita Dunn is quoted as saying. "Because it actually fit all of the classic legal requirements for a genuinely hostile workplace to women."
There is another possibility being floated for Fed Chair: Janet Yellen, currently Vice Chairman of the Board of Governors of the Federal Reserve. Sheila Bair explains at Fortune, in "Why Janet Yellen should succeed Ben Bernanke":
The big banks care deeply who holds these four jobs because these regulators can have a major impact on their businesses. Could there be some correlation between the exclusively male CEO suites of big Wall Street financial Institutions and the just-as-exclusively male marbled offices of big bank regulators? Testosterone-laden Wall Street usually feels more comfortable dealing with guys than gals, and over history this has been reflected in the gender of these agencies' leadership.
... That could change if the heir apparent to succeed Ben Bernanke as Chair of the Federal Reserve Board, Janet Yellen, is nominated for the job by President Obama. Certainly, there is no better qualified candidate to fill Bernanke's shoes when he steps down in January. A noted economist, Yellen headed the Council of Economic Advisors for two years; led the San Francisco Federal Reserve Bank for six years; and has served ably as Bernanke's Vice Chairman since 2010. Unlike Larry Summers, Tim Geithner, and other Bob Rubin -- minions frequently mentioned in the financial press as potential Bernanke successors -- she was not part of the deregulatory cabal that got us into the 2008 financial crisis. In fact, she had a solid record as a bank regulator at the San Francisco Fed and was one of the few in the Fed system to sound the alarm on the risks of subprime mortgages in 2007.
The Economic Policy Institute writes about Yellen's qualifications, in "Of Final Candidates, Yellen Should Be Next Fed Chair":
For one, she has been far ahead of the policymakers' curve when it comes to diagnosing macroeconomic trouble. Recently released minutes from Federal Reserve Open Market Committee meetings in December 2007 show that Yellen was nearly alone in warning that a recession was imminent -- a warning that proved correct.
For another, it's hard to imagine somebody more qualified and better-groomed for the job. She has served as Chair of the White House's Council of Economic Advisers, has had previous stints on the Fed's Board of Governors, has run the San Francisco Federal Reserve, and has been Vice-Chair of the Federal Reserve since 2010.
Most importantly, however, is that the Fed is the linchpin for financial regulation in the U.S. economy. Yellen has clearly shown that she has learned valuable lessons from the housing bubble-led Great Recession -- reversing her earlier adherence to the near-consensus view that central banks should not pre-emptively burst asset market bubbles, because the bar for meddling in (presumably efficient) financial markets should be set very high and "cleaning up" after bubbles would never be that hard. She now acknowledges that this was too facile an approach to bubbles. Changing one's position based on new facts -- particularly when it involves pushing back against powerful sectors like finance -- is admirable and sadly rare for policymakers. It should be rewarded.
Sexist Whisper Campaign Against Yellen
Yellen stands between Summers and the Fed position. Just as with Brooksley Born, another qualified, competent woman is being smeared with a sexist whisper campaign. Ezra Klein writes, in "The subtle, sexist whispering campaign against Janet Yellen," that Yellen is not a sure thing for the Fed position because:
One important reason she's not -- and I don't know another way to say this -- is sexism, as evidenced by the whispering campaign that's emerged against her.
The message isn't always delivered in a whisper, of course. In May, Federal Reserve Bank of Dallas President Richard Fisher suggested on CNBC that if Yellen is chosen, the pick will have been "driven by gender." That's more of a shouting campaign.
... In conversations with members of the Federal Reserve, the Obama administration, financial reporters and the broader monetary-policy community, I've had a surprising number of discussions that follow the same pattern: "Yellen is great," my interlocutor will say. "But ... "
The "but" is a variation on a theme. She lacks "toughness." She's short on "gravitas." Too "soft-spoken" or "passive." Some mused that she is not as aggressively brilliant or intellectually probing as other candidates -- though they hasten to say she's clearly very knowledgeable about monetary policy. Others have wondered whether she could handle the inevitable fights with Congress.
You really have to read Klein's who piece to see how this plays out. "What the complaints share is an implicit definition of leadership based on stereotypically male qualities." Amanda Marcotte writes at Slate, in "The Best Candidate for Fed Chair Is a Woman, So Why Consider Larry Summers?":
Federal Reserve Bank of Dallas President Richard Fisher complained on CNBC that picking Yellen would be "driven by gender." Oh, he admits she's qualified for the job, but hastened to add, "There are other capable people." Which seems to suggest that Obama should exhaust every male candidate before settling on a female one, a course of action that would not be "driven by gender" because men don't have a gender.
Wall Street Pushing For Summers
Even Wall Street knows about his problem with women, but is pushing for his appointment to the Fed anyway. Here is Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute (this is Wall Street, seriously, look at their Board of Trustees), pushing for Summers: "Larry Summers' Views On Women Shouldn't Disqualify Him":
It would be sad if feminists derailed Summers' possible pick as Fed chair, because unwinding the Fed's accommodative monetary policy without plunging the country into inflation takes someone with unusual brainpower. Summers has plenty.
... It may be politically incorrect to say so at a conference with female professors in attendance, but yes, there are innate biological differences between men and women.
Statements By Others
This statement by UltraViolet co-founder Shaunna Thomas is in HuffPost (UltraViolet is an online community of over 450,000 women and men who want to take collective action to expose and fight sexism in the public sector, private sector and the media):
"We are concerned by rumors that Larry Summers, a man known for his offensive and callous opinions on women, is currently being considered for Treasury Secretary. Women will not soon forget if President Obama picks Mr. Summers for such an important post, a man who believes women are somehow inherently less capable than men. It is high time to shatter the glass ceiling at the Fed and appoint a woman to a post that impacts so many women, and Janet Yellen would be a much celebrated pick."
Economist Mark Thoma, "Larry Summers is the Front-Runner? WTF?":
The politics of it still doesn't make any sense, and Yellen is more qualified for the job (and the suggestion that a woman can't handle a crisis as well as a man is just wrong -- as I see it, Summers is as likely to create problems as solve them; plus, his record on financial regulation is anything but stellar).
I'm very much in the Yellen camp.
Laura Clawson at Daily Kos, "Notorious sexist with notoriously bad judgment is reportedly top candidate for Fed chair":
Summers is famous for three things. One is being kind of a bully and a jerk. One is always being the smartest guy in the room -- yet having an astonishingly bad track record when it comes to being, y'know, anywhere in the vicinity of correct on the major issues. The third is believing that there are fewer women in science and math because innate differences between women and men -- and, no doubt coincidentally, overseeing a decline in the percentage of women among the professors receiving tenure offers during his time as president of Harvard University.
What's particularly staggering about the notion of Summers as frontrunner for Fed Chair is that there is another candidate with solid credentials and tons of experience: Janet Yellen.
So, please, why is Larry Summers being discussed for this position at all? Shouldn't the White House demonstrate that is has respect for half the population and shoot this talk down right now?