If President Obama picks Larry Summers as the next chairman of the Federal Reserve, as he is considering, the president and his advisers should communicate a very compelling case explaining why they chose someone with such obvious negatives and passed over a qualified, history-making alternative.
To say Summers has detractors would understate the case. His tenure as president at Harvard was defined by his clashes with faculty, including criticizing then-Harvard professor Cornell West for working on non-academic projects, such as advising Al Sharpton’s presidential campaign, as the Huffington Post reported recently. Summers drew national scorn for his suggestion that “innate” differences between men and women could in part explain the shortage of elite female scientists.
After stepping down as president of the university, Summers became a key, trusted adviser to Obama during the 2008 campaign. But even some of his former colleagues in the administration argue Summers misunderstood the depth of the recession in 2008-09, not pushing for a larger stimulus bill that would have further reduced unemployment. And his critics say that Summers has never accepted responsibility for that recommendation, leaving the non-partisan Washington magazine National Journal to write this week, “Does Larry Summers Have Integrity?”
In what amounted to a vote of no confidence in Summers, a bloc of 19 Democratic senators, including leading progressive voices like Mass Sen. Elizabeth Warren and Illinois’ Richard Durbin, signed a letter recently saying they prefer Federal Reserve Vice Chair Janet Yellen for the post, even though Summers knows many of the senators personally from his service as a key adviser to both Obama and President Clinton.
In tapping Yellen, Obama would be making history in picking the first woman ever to head the Fed.
By selecting Summers, the president would manage to pick a candidate disliked by many progressives, Washington elites, women, blacks and Republicans, who have not signaled any broad support for Summers either.
“If Summers is the nominee, I sure would have a lot of questions to ask him,” Durbin told Bloomberg News, in a blunt statement from a senator who mentored Obama in the Senate and has rarely criticized him as president.
By all accounts, Obama views Summers as a strong candidate for logical reasons. In his tenure as the president’s top economic aide in 2009-2010, he was a key architect of a set of policies that helped rescue the economy from a recession. He has also served as Secretary of Treasury and is widely acknowledged as one of the leading economic thinkers of his generation.
And I don’t join those who suggest tapping Summers would somehow reinforce the idea that the president hasn’t picked enough women for important slots, or generally favors men. The selections of two female Supreme Court justices (Elana Kagan and Sonia Sotomayor) and the prominence of officials such as Valarie Jarrett, Susan Rice and Kathleen Sebelius contradict the idea that the Obama administration is a “boys club.” The circle of top aides around the president is certainly male-dominated, as a New York Times photo powerfully illustrated earlier this year, embarrassing the White House and forcing the president to defend his team’s diversity. But the chair of the Federal Reserve would not be one of the people huddled around the president at the White House, but instead wielding huge power in an independent part of the government that is much more akin to sitting on the Supreme Court than directly advising a president.
And ultimately, as the 2008 economic meltdown showed, the person running the Federal Reserve has a huge amount of decision-making power. The president should pick someone he truly trusts to manage a situation like a series of bank collapses.
And yet, this should not lead to the automatic selection of Summers. The rationale of tapping someone largely because they have more experience, as Obama would do if he picked Summers, is one of the main reasons the top levels of American government remain so lacking in racial or gender diversity. Summers experience running the Treasury Department is important, but an over-reliance on such a credential would be problematic, since no woman has ever been Secretary of Treasury. No president had ever been black until Obama himself ignored people who were casting Hillary Clinton and others as having sufficient experience in government he lacked.
By picking Summers, Obama will have not only bypassed the first strong female candidate ever to run the Federal Reserve but chosen in her place a man who questioned the innate ability of women to perform some high-level jobs. It’s hard to imagine Obama would consider appointing a person who publicly mused about the ability of blacks or Latinos to perform certain jobs as well as whites.
Obama, in a closed-door meeting with congressional Democrats, defended Summers and singled out the Huffington Post for excessive criticism of Summers. But Summers has irritated and raised questions about his judgment from even people who agree with his policy views. The president is expected to announce his nominee for the Fed chair in September, and it’s likely the Democratically-controlled Senate will confirm whomever Obama picks. But Obama should consider very carefully whether Summers’ long list of critics are somehow getting it wrong.