The dog days of summer are when much of professional Washington, D.C., leaves the territory inside the Beltway. Those left behind, including journalists, try to make sense of the often nonsensical political goings on. In recent days, much of this has focused on the apparent emerging horse race to succeed Federal Reserve Chairman Ben Bernanke. His term ends in January 2014.
Earlier in the year, Vice Chair Janet Yellen was seen as the leading candidate for the top central banking post. Where things get a bit complicated is that President Barack Obama's nomination is subject to confirmation in the Senate, which is controlled by Democrats.
During a recent news vacuum in Washington, a few reports began to surface that Larry Summers, a former Treasury secretary who served both Presidents Obama and Bill Clinton, was a possible contender for Fed chairman. The reports seemed to come from sources close to the White House. In today's polarized political environment, one might have expected the most critical outcry to come initially from conservative Republicans, but that wasn't the case this time.
Obama's defense of Summers
After he visited this week with Senate Democrats behind closed doors, Obama was described by one congressman as offering a "full-throated defense" of Larry Summers. Recall that Summers served as head of the National Economic Council under Obama. As if to suggest he wasn't publicly voicing an endorsement of Summers for the Fed job, reports also indicated that Obama told House Democrats that he hasn't yet made a decision on a nominee.
Meantime, Democrats in both the House and Senate are said to be gathering signatures in support of Yellen, knowing full well that their move would be seen in opposition to Summers.
For and against
Simply put, supporters of Yellen like the fact that she's seen as more of a consensus builder and would be seen most likely continuing the policies put in place by Bernanke, at least in the interim. She would be the first female Fed chair.
Summers resigned as president of Harvard following a no-confidence vote by faculty. The departure came after his comments that women didn't have aptitude for math and science. In other words, putting Summers up against Yellen, who apparently is gifted in math, seems to be the brainchild of someone with a political tin ear. Summers' backers point to his close work with the president in the wake of the financial crisis and his awareness of financial markets.
A full field
As if to step back from the fray, Obama reportedly told congressional Democrats that the Fed appointment is not a two-person race, raising the name of former Fed vice chairman Donald Kohn as another possibility. Kohn served under former Chairman Alan Greenspan as well as under Bernanke, and is generally well-respected.
White House visitor logs indicate that Yellen has walked inside the gate of 1600 Pennsylvania Ave. just once in recent years, while Summers has been there more than a dozen times. Kohn has visited the White House a couple of times, while former Fed vice chair Roger Ferguson has visited nearly as often as Summers.
So, the trial balloons are out there and the president must make up his mind. There's no doubt that the appointment of a Fed chair is one of the most important decisions a president will make.
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