Dont walk run to read Liz McDonald’s overview, The Case Against Larry Summers

“Although Bernanke is winning kudos and praise for making brilliant moves to save the US economy, chatter on the cocktail party circuit in Washington, DC is that Bernanke may not get asked back as the world’s most powerful central banker when his term expires in January 2010, due to a variety of reasons…

Word is that instead President Barack Obama may tap Lawrence Summers, director of the National Economic Council and former Treasury Secretary, as the next Federal Reserve chairman. Besides Summers, other potential options include San Francisco Fed president Janet Yellen, and former Fed vice chairmen Roger Ferguson and Alan Blinder.

But would Summers be the best choice to replace Bernanke as chairman of the US Federal Reserve?

Dig deeper into Summers’ background, and you’ll not only see that Summers is potentially so radioactive that the White House may not decide to put him up as a replacement for Bernanke, but why it did not even deign to choose him to be US Treasury secretary, picking Timothy Geithner instead, as Summers may not have survived a Congressional confirmation hearing.

About time some else noticed how unqualified Summers is for the job . . .

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Source:
The Case Against Larry Summers
Elizabeth MacDonald
EMAC’s Stock Watch, July 20, 2009 12:43PM

http://emac.blogs.foxbusiness.com/2009/07/20/the-case-against-larry-summers/

Previously:
Dear Lord, Anyone but Lawrence Summers . . .  (July 8th, 2009)  

http://www.ritholtz.com/blog/2009/07/dear-lord-anyone-but-lawrence-summers/

Volcker: We Need Radical Regulatory Reforms (June 25, 2009)

http://www.ritholtz.com/blog/2009/06/volcker-we-need-radical-regulatory-reforms/

Obama Reform Plan Fails to Fix Whats Broken (June 18th, 2009)

http://www.ritholtz.com/blog/2009/06/obama-reform-plan-fails-to-fix-whats-broken/

Category: Bailouts, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

26 Responses to “The Case Against Larry Summers”

  1. DeDude says:

    “Arrogant idiots” are people who are so convinced of their own superior intellect that they do not think they need to ask others of their opinions or to hear alternatives to their own ideas or “solutions”. Not only are they so convinced of their own superiority that they close out alternatives, they are also convinced that others must realize their superiority so they do not think they need to waste time arguing against alternatives, they simply give a condensenting smile or say: “I am right, they are wrong”.

    Arrogant idiots are some of the most dangerous people in the world, because when they get it wrong they get it spectacularly wrong. They should never be given power to decide anything of importance. Instead they need to be placed on boards and commissions where they can yell at other arrogant idiots, and provide ideas for “confident competents” who knows how to develop multiple alternatives and use facts to choose the right one.

    Larry is an arrogant idiot, that is why he failed at Harvard. He should never be given the kind of power that the Fed chairman has.

  2. Sure, but who SHOULD be the next Fed chairman? Your blog is popular enough that if you endorsed someone, it might actually mean something. Personally, I would endorse Blinder, but I suspect it will be Yellen.

  3. Jarvis says:

    Check out the article in Vanity Fair. Summers went to Harvard and convinced them to embark on the most aggressive spending of their endowment in its 300 year history right before the ednowment tanked. In a recent interview the Financial Times (July 10, 2009) he says essentially that he is helping Obama ignore the problems with the econony to focus on his long term agenda. God forbid that he should become head of the Fed.

  4. patient renter says:

    I couldn’t pick a bigger group of losers if I tried. Here’s a fun quote from SF Fed President Janet Yellen:

    “Typically, recessions occur when monetary policy is tightened to subdue the inflationary pressures that emerge during a boom. This time, the cause was the eruption of a severe financial crisis.”

    I wouldn’t trust a person with this comprehension of cause and effect to clean my toilet, let alone manage the nation’s money supply.

  5. “Although Bernanke is winning kudos and praise for making brilliant moves to save the US economy, chatter on the cocktail party circuit in Washington, DC is that Bernanke may not get asked back as the world’s most powerful central banker when his term expires in January 2010, due to a variety of reasons…

    Bernanke is not qualified for another term. I wish more people would realize that. I love how CNBC hails “B-52″ Ben as a hero when he is nothing of the sort. He was one of the people that helped set the world aflame.

  6. Onlooker from Troy says:

    Blinder is just another staunch Keynsian, willing, able and wanting to shell out more money.

    No way.

  7. matt says:

    If Summers gets into that chair, I’m going to leave the United States :D

  8. kn says:

    ferguson would be an interesting choice. after a brief stint at swiss re, where he loaded the firm’s balance sheets with what turned out to be bad assets, he is now at tiaa-cref. maybe the bad assets are following him? to be the fed chairman would be really a bad joke.

  9. quiddity says:

    patient renter: Get this …

    Janet Yelen of the Federal Reserve Bank of San Francisco (in her October 2007 speech at the Omni hotel in Los Angeles, printed in the Winter 2007 edition of the Town Hall Journal – not affiliated with townhall.com) said:

    Here in California, the rise and fall of house prices has been a lot like the nation’s, only more so. In 2004 and 2005, many homeowners gleeflully watched the meter tick up and up on their house values. I know I did.

  10. Ironworker229 says:

    Given his personality, couldn’t Summers be considered a net positive in that his arrogance/abrasiveness in that position could tend to piss off congress to the point that they might actually consider taking their oversight responsibilities more seriously (that is to say “at all”)? Not to mention the likelihood that he would politicize the Fed to a greater degree than even now, bringing it more into the public view. Painful, I know, but nothing about this process isn’t.
    It would certainly make for some entertaining congressional hearings.

  11. shakazulu says:

    Aren’t we going to hearing from Ms. Yellen next week? At this point I would back Tim Sykes to head the Fed (yes, call me crazy but he did turn his Bar Mitzva $ into millions and the man could probably spot and deal with ponzi scheme economics effectively, all while playing the part of a cool breezer which I’m sure the current administartion might even approve of). What about Soros?

  12. if you think it matters, Who the FedRes Head is, start using your Head, and try Thinking, “For a Change”..

  13. Clem Stone says:

    What about Larry Kudlow? He seems like a true American, whatever that is .

  14. JRobie says:

    I hope Mr Obama has been keeping Volcker around for the Fed Chairman appointment.

    It’s the only reason I can think of PV hasn’t taken a walk so far.

  15. Stuart says:

    Ron Paul for Secretary of the Treasury.

  16. super_trooper says:

    @Stuart, good luck with that. As a MD wouldn’t be be more qualified to be a surgeon general?

  17. JRobie:
    I doubt he’d want that responsibility. I nominate BR. Or Roubini. Or Stiglitz. I am sure all three would do a bang up job. I can only imagine if BR got the job. Imagine the CNBC interviews with Maria Bartiromo. He’d cut her down to size quick.

  18. Urkel says:

    I like Stiglitz. From what I can tell he has been pretty dead-on throughout the crisis.

    Volcker is great too but I just feel that he could, God forbid, keel over at any time…

  19. super_trooper says:

    @CJ13thA if BR got the job, we’ld all be fcuked.

  20. Stuart says:

    @super_trooper, am only partially facetious as he is one of the few that understands what money is and the role of the Treasury in safeguarding it. A more mainstream would be Joe Stiglitz. I’d also like to see William Black in there with a prominent role.

  21. JoWriter says:

    I agree with the negative comments on Yellen. Not that I know anything about her, but I’ve read the publications put out by the SF Fed and I can assure you the articles make as much sense as her comments quoted by posters above. The Kansas City Fed publications are similar.

    The St. Louis Fed puts out great publications and has done so since I attended Michigan State some, uh, 30 years ago, when the beloved professor Walter Adams taught my Econ Class. So, their past president, William Poole, I think, would be good. Don’t know the new guy’s work yet.

    Also, I’ve heard the Dallas Fed is good. Paul Volcker would be great and he probably has enough IQ and years left to set things right.

  22. flipspiceland says:

    One advantage Summers has: He is Goldman Sucks handpicked choice.

    And no one in ‘government’ disobeys “Shorty Blankfein” and his chosen.

  23. VR says:

    Blinder would be my top choice, but I’m not as negative on Yellen as some. I’d take Bernanke over Summers or Yellen, though.

  24. gordo365 says:

    Yellen? I read a paper by Yellen a few years ago outlining why the dollar would continue to be strong – that was published about the time the dollar started it’s decline. Not impressed.

  25. Jeffrey says:

    Blinder. I believe that he chose not to stay on because of Greenspan’s policies. Summers needs to be retired from public life. He’s far to steeped in Wall Street to be any use to the country. Obama made a horrible mistake choosing him as his chief economic adviser.

  26. Jeffrey says:

    Onlooker from Troy Says: July 20th, 2009 at 5:13 pm Blinder is just another staunch Keynsian, willing, able and wanting to shell out more money. No way.

    While he may be a Keynsian, that doesn’t mean he favors bailing out failed banks choking on their own bad investments.