The White House has just dropped a Sunday evening bombshell: Neoliberal economist Larry Summers — who President Barack Obama was on the verge of nominating to be the next Chairman of the Board of Governors of the Federal Reserve — is no longer being considered for the position, at his own request!
“Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve,” said President Barack Obama in a statement sent to NPI and other media outlets.
“Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today. I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future.”
We would greatly prefer that President Obama seek the advice and counsel of wise economists like Dean Baker, Paul Krugman, Joe Stiglitz, and Christina Romer on economic matters in the future… not Larry Summers. That aside, there’s no question that this is a hugely positive development for our country.
Larry Summers has just done what the President of the United States was unwilling to do: Recognize that he’s not the best man for the job.
The full text of his letter was as follows:
Dear Mr. President,
I am writing to withdraw my name for consideration to be Chairman of the Federal Reserve.
It has been a privilege to work with you since the beginning of your Administration as you led the nation through a severe recession into a sustained economic recovery built on the policies to promote employment and strengthen the middle class.
This is a complex moment in our national life. I have reluctantly concluded than any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.
I look forward to continuing to support your efforts to strengthen our national economy by creating a broad based prosperity and to reform our financial system so that no President ever again faces what you and your economic team faced upon taking office in 2009.
Summers apparently had the full support of the President. If he had wanted to be Fed Chair, the President was going to nominate him, never mind that his prospects of confirmation were about as far away from certain as a prospective nominee’s could be. But Summers evidently concluded that the best thing to do was to ask the President to pull his name from consideration — which is what we and many other progressives been asking the President to do for days now.
The President may not have been willing to listen to the likes of us, but he certainly listens to Larry Summers, as he made clear in the statement the White House Press Office released tonight. Summers, thankfully, realized that his nomination would have been counterproductive, distracting the Obama administration from making progress on a number of important policy fronts (like immigration).
It also could have ended in an embarrassing defeat. Summers may be arrogant, but he has a reputation for being smart. He saw the writing on the wall. Three Democrats on the Senate Banking Committee had already pledged not to support him (Jon Tester, Jeff Merkley, and Sherrod Brown). Elizabeth Warren is also said to have been a no vote, but stayed quiet out of respect for the President.
Rather than getting caught up in his own ego for a change, Larry Summers has removed himself from the picture and paved the way for President Obama to nominate a far more qualified candidate, like Fed Vice Chairwoman Janet Yellen.
And for that, we are grateful.
I don’t think there has ever been an occasion where we have thanked Larry Summers in the past, but in the wake of his decision to withdraw, we’d like to most heartily thank Larry Summers and congratulate him for his wise decision.