The following is an excellent article from the August 19/26, 2013 issue of The Nation written by William Greider titled “Fed Up with Summers” on page 6 and I quote: “The leaders of the Democratic Party have never come clean about their ruinous role in the economic policies that led to the financial collapse of 2008. The party’s refusal to admit blame is the real source of the intense public anger ignited by the White House suggestion that President Obama may choose Lawrence Summers to succeed Ben Bernanke as Federal Reserve chair when Bernanke’s term expires in January. Among left-labor Democrats pushed aside during Clinton and Obama years, Summers epitomizes grave error and arrogance. His appointment as Fed chair would be a signal that the financial interests led by Robert Rubin, Clinton’s first treasury secretary, intend to maintain their control over the party, never mind the destructive policies they engineered in the past—gutting the middle class with financial deregulation and job-killing trade deals.
To stop the Clinton-Rubin crowd, rank-and-file constituents must sound the alarm, and Democratic senators must promise, loud an clear, to vote against Summers if Obama once again follows that crowd’s lead. The former Harvard president was himself a Wall Street player between his government positions, and he was known to be banker-friendly as Obama’s first-term adviser. Choosing Summers for the Fed would be another great gift to the mega-banks.
Summer’s reputation was (and is) that of a bully in policy fights. Some people called him “the smartest man in the room,” and he believed it. As treasury secretary during Bill Clinton’s second term, Summers personally did the knife work that cut up Brooksley Born, the brave chair of the Commodity Futures Trading Commission who fought to impose limits on the explosive derivatives market. He still owes Born—and the country—an apology.
When Summers returned to Washington in 2009 as Obama’s chief economic adviser, he pushed aside rival views, underestimating both the depth of the crisis and how to deal with it. When advisers like Christina Romer called for much stronger stimulus measures, Summers urged doing less, and he accepted disappointing results as the best that government could do. Obama adhered to that advice. Summers was wrong on the big questions and, alas, so was Obama.
More recently, Summers has been trying to rewrite his reputation as he campaigns openly for the Fed appointment. The Washington Post offered him a prime pulpit for a series of op-ed columns in which he’s made himself sound like a bleeding-heart liberal. Don’t be misled. Those who dig into his old speeches and pronouncements will find rich material to make the case for rejecting him. The question is not about left or right policy decisions. It’s about competence.
The best reason to put Summers out to pasture is that Obama has a far better choice available: a more experienced central banker and moderately liberal economist named Janet Yellen. Now vice chair of the Federal Reserve Board in Washington, Yellen has been a close ally of Bernanke and a stong voice for fighting unemployment and other structural weaknesses in the economy. She served as president of the San Francisco Federal Reserve Bank, and before that served a term as a governor of the Fed before Obama appointed her as vice chair. Her record is stellar: a recent Wall Street Journal survey of forecasting by all the top Federal Reserve officials between 2009 and 2012 found that Yellen is the most accurate of all.
It doesn’t hurt that Yellen would be the first woman to serve as Fed chair. It’s about time: this year is the 100th anniversary of the central bank, and the stolid masculinity of this cloistered institution has failed the country spectacularly. It needs to be ventilated by public debate. Choosing Yellen would be a fitting rebuke to Summers, whose bigotry got him bounced as president of Harvard after he made derogatory remarks about women as scientists and dissed black professors as inadequate scholars.
The Federal Reserve’s reputation was gravely diminished by its failure to foresee the financial collapse and again by the bailouts. People don’t trust the central bank, for good reason: they could see with their own eyes that the Fed spent trillions to rescue the mega-banks while leaving others to drown. The Fed’s incestuous relationship with these banks demands fundamental reform.
Obama should ask himself which candidate would be most likely to restore public trust in the Fed—the glib talker from the old boys’ club, or the experienced woman ready to make history?”
(WILLIAM GREIDER WROTE A GREAT ARTICLE AND PUTTING LARRY SUMMERS IN AS FED CHM WOULD BE THE LAST STRAW IN PRESIDENT OBAMA’S TERM THAT HE DIDN’T LEARN ANYTHING AS HE WENT ALONG AS PRESIDENT. ABSOLUTELY, POSITIVELY OPPOSITE OF WHAT FRANKLIN ROOSEVELT DID WHEN HE WAS PRESIDENT AND CLOSED THE BANKS DOWN BECAUSE HE KNEW THEY WERE THE CAUSE OF THE DEPRESSION. THEN HE ESTABLISHED THE GLASS-STEAGALL ACT, SEPARATING THE COMMERCIAL BANKS FROM THE INESTMENT BANKS AND THE STOCK MARKET, TO MAKE SURE WE NEVER BAIL OUT PRIVATE EQUITY OR HEDGE FUNDS AGAIN. THERE’S ABSOLUTELY NO REASON WHY ANY PRIVATE INDUSTRY, SUCH AS THESE SHOULD EVER BE BAILED OUT BY THE GOVERNMENT (ALIAS TAXPAYERS). IF THE INDUSTRY ISN’T MAKING IT, THEY HAVE A SALE OR GO BANKRUPT. YOU DON’T PROP THEM UP AND GIVE THEM GRANTS IF THEY DON’T KNOW WHAT THERE’RE DOING, WHICH IS WHAT THE FEDERAL RESERVE IS CURRENTLY DOING. .I’M GOING TO DETAIL ON MY BLOG SITE (THE NATION BUILDERS AND WORDPRESS, WHICH YOU CAN ACCESS BY GOOGLING MY NAME) IN SOME ARTICLE JUST EXACTLY WHAT TPRESIDENT ROOSEVELT DID FROM THE BOOK “F*D*R: A BIOGRAPHY” BY TED MORGAN. I BELIEVE THAT THE NATION SHOULD HAVE LET ME ACCESS THIS ARTICLE ONLINE FROM THEIR WEBSITE. IT WOULD CREATE MORE CIRCULATION FOR THEIR OWN MAGAZINE WHICH IS A GREAT SOURCE OF INFORMATION.
LaVern Isely, Overtaxed Independent Middle Class Taxpayer & Public Citizen & AARP Members