Home / General / Summers Withdraws

Summers Withdraws


Wow. I have to give him credit for recognizing what Obama apparently wouldn’t.

And, of course, a great deal of credit has to go to the Democratic senators who made the choice too politically costly. Now one has to hope that Obama will do the right thing and nominate Yellen rather than spitefully picking a white guy worse than Summers (such as Donald Kohn.)

UPDATE: The no-brainer case for Yellen.

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  • DrDick

    This is a very good turn of events. I just wish I had any real confidence that Obama will do the right thing and nominate Yellen, but his resistance to doing so so far indicates he will pick someone just as repellent as Summers (Timothy Geithner, perhaps?).

    • Barry Freed

      Yes, and I thank the FSM for it.

  • joe from Lowell

    Breaking news: bullshit rumor bullshit.

    Up next: our latest scoop from our inside sources.

    • What’s your point? If Summers wasn’t going to be the guy why all the hand-wringing from people like DeLong?

      • joe from Lowell

        My point? That the rumors about Fed Chair Summers being a done deal were every bit as reliable as the rumors about Secretary of the Treasury Erskine Bowles being a done deal.

        Don’t ask me to explain Brad DeLong. Maybe he was wrong. Maybe he was doing it for effect.

        • I don’t know. Were the rumors about Susan Rice for State not real because her candidacy was withdrawn?

          I will give you this. Nobody ever really knows. That’s the whole point of floating trial balloons– that you can always deny you were intending to do it. But it sure looked like Summers and his friends were at the very least campaigning for the job and that elements of the Obama administration were promoting him as the logical choice. What that means? Who knows?

          • joe from Lowell

            Were the rumors about Susan Rice for State not real because her candidacy was withdrawn?

            Top line answer: I don’t know. I completely agree with you that no one really knows. I think the people who claim that they did know were bullshitting. If anyone holds forth on how they knew all along it wasn’t going to be Summers, they’ll be bullshitting, too.

            This is my point: not that Summers was never a serious candidate for the job, just that the people confidently holding forth about how certain they were he was the first choice were just spouting hot air. It might have been Summers, it might have been Yellen, and none of the speculation was built on anything but bull.

            I also agree very much that Summers was campaigning hard, and that there certainly people in the administration who were pushing him. (I’m sure there are people in the administration who’ve been pushing Yellen, too.) I suspect that stories like the Ezra Klein “my insider sources say” column, or the recent Nikei story, were lobbying efforts from his supporters, not straight info leaks about what was actually happening.

            Second line answer: I’ve thought for a long time that Rice was just bait to catch the inevitable Republican flak, and Kerry was the first choice all along. He just missed out for Clinton in 2008, and spent the first term as the presumptive next nominee, taking on the type of really ugly jobs (like point person to the Pakistani government) that someone does to when they are expecting a reward. Susan Rice’s name emerged only late in the term, and only after she was already the Benghazi Bogeyman. But that’s my own weird little theory, and it’s specific to the 2013 Secretary of State nomination, not a general model for how the administration operates, and not an analogy to the Fed Chair case.

            • To me, this looks like Obama decided against Summers, and this is the best way for everyone involved to save face.

              • Warren Terra

                This certainly seems more plausible than Summers thinking he doesn’t want the job, or even than Summers thinking the hassle of a tumultuous confirmation battle isn’t worth the job.

                Of course, even if we assume it wasn’t Summers who decided the job wasn’t going to Summers, we may never know when the decision was made, and whether at one time Obama indeed wanted Summers to get the job. The outcry against Summers does seem likely to have had an effect on the outcome, though.

                • Those are certainly possible, but from what we know about Summers, I doubt he’d withdraw if there was any chance of being picked. I don’t think he would have faced anything more than token opposition from Congress.

                  If I had to guess, I’d say that Obama decided he’d rather not pick any more fights with the liberal Dems than necessary, after Syria made things tense. I don’t think he has any problem appointing Yellen.

                • joe from Lowell

                  or even than Summers thinking the hassle of a tumultuous confirmation battle isn’t worth the job.

                  Poor Lawrence Summers just couldn’t face the acrimony.

                  He’s such a gentle soul.

                • Snuff curry

                  Or, alternatively, he couldn’t very well step aside and allow a mere gu-url to “beat” him. This has, after all, been treated by the press, stoked by the administration, like a tournament to the death rather than an appointment.

                • Ed

                  For months reports have been hinting broadly and lately, stating outright that Summers was Obama’s favored candidate. Obama’s not going to get him and we may or may not find out more about how that went down, but it’s perfectly safe and reasonable to think that he was Obama’s first choice.


                  Past and current administration officials say that Mr. Summers has been the Fed candidate-in-waiting arguably since Mr. Obama was first elected, notwithstanding that the president renominated Mr. Bernanke in 2009.

                • I don’t think he would have faced anything more than token opposition from Congress.

                  Based on what? Jon Tester came out against the nomination. He maybe could have been gotten through but it was going to be a very heavy lift, much harder than could have been anticipated last month.

              • CD

                Exactly. The WH decided against the nomination and gave Summers a heads-up so he could withdraw first. This is the standard face-saving maneuver when an insider doesn’t advance.

                It’s pretty much inconceivable that Summers would have acted first.

            • I really, really, doubt that Obama would have used Rice as “bait.” This is so not his style. I think an argument can be made that he doesn’t have a fixed goal–this person to this slot absolutely–but is very open to possibilities. In the Rice case I think he definitely was considering her and might have advanced her had it not been for the strong headwinds. But look at the way hehandled the warren thing–he wanted her for the CFPB, drafted her to design it, but when he saw that he would not be able to win the confirmation fight he accepted that and picked a good number two person and helped her get into the Senate. He’s totally a glass half full person. I find it hard to imagine, as well, that he will spite nominate someone other than Yellen if she was ever on the radar for the job. He’s just not a spiteful person.

              • joe from Lowell

                I don’t think he would have done it unless she was on board.

                I also don’t think he would have led Kerry on for four years and then yanked the rug out.

            • Ben

              It’s all 11 Dimensional Chess, isn’t it, joe?

              • joe from Lowell

                Trollin’ trollin’ trollin’

          • MDrew

            Rice for State was very much never real IMO. At best, it was only ever very tenuously real.

            • MDrew

              …I guess it depends what “real” means. As Aimai says, if ‘real’ means she was being seriously considered while her name was floated, then yes, it was definitely real. If ‘real’ means the the president had essentially decided he wanted her and was going all out to get her in the job (which is how I take the term), absolutely no, never real. I don;t think he ever decided he wanted her in the job. I think he was considering her, and he put up the big stink to say to John Lindsey McGraham, ‘Benghazi is over, nd you can’t do my people like this.’

              OTOH, it definitely seemed to me like Summers was real in the latter sense, though joe is certainly right, it was rumors. They seemed pretty strong, though.

        • Scott Lemieux

          I think we should distinguish between two claims:

          1)Summers was a done deal. The evidence for this was always very week.

          2)Summers was Obama’s first choice all things being equal. This seems to have been widely reported by reliable sources. We can’t be absolutely certain that it’s true, but it very likely is.

          • joe from Lowell

            This seems to have been widely reported by reliable sources.

            All the sources, in all the stories, were anonymous.

            • Royko

              Yeah, but if all the stories were wrong, Obama could have easily leaked or signaled it to the press. Why let everyone get pissed off for 3 months if it’s over nothing?

        • Ed K

          I’m betting for Delong being so utterly captivated by his visions of Summers’ brilliance that it was purely compulsive to make increasingly tendentious arguments about how much he ‘really understood’ that were entirely fucking beside the point of everyone’s critiques of the guy.

          It was a deeply sad display, but I’m not sure it was anything more than that.

          • CD

            Summers was DeLong’s boss at Treasury in the Clinton admin, and is a friend and co-author. Aren’t you loyal to your friends and patrons?

            • Ed K

              If I am, I hope to God it doesn’t take the form of incessantly whining “but he’s really a good man” while ignoring the substance of the criticisms being leveled against him, and indeed doing so in ways that suggest a level of blindness to the concerns that the economics profession might have a gender problem which make it seem as if I’m part of the problem too.

              So no, the ‘loyalty is a virtue’ argument won’t wash here, at all.

    • El Guapo

      You are unhinged.

      • joe from Lowell

        That must explain my frequent errors and wholly off-base predictions.

        • genedebein

          “Frequent errors and wholly off-base predictions?”

          Why, there’s a future for you in the punditry trade.

  • ruviana

    What Dr. Dick said. I keep hearing Geithner. Bleah!

    • See, Summers over Yellen makes a tiny amount of sense if you go along with the idea that Summers is some sort of megagenius, that the Fed needs a shakeup, and that Obama personally respects Summers. It would have been a bad choice, but there would be some logic behind it.

      I’ve never heard anyone call Geithner a genius, and even if Obama respects him I don’t think anyone else does. And he’s certainly not going to shake anything up. There is literally no reason to choose Geithner over Yellen except for spite, especially since Geithner wasn’t in the shortlist.

      I don’t think Obama is spiteful or stupid enough to do that. Yellen is now the no-brainer option.

      • LosGatosCA

        I don’t think Geithner will get it. I’d only change my mind if he was suggested by a Republican.

        I don’t think Yellen will get it either. She now represents an Obama cave to ‘special interests’ – I suspect a nomination from another direction.

        • Not nominating Yellen would look much worse than “caving to special interests”, which isn’t really an attack that Obama should have to worry about anymore.

        • joe from Lowell

          But it’s not just “special interests” that were pushing for Yellen.

          Senate Democrats. The New York Times editorial page.

          It wasn’t just, or even mainly, the internet left that was pulling for her.

          • I’m using the term ‘special interests’ in the Republican obstructionist and counter strategy against it political sense.

      • GoDeep

        Geithner is an idiot. He was the architect of the monstrous AIG bail out.

        Obama was smoking pot the day he decided that nomination.

  • It is good news and a good move on Summers’ part (if true). But mostly if Yellen makes it in, which, after all, she might have done anyway, I guess.

    Yellen seems awesome to me, so I’m just going to keep rooting for her.

    • GoDeep


      I’ve been really frustrated at Obama’s economic team in general, and Larry Summers in particular. He was a key point man in the repeal of Glass-Steagall & he bears some responsibility for the fragility of our present financial system. And based on his tenure at Harvard he’s ALSO a sexist dick. I’ve been awfully frustrated at BO’s infatuation with him.

      Here’s hoping Yellin gets the nod. She certainly deserves it.

  • liberal

    OT…JFL, can you recommend a barber in the Lowell/Chelmsford area? I moved from the DC metro area and now work in the old Wang bldg.

    • joe from Lowell

      Cost Cutters on Drum Hill Road is cheap, and there’s a Dunkin in the parking lot. Does that help?

      I’m guessing that doesn’t help.

      • liberal

        Hmm…I was hoping for a reference to something like a traditional Greek or Italian barbershop or whatever, but thanks for the info.

        Dunkin…yeah, the parking lot at the one in Woburn or Burlington on my drive up is always full.

        • njorl

          Lookin’ for a guy who’ll trim the nose hair, eh.

    • Ronan

      Perhaps take this opportunity to start cutting your own hair? I cut my own hair for a number of years and it was awesome

      • Barry Freed


        • Ronan

          I wasnt even aware of this contraption, thanks!

          • joe from Lowell

            USA! USA!

  • liberal

    Geithner already said no.

    • Well, he may revise and extend his answer now that Larry’s out (if he is).

  • Joe

    I haven’t kept up on the details, but if there was a serious chance of him being selected, the Senate Dems underline how legislators can make a difference outside of simple up/down votes.

    • joe from Lowell

      It’s been so long since we had a Senate that handled its advise and consent function properly, I’d almost forgotten what it looks like.

      So let me see here: he floated a couple of names, and then they gave him feedback, and then he listened.

      Mind-blowing. When do they start talking about Benghazi?

      • Joe

        I usually look in askance at “the golden days” references. Executive nominations as a whole tend to be agreed to or blocked in ways other than up/down votes, including behind the scene pressure, senatorial courtesy or other ways.

        Meanwhile, when the candidates are up, they are put thru their paces, also a means to air things out and serve as a way to narrow the window of possibles.

        I tend to think this is how it always was to some significant effect since Washington was upset that he couldn’t just go to the Senate chamber for a chat.

      • Warren Terra

        I think it’s more complicated than that. When the Senate “fulfilled its advise-and-consent mandate”, it typically did so in secret, in a manner that wasn’t much discussed (Clinton, for example, submitting judicial nominations to possible veto by their a home-state Republican Senators, before they were. mentioned in public, which I only recall hearing about when Dubya deviated from this previously standard practice). This with Summers was more of an open backbench revolt (or potential for same), and most closely resembles the Harriet Miers Nonination (sic).

  • Rarely Posts

    One amazing thing about the Yellen battle is that left-wing progressives are basically throwing their support around a fundamentally establishment, small “c” conservative choice: Janet Yellen. She’s been on the Federal Reserve for years, her career trajectory looks very technocratic and center-left, and her predictions have been more accurate along objective measures than any of her colleagues. As a left-wing progressive, I basically agree with our strategy, but it’s funny that Yellen is considered the leftward side of acceptable discourse. She’s not even vaguely a radical.

    Despite her clear qualifications, progressives have to fight like crazy to get this person appointed, and every other option floated is certainly no better qualified, and almost always has a worse record in making predictions. It’s astounding how distorted this makes the discourse – Left-wingers have to fight like crazy just to get competent, moderate, smart people appointed.

    • Yup – Bernanke, Gates, Hagel, Clapper, Comey.

      They make the effort necessary.

    • Look, personally I’d prefer someone like Laura Tyson.

      But I think Yellen’s gender matters a lot here. There’s a perception that part of the problem with finance is that it’s a great big old boys’ network, and that while there are surely ideological gradations out there (Larry Summers and Robert Rubin are more liberal than Henry Paulsen or Alan Greenspan), they still share a fundamental old boys’ club attitude that the finance industry is the backbone of the country and the rubes just don’t understand why we can’t leash the bankers.

      Yellen is not somebody these people want. There aren’t that many women in high finance, and to have one in charge of the Fed is in many ways about signalling to the masters of universe that there’s a new Sheriff in town.

      • L2P


        It would be brilliant for the Fed to be run by a woman. We can only hope.

        • Davis X. Machina

          Brilliant. But different?

    • Joe

      competent, moderate, smart people appointed

      It might seem astounding, but like it or not, it’s how things have gone. So, yes, it is something that these seem to be a consistent standard for the Obama Administration.

      We are not a left leaning country. Getting to ‘competent, moderate, smart people appointed’ would be a big step.

    • Keep in mind that the Fed, although “independent”, also has to deal with constant threats from the GOP to roll back the dual mandate. There’s room to be a little bit more activist than Bernanke was, but the Fed really is running up against the practical limits of its power.

    • Incontinentia Buttocks

      I do think we need to realize when we are supporting the least bad viable option (e.g. Yellen) vs. when we are supporting someone truly progressive. Face it: given the current Democratic Party, let alone the current Senate, there is precisely zero chance of an actually progressive person becoming Fed Chair. That doesn’t mean progressives should sit out fights like this. I think getting behind Yellen and pushing makes sense. It does mean, however, that we ought to be clear to ourselves about what we’re pushing for.

      • DrDick

        Agreed, though I would say that there is even less chance that this president would actually nominate one, based on his other economic appointments.

  • It’s a rather interesting development in terms of Democratic Party politics – can’t remember the last time the legislative caucus effectively vetoed a major Executive appointment on the grounds that the prospective nominee was insufficiently progressive.

    Especially in comparison to say, the total haplessness around the formation of Obama’s economic team in 2009, it’s rather impressive.

    • To me Summers being appointed would have been like a Bork confirmation. Not from a values perspective, from a career perspective.

      Despite all the noise around Bork, my immediate thought at the announcement was that Bork disqualified himself for any higher position when he fired Archibald Cox. He made a choice, there were cases to be made either way, but the consequences of the choice to me were clear. He did the bidding of a disgraced president about to be impeached / forced to resign. That’s the wrong choice.

      Summers was on the wrong side of deregulation in the 1990’s. Again cases can be made either way, but 2007 ended up proving that the positions he took were disastrous. And then add in the personality noise from Harvard.

      Bad choices, poor judgment, unacceptable behavior should never be rewarded when equally qualified alternatives are available.

      Even Moses never made it to the Promised Land. And Larry Summers aint no Moses.

      • joe from Lowell

        That was before my time: did the Saturday Night Massacre even come up during the nomination fight in the Senate?

        All anyone ever talks about today is Ted Kennedy’s description of his constitutional theories.

        • Not much, publicly at least.

          Bork was a despicable figure on lots of levels, it wasn’t necessary (or perhaps prudent) to use that against him.

          • Brien Jackson

            I’ve heard that there’s a general consensus that Bork really didn’t have a choice w/r/t carrying out Nixon’s order, because he was the last guy on the political appointee chain, and had he resigned it would have elevated a civil servant to the role and created an impossible situation for them. No idea if there’s any real meat to that, but I’ve heard it A LOT.

            • Ron

              I was around, and reading everything I could get my hands on and there was no reason Bork couldn’t have refused to fire him.

            • Rarely Posts

              I’ve heard it a lot, and as a civil servant, I believe it to be total foolishness. Elevating a civil servant to the role would have been fine — lots of civil servants do their jobs better than political appointees!! We also go through similar periods between every switch in parties. Civil Servants step up and perform the duties that a political appointee normally would. The Republic does not collapse.

              Now, it’s true that a civil servant might have refused to execute illegal or unethical orders given by Nixon, but I’ve never bought the argument that Bork simply had to execute an unethical order because otherwise it might not have been executed.

              To be fair: lots of political people and elites who move in the circles of political appointees disagree with my perspective. They think that Bork simply had to execute the order, because otherwise chaos would ensue. But, what they really mean is that a political appointee should never be held accountable for following the orders of people above them in the hierarchy. I understand why they want that to be the case, but I don’t buy it.

              • Rarely Posts

                Also, just to follow up: as much as I dislike Summers, I don’t really think he’s comparable to Bork. I’m not aware of any unethical conduct on his part that approaches Bork’s conduct. And, as much as he shows bad judgment, it’s nowhere near as bad as Bork’s bad judgment or sheer intellectual dishonesty.

                • To reiterate what I said, only the ‘career’ decision aspect of Bork’s choice and Summers series of decisions on regulation have a similar IMPACT – on their respective careers – from my perspective. They are in no other way similar.

                  Bork had a choice. Richardson and Ruckelshaus (?) had a choice. The cover for Bork was that the two of them prevailed on Bork to stay for the ‘good’ of the Department of Justice.

                  Richardson and Ruckelshaus (?) said in their cover story that they only resigned because they stipulated specifically in their confirmation hearings that they would not fire Cox. Thus they felt they had to honor that commitment to the Senate. Bork did not have to make that commitment for his appointment.

                  All that may be literally true, but my guess is that if Bork says to them, ‘I don’t want to be the guy who fires Cox’ I value my personal reputation more than that and I’m not torching it for someone who may be taking down the country.’

                  Especially, since he knows he’s not going to be nominally in charge for more than a few hours/days.

                  Or, he more likely says, ‘Screw the Democrats. The president can do whatever the ____ he wants and it’s none of their ______ business. Cox is gone. Now, how do we make this sound like I didn’t enjoy it?’

                  Likewise, Larry had choices. On derivative regulation/Born, on banking deregulation, at Harvard, etc. He made them all in favor of entrenched interests (elites, banks, men) and they were all disastrously wrong.

                • Sorry left out the last part of the sentence:

                  All that may be literally true, but my guess is that if Bork says to them, ‘I don’t want to be the guy who fires Cox’ I value my personal reputation more than that and I’m not torching it for someone who may be taking down the country.’


                  they would have gone to plan B or C or D.

                • CD

                  Exactly. Bork was a loon. Summers may be a lot of things, but a loon he’s not. Personalities aside, it’s not clear there’s a massive policy difference between him and Yellen.

              • rea

                I’ve never bought the argument that Bork simply had to execute an unethical order because otherwise it might not have been executed.

                You missed the point. It would be unfair of a poltical appointee to put a civil sevice employee in a position in which they had to carry out a legal but horrendously bad and unpopular order or lose their job.

    • DrDick

      Have to say that I am delighted that my own Sen. Tester was part of the group that did that.

    • Ed K

      At some point, especially given that Tester was one of the hell no’s, I’m inclined to read this as more a case of “the prospective nominee was a fucking insufferable asshole who furthermore wouldn’t listen to anyone who wasn’t before going off and wrecking shit.”

      I’m ok with that logic too.

  • Rarely Posts

    In the last two months, I’ve come to seriously doubt Obama’s judgment between his leaning toward Summers and his desire to get us involved in Syria militarily. And now, we apparently may dodge both of those bullets, and quite possibly because of Obama’s immense good judgment (and superior judgment compared to those who surround him). It’s hard to know whether others are saving Obama from himself or he’s saving his administration from those around him (though it appears to be the latter), but to the extent that it’s results that matter, these outcomes (assuming we disarm Syria’s chemical weapons without war and Obama appoints Yellen) certainly increase my opinion and confidence in him.

    • Gregor Sansa

      I don’t give him credit for seeking these results (I don’t think he really did), but I do give him a bit of credit for not spitefully resisting them. It’s a pretty low bar, but there are a lot of politicians who wouldn’t clear it, so … could be worse.

      • Given how rarely it’s exceeded, I’m not sure it’s a low bar.

        • DrDick

          Sadly true.

    • If he keeps this up the great question history will pose on the Obama presidency is: lucky or good?

      You don’t suppose Putin and Summers had little birdies whisper in their ears?

      • Rarely Posts

        Look at Obama’s campaign opponents, particularly in general elections, and it’s hard not to see that he’s lucky:

        1) Jack Ryan: pressured his ex-wife, actress Jeri Ryan, to go with him to sex clubs, dropped out;
        2) Alan Keyes: crazy and did not even live in Illinois;
        3) John McCain: idol of the press, but war crazy, running during the nightmarish end of the Bush II years, and selected Sarah Palin as his VP;
        4) Mitt Romney: proceeded to explain that 47% of the Country is hopeless and not worth his concern, said that Detroit should go bankrupt, fundamentally an unappealing person.

        Sometimes, I honestly wonder if Obama cut a deal with the devil or something. And, I’m a big supporter, but still!

        • heckblazer

          1) and 2) were the same election. After Ryan bowed out the Illinois Republicans selected Keyes as his replacement. And as for 4), remember that Romney was the least horrible Republican in the primaries.

          • Warren Terra

            Obama has benefited from a collapse in Republican institutions, as the Republicans have to a lesser degree perhaps benefited from a collapse in Democratic institutions. Ryan ran for Senator not to cap a career as Republican grandee but as a rich schmuck able to buy the nomination; after he self-destructed, the Republican party chose to turn the race into a national joke rather than a serious race. And in 08 and 12 the Republicans had the nominees they deserved.

        • joe from Lowell

          Let’s forget the incumbent state legislator he was challenging, who screwed up the paperwork and couldn’t run for re-election.

        • UserGoogol

          I wouldn’t take Romney’s “personality problems” all that seriously. These things can seem bad to people who pay attention to politics and be indicative of bad tendencies, but by the time they filter down to swing voters I doubt they move many votes. It probably made something of a difference, but it’s much more ambiguous than how the 2004 Senate race was completely insane and how 2008 was an absolutely horrible time to be a member of the incumbent party.

        • This “Obama is really lucky in his opponents” meme is very annoying. ALL winning candidates look better in retrospect. Mostly because losers tend to look more like losers afterwards as we tend to only remember their faults and if you’re a strong candidate, you’re going to scare away tough opponents that you can only run against scrubs.

          Who is the last President that obviously went against only all-stars in his political career? James Madison?

        • Kamron

          I don’t see a GOP frontrunner in ’08 better than McCain, or in ’12 better than Romney. And McCain picked Palin *because* he was desperate, not the other way around.
          Warren is closer to the truth- it’s just a bad time for GOP Presidential contenders. The right wing of the party demands too much open kowtowing to The Crazy to produce a viable candidate. So I guess there’s some luck in that, more so than the specific candidates he’s faced. And he did take on Hillary in ’08, which was quite a slog and well-fought on his part.

    • Brad

      In floating the Summers trial balloon, then withdrawing the nomination when it gets shot down, Obama is helping others save him, as well he should.

    • Ed K

      I might, might, be willing to give him and his people credit for playing very smart diplomacy in all of this.

      No fucking way on Summers. Head firmly inserted in ass. Likely still curved around in that direction.

    • Rhino

      He does seem to have this uncanny ability to ‘blunder’ into solutions that turn out to be better than one would have expected at any point.

      Frankly, I begin to slowly believe there might be something to the eleven dimensional chess trope.

  • Malaclypse

    This is good news for John McCain.

    • joe from Lowell

      You know, he did say recently that this would be his last Senate term…

      • Malaclypse

        And he was prescient on interest rates in 2007:

        I’m glad whenever they cut interest rates, I wish interest rates were zero.

  • If it’s true – WOW!!!!!
    Go, Yellen!

  • Thom

    Good news. But obviously he withdrew because the White House told him it was not going to fly.

    • Are you suggesting that Summers lacks self-awareness and consideration? I am shocked.

    • joe from Lowell

      Wait…are you suggesting that the ordinary method by which the White House drops a potential nominee isn’t to put out a press release saying, “We told So-and-So to go bleep himself?”

  • Book

    Winter is coming.

  • Strong Thermos


    • joe from Lowell


  • mch

    Sorry to go completely OT, but, I want to hear from Erik on this one:


    • ChrisTS

      Holy Toledo. I thought the ‘civility’ stuff was bad.

  • recognizing what Obama apparently wouldn’t

    Scott, do you seriously believe that? Controversial nominees taking their names out of consideration may happen spontaneously, but it also happens after a quiet meeting or phone call from the Oval Office. So far, all we know still is that Obama respects Summers (there’s no accounting for taste), was considering him, and there was a strong pro-Summers faction in the White House. All the talk about Summers being the frontrunner or prohibitive favorite was just that.

    • Have to agree on this.

      Summers may only be planning to release the statement written for him by _________ (fill in the blank) from the Obama administration where he says the timing isn’t right and he really wants to concentrate on his research. Hsppened right after this conversation.

      “Larry we all know the president loves you and he’ll do anything for you. We both know that. Remember __________ (fill in shared experience of adversity and bonding with Obama) ? No one will ever forget that. And we all know you love the president and you wouldn’t do anything to hurt the president.

      “Remember when we all agreed that reappointing Bernanke instead of you was right for the markets? And you didn’t want to do your old job at Treasury? So you took the presidential appointment instead – putting the country’s needs ahead of your ego? Barack knew you were a stand up guy and on the spot he promised you the Fed chair the next time it came up?

      “The president stand by his word, 1000%. And he’ll take all the political hits necessary to get you confirmed. You have earned the right to expect that, Larry, and the president is prepared to do it.

      “Speaking out of turn, though, on a personal, unofficial level, I have to ask you to think long and hard about cashing in this chip, Larry. People around the president are concerned about the political cost, even though Obama is prepared to pay it. i include myself here. Also Joe is concerned. And Harry says the cost won’t just be fleeting, he’s concerned, too. They are prepared to do what the President tells them to do and if he says ‘Larry’s my guy for this job.’ that will be the end of the discussion and you might as well pack your bags to head up the Fed.

      “However, there are other ramifications that the President won’t consider because of his loyalty. So I’m asking you to consider them in his place. There’s Syria, there’s the debt ceiling, there’s the budget, there’s Obamacare implementation. Your nomination will be a lightning rod for all of it. They’ll bring up Russia, Harvard, deregulation, Glass Steagall. I know, I know, I know. It’s completely unfair, irrelevant, and political garbage. But I’m asking you to consider, objectively, how the Massachusetts delegation is going to react? You didn’t do yourself any favors with Warren.

      “You’re right Larry. I’ve got no right to ask this of you. I’m just some _____ punk, with some podunk, state university degree without a ranked department of economics, headed by a _______ woman. You got me. But I’m asking, for the good of the country, to get through this tough period, to take another one, unfair as it is, for the team. Please pick up the phone and call the president. Do what you think is right. Tell him you’re all in or tell him you’ve thought it over, tell him you know he’ll be able to find you a spot somewhere down the line but the timing’s just not right at the moment.

      “I’m leaving now. Make the call any time you want. You don’t have to tell me what you decide. All I ask is that you call Joe first, to set up the call. Make sure the Big Guy is available and has some contingency plan if you decide to pass on this one. Thanks. Call me next time you’re in Washington, we’ll do something fun. Sure, you don’t have to if you don’t want to. Just remember, call Joe first. Bye now.

      “Hi Joe – he’ll call you Monday. Yeah. He just asked to let the WSJ know first, to get his side out early. I won’t be getting his recommendation for the IMF job either.

      • poco


    • calling all toasters

      All the talk about Summers being the frontrunner or prohibitive favorite was just that.

      Wait… why would he need to withdraw if he wasn’t at least the frontrunner? Why would senators push back against his possible nomination? It seems extraordinarily unlikely that everyone just surmised his status without signals from the White House.

      • He was one of the shortlisted candidates and there was a lot of press coverage saying he was the frontrunner, but the simple truth is that the only way you can know who the frontrunner is if Obama says so, since it’s his call.

        Obama has already said he’s making his appointment in October, so the only way to demonstrate to liberals in Congress (whose support he needs right now) that it won’t be Summers is for Summers to withdraw. The alternative would be to announce early or to somehow publicly cut off Summers, both of which would make him look weak and the latter of which would be a pretty mean thing to do to someone Obama apparently considers a friend.

        It is entirely possible that at some point Obama wanted it to be Summers, or Obama still wants it to be Summers but is making a political play, or Summers just decided “fuck it”. We just don’t know.

        • A brief addendum: I’m sure there were signals from the White House, and there’s no reason to believe that a lot of Obama’s team wanted Summers. They don’t get a vote, though.

          I don’t think Obama secretly wanted Yellen all along. He probably was seriously considering Summers. But I don’t think there’s any reason to believe that he was dragged away screaming from appointing Summers.

    • Kamron

      Agree. This seems like one of those things where Scott agrees with what is often a polite fiction because it fits his preconceptions of Obama… it is not an easy thing to be properly critical of data that support one’s position.
      [That’s not to say I know one way or the other, just that Ive seen candidates withdraw like a million times, and never once say “Yeah, President called me up, said ‘Larry, youre a great guy but nfw are you getting this gig, have you read a newspaper lately?’ He asked me to withdraw my name, so here I am.”]

    • Ed

      All the talk about Summers being the frontrunner or prohibitive favorite was just that.

      The talk was not merely that he was the frontrunner(Yellen was in fact the frontrunner for some time). The consensus was that he was Obama’s preferred candidate, and it was more than talk or rumors.

      Mr. Summers wanted the job and Mr. Obama wanted to pick him.

  • El Guapo

    Brilliant chess playing from Obama this is obviously the exact outcome he wanted and was certainly his plan all along.

    Brad Delong is crying in a corner somewhere.

    • calling all toasters

      We haven’t seen savvy maneuvering like this since the Harriet Miers nomination.

      • Summers is no Harriet Miers.

        But it is similar in the sense that the intraparty politics was pretty nakedly disapproving of the president’s direction.

    • joe from Lowell

      trollin trollin trollin

    • Ed K

      Brad Delong is crying in a corner somewhere.

      And now we know it really is the best of all possible worlds.

      • I have it from an anonymous source that Brad was the one that talked to Larry to let him know that even the commenters on Brad’s blog were arrayed against him.

        In retrospect, Larry should have supplied the $100 bills to be signed by him while he was at Harvard. Would have created a more committed base of support.

  • Joe

    The official announcement comes about six days hence.

  • Davis X. Machina

    The vice-chairman of the Fed looks like she might get promoted to chair.

    Reading the usual liberal blogs, you’d have thought the cruiser Aurora was practicing her gun crews.

    How long after her nomination and confirmation does Yellen call on us to expropriate the expropriators?

    When does she begin to seize the commanding heights of the economy in the name of the workers?

    • Rigby Reardon

      All the small steps eventually add up, comrade.

  • jkay

    I should point out that Yellen’s of the most liberal econ school, Keynesianism, about helping the little via government spending, what FDR’s New Deal was. Obama’s also Keynesian, because saving the economy that way was the first thing he did instead of healthcare., though because Summers’ a weakish Keynesian, he wanted less money than our top Keynesian.

    Huffington Post’s unreliable, and so their article about Geithner being offered Fed can’t be trusted, because it was the only source I could see.

    Scott, why think the sources reporting that Summers led weren’t all Summers all over? Didn’t you point that out inthread once?

    Delong’s first choice at Fed was the better Christina Romer, I should point out.

    I’m happy about this too, and feel happier about our future.

  • Aaron B.


    • jkay

      Why think mean ass is a good thing?

      Why’s this common when it just makes you an ass,a lesser thing than a brain? And an ugly ass nobody wants to see?

  • MDrew

    I’m still not clear if this group of Senators has handed the president a list, or has effectively handed him a name. If it’s the latter, my bet would be that they can expect the spite.

    • joe from Lowell

      It seems to me that the President handed them two names, and they picked one.

      • Mike D.

        You think Yellen is a lock now? I don’t think that’s clear (though she’s the most likely nominee now of course).

        If that’s true their lists ultimately overlapped, which is great. The question remains how many names were actually on these Senators’ list of acceptable names for this appointment.

        • joe from Lowell

          “Lock” is a strong word. I think it’s very likely.

          I’m not sure the senators had a list of their own.

          • Mike D.

            They had a list of at least one.

          • Rhino

            I think the senators might have had a list of ‘no way, absolutely not, I will die on this hill before that asshole gets the job’ candidates, and that Summers was on it.

            I doubt senators had a list of ‘we like this guy’ candidates in any formal sense. It’s not how things are done. In this particular system the president proposes, the senate confirms or denies.

      • Slocum

        Good thing he didn’t hold the slips of paper in each and behind his back and say, “Left or right”?

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