Okay. So, I was just writing a sentence or two for a Monday morning briefing commenting on the bizarre public debate over the Summers-Yellen contest for Fed Chairman when news came over the wires (so to speak) that Summers had dropped out. Oh my!
I don’t know either very well. I did serve a few years with Janet Yellen on the FOMC. The first thing that comes to mind is that I never had the private thought that, hey, she would make a great Chairman some day. The problem is that I never had that thought about Chairman Bernanke either. Yet, I think he has done a terrific job under awful circumstances. That could be my poor judgment or it may be that people grow into their jobs as the circumstances demand.
Janet always appeared studious, having always done her homework. She always had her remarks written out with the wording very precise and she sounded somewhat pedantic if the truth be told. Wherever she was shooting from, it was not from the hip. One could imagine her burning the midnight oil getting it just right.
I know Larry even less well, and he probably knows me not at all. My first exposure to Larry was at a breakfast table at the Jackson Hole symposium in the early 1990s. There had been some sort of scandal at Solomon Brothers and an economist—possibly the chief economist—from Solomon Brothers was at the table. While he presumably had absolutely nothing to do with the scandal, or related issues, Larry bore into him relentlessly. It was the worst case of intellectual bullying that I had witnessed, before or since.
At that and subsequent conferences, Larry came across to me as a brilliant economist who couldn’t keep his shirt-tail tucked in and who was in grave danger of spilling his Diet Coke on himself or others. I’m not saying that’s a bad thing. I have those latter characteristics without the former.
I became a Larry Summers fan during his tenure as President of Harvard. In the controversies that proved his undoing—mainly involving political correctness—I thought he was unfairly attacked. The faculty victory over him made me think less of the faculty and more of him.
And then, there’s his performance as Deputy and then Secretary of the Treasury. One of the arguments against him recently has been that he was a deregulator. Oh, heavens! Weren’t we all deregulators back then, including, probably, those who attack him now for that grave sin.
I’ve been shocked—yes, shocked—at the press attention over the next Fed Chairman so far in advance of the opening. I think the interests of the press might be a bit different for the interest of the country. If it is Janet Yellen, I think the country will be served well. I don’t know that she is the best for the job, but then what do I know. I’m pretty sure, however, that Larry Summers would be better for the press. His off the cuff brilliance would probably get him into more hot water that Janet’s caution. He would be easier to kick around.