A bunch of interesting information and analysis in this piece by Robert Kuttner about the maneuvering to name the next Chairman of the Federal Reserve.
We've all heard about Larry Summers being a prime candidate and, according to Kuttner, Obama was one of the leakers:
A week ago, a carefully orchestrated series of leaks signaled that President Obama was on the verge of naming Larry Summers to succeed Ben Bernanke as chair of the Federal Reserve. Those leaks came from senior administration officials, including Obama himself.
Interesting that. And why was Larry Summers being pushed? He's Wall Street and Big Bank friendly.
Under Fed Chairman Ben Bernanke and vice-chair Yellen, with the strong backing of other progressive Fed governors such as Daniel Tarullo and Sarah Bloom Raskin, the Fed has championed the aggressive use of monetary policy to promote economic recovery, as well as tougher banking regulation. Traditionally the most conservative and Wall Street-friendly of government agencies dealing with the economy, the Fed has become one of the most progressive, at least compared to the Obama Treasury.
This independence has unnerved Wall Street moguls like Robert Rubin, as well as Obama's senior economic advisers, all of whom are Rubin protégés. The idea of installing Summers to lead the Fed would put the bank back in friendly hands, at a time when the government is belatedly increasing bank capital standards, cracking down on abuses with derivatives, and the idea of breaking up the biggest banks has growing bipartisan support. Rubin has also expressed alarm that the Fed's liberal monetary policy under Bernanke could be courting inflation.
If you have any doubts about Summers being Wall Street/Big Bank friendly see an earlier
diary documenting that Summers has been consulting for Citigroup.
With the attempt to crown Summers as Fed Chair apparently going in the crapper, Rubin and his minions has been trying other tactics, including floating stories that another Fed Governor, Sarah Raskin is a front-runner. Apparently, this would discourage Yellin and be a sop to progressives, but Raskin is apparently not at all likely to accept.
Read all of Kuttner's piece. It's very informative and goes pretty deeply into the Byzantine shenanigans of the Wall Street crowd to block Yellin or get another one of their friends in if they can't have Summers. My guess is Obama will still nominate Summers since Rubin still seems to have his ear and his brain. Obama is certainly not known to have an open mind when it comes to economic policy or selecting economic advisers.