Back on May 26, Edward Luce at the
Financial Times offered the first inkling in the media that President Barack Obama would likely choose Larry Summers as chairperson of the Federal Reserve. He acknowledged that Summers had potential deficits, including a deep-seated abrasiveness. But, wrote Luce, "charm is overrated":
Worries about Mr Summers’ Senate hearings are also overblown. Among economists, he is seen as neither a hawk nor a dove. Republicans would be unlikely to question his credentials. In practice—and not just for the hearings—his reputation for neutrality would be an asset. The only danger would come from the left, where Democrats such as Elizabeth Warren, the senator from Massachusetts, could raise questions about Mr Summers’ central role in the financial deregulation of the 1990s. Valid though many of the criticisms are, they would be unlikely to derail his nomination.
For reference in future stories, Luce might think about conducting some interviews to get a better understanding of what Republicans are likely and unlikely to do nowadays. To be fair, the resistance from Democrats on the Senate Banking Committee that ultimately killed Summers's prospects was something few would have predicted in May. Or, for that matter, in June or early July when word in other media began spreading that Summers was the president's leading choice to replace the current chairman, Ben Bernanke, when his term is up at the end of January.
But that opposition did arise and those valid criticisms did derail his nomination. We owe thanks to Sens. Sherrod Brown of Ohio, Jeff Merkley of Oregon, Jon Tester of Montana and Elizabeth Warren of Massachusetts for making it clear to the White House by late last week that if Summers did get the nomination, he could expect a fight even to get the banking committee's approval, where the Democrats hold a three-member majority, much less gain approval in the Senate itself with its 54-46 margin.
With much of the liberal base united in opposition to Summers, Brown circulated a letter to the president in support of Federal Reserve Vice Chair Janet Yellen without mentioning Summers's name. But the message was obvious. They weren't keen on Summers. It's unusual for senators to take such a stand before a nomination is made. That letter and other opposition sparked a vigorous defense of Summers by the president.
Meanwhile, the grassroots continue to hammer away. By this past weekend, 165,402 members of the Daily Kos community had joined an action against Summers. As Ben White and Patrick Reis noted at the end of July, the activists' "real complaint is that he is a centrist, Clinton-era retread ill-suited to steer an anemic economy back to health."
Before you read below the fold for more analysis, please sign our “thank you” petition to Senators Sherrod Brown, Elizabeth Warren, Jon Tester, and Jeff Merkley, the four Democrats on the Banking Committee whose leadership was essential in stopping Larry Summers from becoming the next chair of the Federal Reserve.
Sens. Brown and Merkley made it clear publicly they definitely would not vote for Summers if he were nominated. Warren is said to have informed the White House last week that she would oppose Summers. And on Friday, Tester said he would also vote against. Those defections meant that Republican votes would be crucial for confirmation and even in the unlikely event the White House could get those votes, there would be a fight on the floor of the Senate, with 16 letter-signing Democratic votes in question:
“In light of everything he needs from Democrats on the Hill in the weeks and months to come, the last thing he can afford is to antagonize them over the Summers nomination,” Jim Manley, a former senior aide to Senate Majority Leader Harry Reid, said of Obama in a telephone interview.
A tough confirmation fight that split Democrats was an unwelcome possibility, three aides familiar with the discussions said. That message was conveyed to the White House by the camp opposed to Summers, according to one of the Senate aides.
It's been argued in some quarters that there was no evidence that Summers was Obama's first choice and that the campaign to stop his nomination was a waste of energy or, at the very least, premature.
If Summers wasn't Obama's first choice, however, there would have been no need for the man's withdrawing his name from consideration. The president could merely have announced this week or next or anytime in the next couple of months that he had chosen Janet Yellen or one of any of several other possible candidates whose names have been mentioned.
Instead, Summers formally withdrew his name, giving the president an opportunity to send off with high praise one of the people who supported policies that contributed to or exacerbated the financial crisis. Anyone leaning toward shedding tears for Summers might remember that, unlike so many Americans who are still jobless nearly six years after the Great Recession began and five years after the financial implosion made it so much worse, he won't lack for lucrative employment.
