Thursday, July 25, 2013

Group of Senate Democrats Against Larry Summers at the Federal Reserve

Talking Points Memo report that Senate Democrats have sent a letter to President Barack Obama. These mostly undisclosed Democrats are against Lawrence Summers being appointed as chairman of the Federal Reserve.

"There's a lot of concern among a lot of Democrats about an appointment of Larry Summers to that long-term position as Fed chairman," Sen. Tom Harkin (D-IA), who signed the letter, told the Journal. "He was one of the architects of getting rid of Glass-Steagall, of getting rid of other regulations. There's real concern about his economic views not really being in line with Obama's views."

Sens. Dianne Feinstein (D-CA), Dick Durbin (D-IL) and Angus King (I-ME) are also confirmed to have signed the letter.

These groups of Democrats want Obama to appoint Janet Yellen as chair of the Federal Reserve. Sheila Bair, former chair of the FDIC, makes the case to appoint Yellen. Bair notes Yellen's resume and knocks Summers role in deregulation.

That could change if the heir apparent to succeed Ben Bernanke as Chair of the Federal Reserve Board, Janet Yellen, is nominated for the job by President Obama. Certainly, there is no better qualified candidate to fill Bernanke's shoes when he steps down in January. A noted economist, Yellen headed the Council of Economic Advisors for two years; led the San Francisco Federal Reserve Bank for six years; and has served ably as Bernanke's Vice Chairman since 2010. Unlike Larry Summers, Tim Geithner, and Bob Rubin -- minions frequently mentioned in the financial press as potential Bernanke successors -- she was not part of the deregulatory cabal that got us into the 2008 financial crisis. In fact, she had a solid record as a bank regulator at the San Francisco Fed and was one of the few in the Fed system to sound the alarm on the risks of subprime mortgages in 2007.

Bair and Ezra Klein report there currently a whisper campaign against Yellen's nomination. The question is who is behind the whisper campaign?

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