The WSJ reports that Summers wants the job of chair of the Federal Reserve—according to “friends.”
Which probably means that Summers wants the job very much and, thinking that a semi-public campaign might help him, either told the Journal he wants the job or told his friends to tell the Journal that he wants the job. Given the Summers recently had breakfast with Wall Street Journal editors, I’m guessing the former.
(In fact, the very fact of his having breakfast with Wall Street Journal editors probably constitutes part of a campaign for the job. But Neil Irwin in the Washington Post has an entire column “secret decoder ring” deconstructing this kind of stuff.)
Mr. Summers, a former top economic adviser to Mr. Obama, is speaking, writing, consulting, advising, teaching and still in frequent contact with the president. And some of his friends say he is more than a little interested in the Fed job.
Other than the bit about “friends,” two other things strike me as interesting about that statement. First, the omission on that list of gerund-activities of “investing,” which may be what Summers now spends a plurality of his time on. And second, that line about him still being in frequent contact with the president, which presumably didn’t come from the president. So…one guess who it did come from.
Mr. Summers is widely considered one of the top economists of his generation. He is known for being able to quickly and clearly analyze economic issues, identify the challenges and conceptualize solutions.
“He’s just an incredible combination of smart and caring.…” said Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology.
Smart and caring? Let us not overstate the case.
Gruber, who (it is not mentioned) is a former student of Summers, seems to be a go-to guy for positive quotes about Summers; in 2009, he gushed to The New Republic about Summers’ tennis-playing ability.
“Basically, he hits the crap out of the ball,” says Jon Gruber, an MIT economics professor who began playing with Summers in the late 1980s.…
And in 2007, he told the Times that “I’ve been around some pretty smart people….But it’s a different level with Larry.”
In some quarters, the old rap on Summers hasn’t changed.
“He’s not a very self-aware person,” said Cathy O’Neil, a mathematician who worked with Mr. Summers at hedge fund D.E. Shaw during the Bush administration. “He’s incredibly aggressively competitive, in a kind of…high-school debate champion kind of way.”
But another hedge funder has this to say in his defense:
“Larry is an original thinker, and it’s a lot of fun to work with him,” said Max Stone, a D.E. Shaw managing director and a member of its executive committee.
In all of Summers’ various jobs, this may be the first time that anyone has described him as “fun to work with.” So we can probably translate this remark as meaning, “If you think I’m going to say something critical about a guy who might be the next chair of the Federal Reserve…”
All this aside, would Larry Summers make a good Fed chair? In terms of economic policy, I’m not qualified to say. But I have long thought that the only things keeping Summers from rampaging unchecked were two things: a boss, like, for example, the president; and some level of accountability to those affected by his decisions—like, after much sturm und drang, the Harvard faculty.
As Fed chair, Summers would be as close to not having a boss as he could be in any position of power other than perhaps the chief justice of the Supreme Court, and as unaccountable to the public as you could be in just about any job in the country. He’d also, of course, be in a position of immense power.
I’m not sure this is a promising combination.