CNBC reported yesterday that the President’s pick to be the next Fed chair is almost certainly Larry Summers.

Buckle up, America, it’s going to be a wild ride!

Ezra Klein in WashPo follows up:

The White House’s economic team is lockstep behind Summers. And President Obama’s mind has long been pretty much made up. His preference for Summers comes from two years of working with the guy every single day and two more years in which they were routinely in touch. It’s not a soft lean.

The one question, Klein says, is whether Senate Democrats would really refuse to support Summers—and if the White House would accept that fight, or choose not to have it.

If the comments following the article are representative of anything, the President could certainly expect a fight from the progressive wing of his party.

Yesterday I had a long talk with a Bloomberg reporter working on a piece about Summers. His angle—at least in terms of our conversation—is whether the Harvard experience is relevant to this debate about whether Summers should be Fed chair. In particular, he was interested in my opinion about the debt swaps Summers persuaded HMC to make and whether that was a bad call.

I’m not enough of a financial expert to give an opinion on that, but I did say two things. One, as I’ve said before in this space, on his way out the door Summers could have said, “Hey, by the way, those financial instruments I got us into…? Might want to keep an eye on those.”

And b, more important for the purposes of this conversation, is that Summers thought he was qualified to make investment decisions for HMC—more qualified than Jack Meyer, whom most observers would have agreed was doing a rather remarkable job at growing Harvard’s wealth. Summers’ move to make investment decisions was clearly an expansion of the president’s role and a reflection of his remarkable, let’s say, self-confidence.

And to me, that extension of power, more than whether or not Harvard should have gotten out of the swaps sooner than it did (obviously it should have), is the real problem here. There was a system in place; it was working; Summers’ sense of self-importance, his desire to be involved in everything and his certitude that he could not only be involved, but run everything—destabilized a successfully functioning system. The seeds of multi-billion dollar losses were thus sown.

Which, to me, feels absolutely relevant to the issue of whether Larry Summers should lead the Fed.

One other note: The reporter said he’d reached out to folks at Harvard to talk about the Summers presidency, and no one really would help. People just didn’t want to talk to him.

That’s unfortunate. I can understand why people might not want to revisit painful memories, but there’s a lot at stake here.

Update: Here’s that Bloomberg Business Week piece for which I and other folks were interviewed. The quote/paraphrase from former provost Steve Hyman, if it’s accurate, is…interesting.

So is the attempt to redefine the swaps as a collective idea of which LWS was only a small, practically shrinking voice. I can’t speak to this as true, but no one’s ever said it before and one has to wonder why they’d suddenly put this theory out now.

In other news, the CEO of a Wall Street investment firm says that the appointment of Summers to the Fed could be a “black swan” event, which is to say a completely unexpected phenomenon for which no one has prepared and throws the markets into turmoil.

Meanwhile, the Wall Street Journal reports that Janet Yellen “has downplayed her chances of getting the [Fed] job.” That, of course, is what one does. But it’s also what one does if you really do think you’re not going to get the job and you want to start lowering expectations.

Update #2: I received an anonymous email arguing that I made several mistakes in describing the swaps. One was the idea that LHS pushed them singlehandedly; the correspondent argued that quite a few people were involved in that decision. The other was to suggest that the failure to extricate from them was not LHS’, because the presence of these swaps on Harvard’s balance sheet was far from secret. I will leave those who know more about this than I do to continue to argue about it, but thought it only fair to present that perspective.

Also, thanks to the commenters who pointed out that I didn’t link to the Bloomberg story. I actually did-just made a technical gaffe, now corrected.