Shots in the Dark

The return of ’80s synth-pop masters Orchestral Manoeuvres in the Dark. Nothing groundbreaking, but quite nice.

No one would be casting around for another pick for Fed chair, argues Simon Johnson on the Times’ Economix blog.

Not only is Ms. Yellen perfectly well qualified to lead the Fed, she might be the best qualified potential Fed chief ever. If Ms. Yellen were a man, we would not be having this conversation.

It’s a pretty persuasive rebuttal, I think, to the argument that gender has not been a subtext—perhaps the subtext—of the Larry Summers versus Janet Yellen brouhaha.

I don’t care, I’m posting it again. This looks like the most stressful movie that I absolutely have to see. The part where she starts to hyperventilate…yikes. As a scuba diver, I’ve been there, and it is not a good thing….

Some years ago, I went to a New Yorker Festival “debate” on the subject, “The Ivy League Should be Abolished.” It was really a debate about whether the Ivy League schools, and Harvard in particular, perpetuated or bridged class differences. Arguing in the affimative was Malcolm Gladwell; opposed was…was…. Hmmm. I can’t remember who was arguing the negative, which should tell you something.*

One thing it might tell you is that Gladwell dominated the debate, and by popular vote, he also won it. But I left the evening feeling deeply irritated. Yes, it wasn’t a particularly serious discussion, but it was, on Gladwell’s part, deeply anti-intellectual—or at least, so it felt to me. You see, this wasn’t long after I had finished writing Harvard Rules, and at the time, I knew quite a lot about an Ivy League education. Gladwell, I could see, did not. He knew just enough to be clever, and he is extraordinarily good at being clever; he may be the cleverest person on the planet. And so he won the debate more by virtue of being witty and contrarian and quick on his feet, but not because he was actually right. If you knew much about the makeup of Harvard’s classes and their financial aid programs and the diversity of its student body, you knew just how little Gladwell knew.

Anyway, that’s a long way of saying he’s still going on about Harvard. (As, clearly, am I.)

Here he makes the case that “if you want a math or science degree, do not go to Harvard.” What he’s really talking about is what he calls “the scourge…of elite institutions.”

In other words, the same topic I saw him win that debate about some years ago.

You can judge for yourself if his argument has deepened with age.

* Sheesh, googling that debate, I see that Simon Schama was the moderator and Adam Gopnik was arguing on behalf of the Ivy League. Sorry, Adam Gopnik.

For you Downton Abbey addicts…a taste of Season 4.

Sorry about the technical difficulties earlier-it was a rough morning.

In the interest of fairness, Red Sox fans, I will grant you this: Your team is a helluva lot better than the 2013 Yankees.

But before you go getting all cocky and irritating about it, bear in mind a few things:

1) The Yankees, despite their slightly-over .500 record, are horrible. They’re like a go-cart nailed together by a kid with two left arms. They’re old and/or they’re hurt—think Jeter, A-Rod, Texeira, Rivera, Pettitte, Wells, Gardner, Soriano. Or they’re young and not particularly good (sorry, Eduardo Nunez). Or they’re just not very good (Phil Hughes, Joba Chamberlain).

The Red Sox have been beating up on this team, which has required 55 players just to get through the season. The Sox should be beating up on this team.

2) That “tribute” to Mariano Rivera? You stay classy, Boston. Oh, wait—you’re not.

3) Those beards are very summer-in-Provincetown. Not that there’s anything wrong with that. More power to you guys for fielding an entire team of sexually ambiguous players.

4) In 2004, you juiced better than we juiced. It’s that simple.

In all seriousness, it’s pretty impressive, the way the Sox have come back after a terrible season last season, and I’m nervous, looking into a very uncertain Yankee future. But I still find the Sox a team that’s remarkably easy to dislike.

In the New Republic, Noam Scheiber, who has covered the Obama administration and Larry Summers for years, writes that the debate over Summers has really been a debate over the direction of the Democratic Party.

…the Summers fight was the first fully-engaged Obama-era battle over the future of the Democratic Party—not just over its economic philosophy, but its whole economic constituency.

Liberal Democrats have long resented Obama’s decision to turn to, shall we say, the Rubin tong to shape the Administration’s response to the crisis, Scheiber argues. In particular, Millenials, whose formative professional years have been dominated by the economic crisis, are far to the left of the Clinton gang; according to Scheiber, polls suggest they narrowly favor socialism over capitalism. So they’re not too big on the Rubin-esque either.

There’s a lot to this, I think; Obama has never really won the trust of the left when it comes to economic policymaking because so much of his economic team is connected to Rubin and Wall Street. (Tim Geithner, Jack Lew, Larry Summers, Jason Furman.) The more liberal economic thinkers in the Administration have generally been exiled: Christy Romer, Elizabeth Warren. And unfortunately for Obama—and Larry Summers—they happen to have been women.

Scheiber has some particularly good material in this piece about Summers. To wit:

A senior Democratic Senate aide told me that several senators were bubbling over with rage toward Summers in January 2009, as he lobbied them to make the second tranche of bailout money available to the administration. They blamed Summers for many of the Clinton-era deregulatory efforts that helped cause the crisis. During one meeting of senators around this time, John Kerry thundered, “Why the hell should I listen to Larry Summers?” according to the aide, who was present. Several other senators chimed in in agreement.

I would love to know if their rage was about the way in which Summers was lobbying them or their anger at his deregulatory history. Both, I would think.

This continues my train of thought about who is advising the president. When Obama’s now secretary of state has said, and been quoted in a book published several years ago, “Why the hell should I listen to Larry Summers?” and a bunch of senators concur, that’s something you should probably consider before planning to nominate him to the Fed. There’s little sign Obama was aware of such sentiment.

Ultimately, Scheiber says, the left had pretty legitimate gripes against Summers—his deregulatory philosophy, his Wall Street buckraking.

And then there’s this, which I found fascinating:

More broadly, Summers has always been much too enamored of big shots, particularly financial elites, to make you trust his judgment when their interests are at stake. In my recent book about Obama’s economic team, I describe Summers’s gleefulness in attending quarterly dinners with Wall Street executives in his capacity as a Treasury official in the 1990s. The satisfaction he derived from rubbing elbows with the masters of the universe reflected a lifelong pattern, so far as I could tell. I would not have expected it to change should he have ascended to the chairmanship of the Fed.

Here’s a story I would love to see someone report: Elizabeth Warren’s role in all this. While I believe that she would never have voted for Summers and some published reports have said she was opposing him in part because of his opposition to her to head the Consumer Financial Protection Bureau—whew, sorry about that—she’s been very quiet about this, and in fact has not said how she would have voted.

Elizabeth Warren, I think, should not be underestimated…

Financial markets are reacting glumly to the news that Larry Summers has withdrawn his name from consideration for the Fed chairmanship.

The stock market is up about 150 points today after news that Larry Summers has withdrawn his name from consideration for the Fed chairmanship. (But did Summers volunteer to withdraw—or did the White House come to him and say, “Listen, Larry, it’s not gonna happen…but we’ll let you put it out there”?)

This despite the fact that Wall Street has invested heavily in Summers.

I will await the definitive tick-tock of the events leading up to Larry Summers’ exit from the Fed stage. And then I will read Larry Summers’ version of it, as dictated to Zach Goldfarb, in the Washington Post. Oh, wait—Goldfarb already did that.

The Larry Summers trial balloon, now popped deflated, has been a fiasco for the president, so badly handled—and such a dumb idea in the first place—that it has made me wonder if Obama hasn’t seriously lost touch with the real world. It doesn’t take a pollster to know that nominating Larry Summers to the Fed would provoke a fight; everything that involves Larry Summers provokes a fight. So why pick it—especially when you have waiting in the wings an extremely qualified, much respected, low key consensus builder who happens to score you points with women?

The combination of the Syria farce and the Summers fiasco also makes me wonder whom the president is turning to for advice, and I realized as I thought about that that I couldn’t think of anyone of particular stature now in the White House. (Quick—who’s the chief of staff?) I like Joe Biden and suspect that Summers would not have been his pick, but I doubt he was very much involved in that process.

It was at about this point in his failing second term that Bill Clinton turned to an outsider, Dick Morris, for political help. Morris had his own challenges, of course, but he did help the president connect with voters on bread-and-butter issues. Maybe it’s time for Obama to find his Dick Morris, because, let’s face it, he’s dying out there.

Now…what happened with Larry Summers?

A few thoughts.

1) The campaign to rebut opposition to him was getting increasingly desperate.

On Saturday, for example, Summers (well, Citigroup) announced that he would no longer appear at Citigroup events. Ouch! That could have cost Summers actual money. (Though probably not, since Citigroup didn’t say it would stop paying him.) That was probably a response to this Mother Jones’ article, which pointed out that Summers, who’s been on Citigroup’s payroll for a couple years now, would have to recuse himself from quite a lot of stuff involving Citigroup if he were Fed chair.

But this was too little, too late—days before a potential nomination you say you’ll avoid “appearing at events” as a way of avoiding a conflict of interest? The gesture backfired because it was insulting to the intelligence of pretty much the entire world, something for which Summers is known.

And besides, it’s not just Citigroup…what financial institution has Larry Summers not taken money from?

(Okay, I’m exaggerating, but the point remains.)

2) Summers was beginning to find the process degrading.

Summers’ allies leaked to the Washington Post that, over the summer, Summers had “reached out” to Elizabeth Warren to try to build bridges between them. (Wouldn’t you love to have the NSA recording of that phone call?)

The meeting, the Post reported, never took place “because of scheduling issues.”

How does the Post write this stuff with a straight face? Trust me: If Elizabeth Warren had any intention of even just considering supporting Larry Summers, that meeting would have happened.

How humiliating it must have been for Summers for the world to know that he wanted to make it up to Elizabeth Warren—and she wouldn’t even meet with him….

3) At places besides the Washington Post, reporters might actually have dug up some juicy stuff on Larry Summers.

Consider, for example, this Wall Street Journal piece reporting on correspondence between Summers and his uncle, economist Paul Samuelson, following Summers’ ouster from Harvard. It’s called “Letters Show Little-Known Side of Summers,” which I think is a misleading headline; the article doesn’t really establish that. As a letter writer, Summers makes a great calculator, which is to say that he writes as if he knows someone other than their recipient is going to be reading these letters.

Still, there’s some dishy stuff—like when Samuelson writes to Summers that “mob psychology can be much the same on college campuses as elsewhere.” (In fact, the letters make Samuelson sound like kind of a dick.)

It is quite interesting, though, that Samuelson blames Rob Rubin for not giving Summers better advice on how to handle the Andrei Shleifer affair. Summers was the former Treasury secretary at that point, the president of Harvard; he needs advice on why not to intervene to protect your friend the crook? I’m no Rubin fan, but you can’t pin that one on him. Summers is “brilliant,” right?

4) The media was lining up against Summers.

The Times came out with a blistering anti-Summers editorial, and last week National Journal, which is read in every Congressional office, published this cover story, The Case Against Larry Summers.

(Holy cow, I just saw that I’m quoted in that National Journal piece. Which is weird, because unless I’m completely going senile, I’ve never spoken with author Michael Hirsch in my life.)

The damning subhed: The job of Federal Reserve chairman is as much about character and temperament as it is intellect and experience. That’s why he shouldn’t get it.

5) The politicians were lining up against Summers.

I can’t remember all the Democrats who said they would oppose him—three or four on the banking committee alone—and Republicans were pretty clearly going to pound on him. What’s most telling, I think, is that I can’t think of anyone who actually came out and supported him. You can’t blame them: As I have written in this space, Who has ever benefitted politically by supporting Larry Summers?

6) Economists didn’t support him.

In fact, a lot of them signed a letter opposing him.

7) Sue Goldie supported him.

Who’s Sue Goldie? Exactly. Nothing against Ms. Goldie, but if you can’t enlist someone more prominent than that to support you…

8 ) Payback is a bitch.

To me, all the rhetoric about Summers’ remarks offending women and his prior anti-deregulatory positions and his conflicts of interest, important though those things may have been, ultimately mattered less than the fact that over the decades the number of people whom Summers has treated shabbily has become quite substantial—and some of them, like Elizabeth Warren, have moved into positions where they can now exact their revenge. Read through the codewords like “character” and “temperament” which pundits and writers used in expressing their concerns about Larry Summers. What they really mean is, “Larry Summers is an arrogant son of a bitch who was quite happy to humiliate us in the past. And now you come to us for support? Fuck you, Larry Summers.”

Is that fair? Sure it is. The relevant communities in this debate treated Summers exactly as he has treated them—dismissively. And I think they were probably right to do so, because the way Summers treated people in the past is probably a good indicator of how he would treat them in the future—especially in a position as powerful as that of Fed chair. Where he’d probably treat them worse.

So presumably Professor Summers will continue his rather ethereal teaching load at Harvard, which will, unless Drew Faust finds a spine, continue to serve primarily as a business card for Summers as he invests in tech startups and cashes Wall Street’s checks.

I’m sure that Summers’ career is far from over, but one does have a sense of a door being closed, and an enormous, collective sigh of relief being given. Or maybe that’s the sound of Cornel West laughing. And Zayed Yasin. And the Winklevoss twins. And Harry Lewis. And Tom Paulin. And Nancy Hopkins. And South Koreans. And Christy Romer. And Jack Meyer.

And…

Well. You get the point.

Larry Summers has withdrawn his name from consideration for Fed chair.

More to follow; Giants game on.

I’m not entirely sure what it’s for—something to do with Chipotle—but that uncertainty is part of what makes this so cool.

And yes, that is Fiona Apple singing Imagination, from Willie Wonka and the Chocolate Factory.