This is a startling revelation indeed. The WSJ is reporting that Larry Summers, citing a potentially “acrimonious” confirmation process, has withdrawn his name for consideration as Fed Chairman. Four prominent Senate Banking Committee Democrats were already on record opposing his possible selection for Fed Chair, along with 200 economists. This is yet another slap in the face for an Administration that has displayed a stunning lack of regard for the will of the American people. We can only hope that Summers doesn’t find future employment anywhere near the halls of Washington.
You can read the Summers letter below. President Obama has also issued a statement, but Barry Ritholtz has a more interesting version of how the statement should read if Obama were willing to tell the truth about Summers.
“Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve. Larry was a critical member of my team as we faced down the worst economic crisis since the Great Depression, and it was in no small part because of his expertise, wisdom, and leadership that we wrestled the economy back to growth and made the kind of progress we are seeing today. I will always be grateful to Larry for his tireless work and service on behalf of his country, and I look forward to continuing to seek his guidance and counsel in the future.”
And now for the more truthful version of what Summers should be remembered for….
“As Treasury Secretary, he helped to pass the Commodity Futures Modernization Act. This turned derivatives into a unique financial instrument with no oversight, reserve requirements, mandated disclosures, or listing minimums. The CFMA all but guaranteed that Derivatives would eventually implode. Summers further contributed to the crisis by Summers by overseeing the repeal of Glass Steagall. With this firebreak between Wall Street and Main Street effectively removed, the financial conflagration of 2008 spread from Wall Street to every corner of the economy.
Further, his terrible advice and lack of insight is in large part the reason we see so little progress being made today — the lack of economic growth, the concentrated bank power, the still dangerous financial system and of course, the sub par job creation.”