See Brad DeLong .
I dunno what to say.
With options like these, how can Obama go wrong?
On one hand, he could stick with Ben Bernanke, inflation-fighter extraordinaire, who is dragging this recession out, kicking and screaming, much longer than necessary. Apparently he just hasn't got the testicular fortitude to do what his own research suggested Japan should have done in the 1990s and the Fed should have done in the 1930s...
Or we can have Larry Summers, who would also almost certainly be an inflation hawk, and who would likely use his position to decide the next few elections.
I enjoyed this quote: ' "maybe a professor of economics will never again be the best choice for the Fed chairman," said Darrell Issa (R., Calif.).' although i might be taking it out of context...
According to Intrade, there's a 69% chance Bernanke will get reappointed. Nevertheless, the article suggests that "Treasury Secretary Timothy Geithner is expected to play a key role in advising President Barack Obama on whether to reappoint Mr. Bernanke."
And Geithner is you-kno-who's boy! Summers will no doubt be pushing hard for the role...
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Given former US Sen. Ted Kaufman's conclusion that the Dodd-Frank Act has failed to reduce "too big to fail" systemic risk of the big banks (see http://thewordenreport.blogspot.com/2013/07/did-wall-street-write-dodd-frank.html), the need is greater for the Fed to keep a watchful eye on the megabanks, which are still engaging in high-risk trades. (on this point, see http://thewordenreport.blogspot.com/2013/05/can-federal-reserve-handle-banks-too.html) Paul Volcker would not pull any punches. He took care of inflation in the early 1980s and pushed the "Volcker Rule" even as lawmakers and regulators have weakened it in line with the interests of Wall Street. In contrast, Larry Summer pushed for the repeal of the law that had kept commercial and investment banking separate (the Glass-Steagall Act) and lobbied Congress to keep financial derivatives unregulated in the late 1990s. (See http://thewordenreport.blogspot.com/2012/07/foe-of-glass-steagall-break-up-big-banks.html) Is there a learning curve here or is history bound to repeat itself?
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