Rarely has the speculation about the next Federal Reserve chairman received so much early handicapping — or provoked such acrimony. The White House has floated the trial balloon of Larry Summers, the former Clinton Treasury Secretary and president of Harvard. The other favorite is Janet Yellen, former president of the Federal Reserve Bank of San Francisco and current vice chairman of the Fed’s Board of Governors.
“No more second chances for Larry Summers,” thunders Fed watcher William Greider in the Nation. In addition to being a boorish and failed president of Harvard, Summers as Treasury Secretary helped tee up the financial crisis by backing deregulation. Then he made millions working on Wall Street. An insightful piece in the New York Times looks at the “battle between the California girls and the Rubin boys.” Rubin being Robert, the former Treasury Secretary, head of Goldman Sachs and tier of exquisite tie knots. Yellen, meanwhile, is supported by economists Laura D’Andrea Tyson, chief of President Clinton’s Council of Economic Advisers and Christina Romer, who held the same position early in President Obama’s first term.
Whomever replaces Ben Bernanke will be left to wind down the Fed’s record expansion of the monetary base and more than $3 trillion in assets, while contending with a tepid recovery, high unemployment and a question over whether the Fed will use its new Dodd-Frank powers to rein in the big banks and prevent another panic. Care to make an early vote?
Read on for some of the most interesting econ and business stories you might have missed this week…and the haiku.
This Week’s Links:
• IMF fears Fed tapering could ‘reignite’ eurozone crisis | The Telegraph
• Why tight U.S. labor markets are here to stay | Bloomberg
• A better way to think about trade | Simon Johnson
• U.S. manufacturing and the troubled premise of reshoring | The Guardian
• Why is corporate investment not more robust? | Marginal Revolution
• The complete failure of austerity, in one chart | Huffington Post
• Detroit’s decline is a distinctively capitalist failure | The Guardian
• The long-term consequences of the Clean Air Act of 1970 | Owen Zaidar
Today’s Econ Haiku:
How does he do it?
Jeff Bezos keeps investing
Wall Street unfulfilled