Ezra Klein and Evan Soltas:
Wonkbook: The White House wants Summers for the Fed. But will they actually choose him?: 1) All else being equal, President Obama would like to choose Larry Summers; 2) Right now, the White House is trying to figure out how unequal all else is. On the merits, they think the preference many on the left have for Janet Yellen is a bit puzzling. Yellen and Summers are both strongly committed to reducing unemployment. They’re both committed to implementing Dodd-Frank--as much as the left mistrusts Summers on financial regulation for his actions in the 1990s, the White House believes that he, like many others, is strongly committed to regulating Wall Street now. They see a lot of the opposition to Summers is based on bad or outdated information. But they’re not unaware that Summers is a polarizing choice. So some of what’s happening right now, I think, is that they’re figuring out whether opposition to Summers is soft or hard…. The White House is getting to test the reaction to a Summers pick at a time when they can still choose Yellen, or even go back to the drawing board and look at Roger Ferguson or Donald Kohn or Alan Blinder or anyone else.
In my view, both Larry Summers and Janet Yellen are two of the four best people in the world to be Fed Chair. Don Kohn was behind the curve since 2007--one of the people whose forecasts of unemployment have been consistently low and whose forecasts of inflation and growth have been consistently high over the past six years, who has a faulty model of the economy, and who has not to my knowledge marked his beliefs to market. He would be a bad choice. We know next to nothing about Roger Ferguson's views on monetary policy--less, even, than we knew about Jeremy Stein's. Roger would be a wonderful Fed Chair in normal times. But not now: now he would be a bad choice.
Blinder would be a very good choice. Yellen would be a good choice. Summers would, I think, be a very very good choice. That is the key thing to focus on and keep focusing on.
EK & ES:
One thing that’s really jumped out in my canvassing on this, though: The White House is running a very insular process. People I would’ve thought are being heavily consulted report that they’ve had little or no contact with the White House. People who have been consulted are surprised at the superficiality of the discussions. If the president is making any calls to ask for advice himself, he is making very, very few of them.