According to Reuters, the Nikkei newspaper of Japan reported today, Friday the 13th, that Obama has essentially made a choice on who he will announce as his nominee to replace Ben Bernanke when he retires next year, and that the announcement will be made soon. The expected choice is a former member of Obama’s National Economic Council, and ex-Secretary of the Treasury under Bill Clinton, Larry Summers. Subsequent analysis has said that this may or may not be true. Regardless of whether or not the announcement comes next week (or even next month), it is stirring up a lot of controversy but not in the usual circles. The big debate going on is coming from within the Democratic Party (not from Republicans), screaming bloody murder and opposing anything and everything Obama does.
Why is this debate so important? Well, considering that the Federal Reserve is in charge of monetary policy (and is one of the most powerful entities in the country), then it must be true that the person in charge will wield a lot of influence over the economy and could potentially mold the economy for several years to come. The next ;logical question is why, as a celebrated economist, is Larry Summers causing such a stir among the Left? The largest contribution to the resistance against him is his hand in the economic collapse we’re ‘still’ recovering from.
If you wish to see a biography of his various positions of power over the past thirty years, you can go here, but to cut to the chase of the argument against him, Mr. Summers, as the Treasury Secretary under Clinton, was a dominant force in pushing for continued deregulation in the financial markets and the repeal of the Glass-Steagall Act. Thus, it is the stance of many progressives that he would represent the opposite of what we need in the next Fed Chairman, so much so, that democratic senators got an earful from Obama in response to all of the mounting complaints pushed by The Huffington Post (here, and here).
The most important issue (as brought up in the video found here) is that the next Chairman of the Federal Reserve will have considerable influence over the regulations being devised as part of the Dodd-Frank Bill; thus considering that Mr. Summers’ push for deregulation was a cause of the rampant speculation (which also caused The Great Recession), he is not the best candidate to be replacing the regulations that he got rid of in the first place.
The potential nomination of Larry Summers to the Federal Reserve has stirred up so much controversy that websites have been created to discourage the nomination of Summers (here), and multiple petitions have been started against him as well. If you agree, feel free to go here, or here, or here to express your opposition.