DALE McFEATTERS: Yellen the natural choice to lead Fed
President Barack Obama has been criticized fairly for dithering over critical decisions and then not fighting hard for them. Circumstances have conspired to make one of the most important decisions of Obama’s second term for him.
Thankfully, it’s the right one, and the president may not even have to fight hard for its approval.
Last week, Larry Summers — Obama’s first choice to lead the Federal Reserve Board, one of the most powerful jobs in Washington — withdrew from consideration.
The former Treasury secretary badly wanted the job and Obama badly wanted him to get it.
Summers would have been a hard sell to the Senate. He’s brilliant, knows it and doesn’t mind letting others know it. He has a combative personality combined with a knack for unfortunate phrasing, as when he suggested there might be inherent gender reasons for the disparity between men and women in the sciences. That, and his awkward attempts to explain his way out of the situation, cost him his job as president of Harvard.
Moreover, Summers was opposed for the job by a handful of Democratic senators on the left, who thought he was too averse to financial regulation. Obama seemed disinclined to bring them around.
Summers’ withdrawal puts Janet Yellen at the head of the line for the Fed chairmanship. Vice chair of the central bank, she has more experience there than the last three chairmen did when they were named. Washington Post columnist Ezra Klein recently described her as being “the most qualified Fed chair in memory.” And prescient, too. Recently declassified transcripts of Fed meetings from February 2007 show she foresaw the coming recession when many of her fellow board members did not.
Yellen is also one of the board’s strongest voices for fighting unemployment, a too-often-forgotten element of the Fed’s mandate.
For whatever reason, she gets lukewarm support from the White House, which recently floated the name of former Treasury Secretary Tim Geithner. He has emphatically said he doesn’t want the job.
However, support for Yellen is strong outside the White House, in Congress and the financial community. She would not only be the first woman to hold the Fed job, she would be the first Democrat since 1987.
Obama has known since at least June that current chairman Ben Bernanke plans to leave when his second term expires in January. It’s now September and time for the White House to get moving.
Presidents don’t often get easy choices. This is an easy one.