I haven’t participated in the remarkably heated war of words over the identity of the next chairman of the Federal Reserve Board, partly because what I know about monetary policy could fit comfortably in a small coin-purse. Yes, thanks to a life-long affinity with debtors rather than creditors, I have deep prejudices against anyone who thinks the there are seven monetary policy sins that are variations on the word “inflation,” but have no particular reason to believe Larry Summers belongs to that tribe. And I strongly suspect a lot of the hostility to Summers is a barely sublimated continuation of an animus to All Things Clintonian that I do not share.
But still, for us non-specialists, Matt Yglesias makes a powerful case about recent experience with Summers that suggests the down-side of trusting him again with an important job based on his general brilliance might not be a great idea:
The debate over who should succeed Ben Bernanke as chairman of the Federal Reserve has exposed a number of divides within the Democratic Party: Men versus women in a party that gets the majority of its votes from women, but whose economic policy barons are mostly men; hawks versus doves on monetary policy; enthusiastic bank regulators versus more cautious ones. But most of all, the debate has split insiders versus outsiders. The bulk of observers regard Fed vice chairman Janet Yellen as the obvious, sensible choice. By contrast, former Treasury secretary Lawrence Summers’ candidacy is being boosted by a much smaller group of people composed largely of insiders who’ve worked closely with him over the years. If it were put up to a broad vote of Fed watchers, Yellen would win in a landslide. Summers’ big advantage is that “people who’ve worked closely with Lawrence Summers and are enthusiastic about him” is a group that includes the president of the United States and most of his top advisers….
I don’t know Summers, but I have met him and can testify to his genuinely amazing intellectual skills as an on-his-feet debater about big ideas. It’s something I first experienced as a student journalist at Harvard when Summers was president of the university. While nobody who was there at the time would dispute his brilliance, another thing nobody would dispute is that he was a terrible university president. Terrible in exactly the most predictable ways. The problems were not only foreseeable, but foreseen. Until, that is, the search committee tasked with filling the vacancy received assurances from Summers’ close friends and colleagues.
After reminding us of the various avoidable firestorms Summers touched off at Harvard, Yglesias closes the loop:
[J]ust as it turns out that universities do well to pick leaders with a record of success in academic administration, there’s a lot to be said for picking central bankers to run your central bank. The conceit within the Summers fan club seems to be that the job is presumptively his, and only shrill over-the-top critics have a problem with that. But nobody is entitled to one of the most powerful jobs in America. Summers’ biggest boosters are those who know him well and are blown away by his intelligence. But these same friends have a track record of badly overestimating his suitability for jobs that require other qualities.
I’m reminded of a famous tirade back in the 1980s by baseball analyst Bill James aimed at a player named Enos Cabell, whose friends and managers all vouched for his sterling character and other personal characteristics, that did not, in James’ view, compensate for the fact that “the man can’t play baseball.” Larry Summers’ universally acknowledged intellectual capacities are indeed praiseworthy. But in light of the Harvard experience, it’s a very good question whether his specific qualifications to become the world’s most important central banker are a tad more important that the high regard in which he is held by his peers.