This weekend, I read the fascinating New York Times story by Louise Story and Annie Lowrey regarding Larry Summers’ baroque financial ties to prominent banks and Wall Street firms. I didn’t detect any disqualifying details. I’d bet that Summers—unlike most politicos-actually earns his money as a board member and consultant. He seems to be carving out a successful career in finance on the basis of intellect and genuine business insights, rather than simple insider connections.
He has the experience and brilliance to make a superb chairman of the Federal Reserve. I mean really: Who would you rather have at the helm in a bewildering world financial crisis? The president obviously thinks the world of Summers, having gone to war alongside him on TARP, the auto bailout, and more. Summers’ policy values are also more progressive than many liberals would credit. (See, e.g., his fine book Understanding Unemployment.) See also Summers’ prior writings on global health and related matters.
Still, the millions of dollars and the complicated personal connections are more than an entertaining distraction. Especially now, in the aftermath of the housing bubble and the financial crisis, it behooves the next Fed chair to bring greater distance from an industry he would regulate, an industry whose depredations have so badly and so recently damaged the nation, and which has such excessive influence in Washington.
If I were Summers, I would call the president and say something like the following:
I am carving out a genuinely successful private-sector life that may move my personal wealth into the nine-figure range. At this delicate historic moment, I’m just too personally intermingled with the financial industry to step into the Fed slot. I am so grateful for your confidence in me, and for your willingness to entertain the possibility of me taking this role. Fortunately, we have a qualified person who is also pursuing the position, with whom I agree on most aspects of public policy. Let’s go in that direction. I have many ways to contribute to your presidency and to contribute beyond it. My stepping back at this moment is a good outcome for everyone.
There are many ways to serve. Sometimes, it’s important to lean in to fight for the brass ring. Other times, it’s important to lean back, and realize that other good people are available to do the job. Summers’ phone will ring again. It certainly should.
[Cross-posted at The Reality-Based Community]