Kathleen Geier reported (and celebrated) the news here yesterday afternoon, but it’s worth another moment to contemplate the withdrawal of Larry Summers from consideration for chairmanship of the Federal Reserve Board. It’s always possible, of course, that this was a unilateral act by Summers to spare himself and the president the agony of a confirmation fight that would have split the Democratic Party. Robert Kuttner reports scuttlebutt that an unsuccessful meeting on Friday between Summers and Massachusetts Sen. Elizabeth Warren to solicit her support was the “coup de grace.” So it probably doesn’t matter whether he threw in the towel on his own initiative or was asked to do so by the White House.
It’s probably inevitable if unfair that Obama’s handling of the Fed nomination is being compared to his handling of Syria policy. We’ll hear a lot today from conservatives that he’s showing his weakness as a leader, which will be pretty rich coming from people who have so constantly called him a proto-tyrant and sought to restrict and undermine his authority. Ezra Klein bravely links Obama’s two big September reversals, too, but suggests they may show wisdom:
The negative spin on this is that Obama is proving indecisive in his second term. Leaders need to lead. Instead, Obama is letting himself be led. If he thought striking Syria was the right thing to do, and appointing Larry Summers made the most sense for the country, then he should’ve simply made the decision, executed the policy, and sold the American people on the results.
The more positive spin is that Obama is avoiding a common second-term trap. One problem with the rules around the presidency is that two-term presidents can quickly lose touch with the voters, as they don’t have the threat of reelection forcing them to consider public opinion. Obama, however, is choosing, unusually, to create space for public opinion (as channeled through Congress) to enter the process, and he’s actually redirecting policy because of it. That’s not a lack of leadership. It’s change we can believe in.
I don’t know that there is any actual connection whatsoever between Obama’s handling of Syria and Summers. The former issue was forced upon the administration by the August 21 chemical weapons incident in Syria itself. The president’s preference for Summers was abundantly leaked, but he withheld action until the likely reaction was weighed, and it’s not as though the appointment of someone else would necessarily represent some sort of substantive repudiation of administration economic policy.
What the whole saga most indicates is that for obvious reasons Fed policy has become a very big deal. With no prospects for the resumption of fiscal policy activism by Congress for the foreseeable future, it’s the only game in town at a time when the direction and depth of economic recovery is exceptionally fragile (indeed, as Paul Krugman notes, this week’s meeting of the Fed’s Open Market Committee, when “tapering” of monetary stimulus is on the table, is especially momentous). With Republicans ready to torpedo any Fed nominee given the opportunity, Obama could not risk the kind of Democratic revolt Summers was clearly provoking, and so he didn’t, or if you wish, Summers wouldn’t let him. You don’t have to treat the president as some sort of vacillating Hamlet for the simple recognition of political reality on a very big appointment where he has an obvious alternative who is simultaneously less controversial and close–perhaps even closer than is Summers–to Obama’s own preferred policies. The president can now appoint the exceptionally qualified Janet Yellen and bring this whole mini-crisis briskly and successfully to an end.