In the race to pick the next Fed Chair, Larry Summers is seen by many as the "insider" choice while Janet Yellen is regarded as the "outsider" choice. So who will come out on top?
Heidi Moore, The Guardian’s U.S. finance and economics editor, has “no idea” who President Obama will nominate as the next Fed chairman. But she has placed herself firmly in the pro-Janet Yellen camp, arguing that the “obviously qualified candidate” and Fed vice chair has many qualities that her main competitor, Larry Summers, does not: fewer enemies and an open mind. Moore does not dispute that Summers, president emeritus of Harvard University and President Clinton’s Treasury Secretary, is a “brilliant” economist with the requisite credentials for the job. Yet the fact that Summers was a “paid servant to Wall Street” means he lacks distance from Wall Street – a factor that could negatively influence monetary and economic policy, Moore writes in a recent column. Summers has earned more than $5 million in compensation from hedge fund D.E. Shaw in the past year; Wall Street firms like Goldman Sachs, JP Morgan and Citigroup have paid Summers hundreds of thousands of dollars in speaking fees since he left public office.
Summers, who headed President Obama's National Economic Council from January 2009 to November 2011, has many allies in the White House. Those who have publicly thrown their support behind Yellen include esteemed economists like Paul Krugman, Christina Romer and Alan Blinder. Yellen also has support from many top-ranked female economists according to a recent CNNMoney poll.
Moore tells The Daily Ticker that Yellen’s gender has unfairly played a role in the nomination contest. Yellen’s accomplishments should be viewed without the stigma of being a woman, Moore notes, and doing so sets a “dangerous precedent.”
When asked if Summers’ previous comments about the “innate" differences between men and women would affect his ability to lead at the Fed, Moore said no.
“It’s not a central issue,” she says. “He is disdainful of everyone equally… not just women.”
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