Tags: Summers | Fed | Bernanke | Luce

FT: Larry Summers Should Be the Next Fed Chairman

By John Morgan   |   Wednesday, 29 May 2013 08:25 AM

"Charm is overrated," and Larry Summers is likely to be the next Federal Reserve chairman when Ben Bernanke steps down as expected by September, according to the Financial Times.

Summers' "abrasiveness" could weigh against his selection, but diplomacy may count for less in the Fed chair than intellectual leadership. And it is in intellect that Summers, a former Treasury secretary, may have an advantage, the Times stated.

Multiple polls show Janet Yellen, current vice chair of the Fed, as the likely choice to be named as Bernanke's replacement.

Editor's Note:
Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

"Such certainty is puzzling: there is no evidence President Obama sees Ms. Yellen as a shoo-in," Times columnist Edward Luce, who once worked for Summers, wrote.

Other potential choices by Obama are believed to include former another former Treasury Secretary Timothy Geithner, former Fed vice chair Donald Cohn and governor of the Bank of Israel Stanley Fischer, who holds dual citizenship.

"People's chief concern is rightly about his emotional quotient rather than his IQ," Luce said of Summers. "No one has any doubt on the latter.

"Even if he has greatly mellowed in recent years, as his friends insist, charm is overrated. He would make a bad choice as a mediator in Syria. Fortunately, a Fed chairman faces lesser diplomatic challenges," he noted.

"The most important quality is intellectual leadership — something Mr. Summers would offer in greater abundance than the others."

A move to replace Bernanke by Obama in the fall could come at a particularly delicate time in the Fed's current ultra-loose monetary policy.

Following Congressional testimony by Bernanke last week, some lawmakers expressed doubt about the effectiveness of the Fed's policies, The Wall Street Journal reported.

"My worry is that the Fed doesn't have the prescription for what ails our economy," Rep. Kevin Brady, R-Texas, chairman of the Joint Economic Committee, told Bernanke. Brady's chief worry is that Fed policies could ignite a new financial bubble without helping the economy produce more jobs.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

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