I am late to this, but as those who have been covering the horserace for the chairmanship of the Federal Reserve already know, Larry Summers has taken himself out of the running. Sarah Binder makes some good points regarding the rise and fall of Summers' prospects as a candidate for the chairmanship. You should read her entire post, but the following especially caught my eye:
- The White House allowed the Summers nomination to twist in the wind publicly for too long, and by not actually nominating Summers, the White House "left his opponents in control of the confirmation contest." Assuming that the conventional wisdom is true and that the president wanted Summers all along, this is an especially cruel way to treat someone who was a member of the Obama administration, and who was the president's first choice for the position of chairman of the Federal Reserve.
- Quite obviously, this is a big win for the liberal wing of the Democratic party, which took the lead in sinking the Summers nomination.
- I agree with Binder that Federal Reserve nominations will become a whole lot less acrimonious when the economy finally starts humming along.
Paradoxically, of course, those who worked to sink the Summers nomination in order to get the president to nominate Janet Yellen instead might have done her candidacy some harm as well. The president may not like being seen as capitulating to the demands of the liberal wing of his party; it would make him look weak, after all. I think that Yellen is the frontrunner now, but it would not surprise me if Barack Obama chose a different candidate in order to signal to liberals that he cannot be pushed around.
Edward Luce argues that Summers and Yellen were not as far apart on the issues as Summers' opponents liked to claim that they were. Of course, policy similarities and differences are in the eye of the beholder to a very large extent, but this is worth noting nonetheless.