Sunday, July 28, 2013

Bob Kuttner says progressives should want Janet Yellen as Fed Chair - but shouldn't demand Obama appoint her?

Bob Kuttner has an informative column about why Janet Yellin would be a far more progressive and constructive Chair for the Fed that Larry Summers or some other loyal lackey of Wall Street: The Bungled Coronation of Larry Summers Huffington Post 07/28/2013.

But then he bizarrely turns around at the end and says that if progressives demand Yellin, that Obama might get mad and not appoint her and it would all be the fault of her supporters!

But these reversals do not necessarily mean that Yellen is the front-runner again. If Rubin, Summers and their allies run true to form, they will be frantically looking for a plausible woman candidate who is closer to Wall Street than Yellen. Obama may also react negatively to a public campaign to force him to make the Yellen appointment. His anti-Yellen advisers will be warning him that capitulating to this pressure will make him look weak.

One parallel that comes to mind was the campaign by liberals to press Obama to name Elizabeth Warren chair of the Consumer Financial Protection Bureau. In the end, the job went to someone as progressive as Warren, Richard Cordray, but not to Warren (who is better off and more influential in the senate). But, in general, campaigns to force a president to make a particular appointment face rough going.

What other possible women? There are really none as qualified and talented as Yellen, an economist who has served both as Vice Chair of the Fed Board of Governors and, before that, as president of the Federal Reserve Bank of San Francisco. One possible name is Laura Tyson, a widely respected economist who formerly headed the National Economic Council under Clinton, and who is close to both the Rubinites and to the liberals. However, Tyson since leaving government has joined several corporate boards including Morgan Stanley, and as a friend and supporter of Janet Yellen, she would be unlikely to stab Tyson in the back.

But as this drama continues to unfold, watch for leaks of other possible women candidates who are closer to Wall Street than Yellen. The issue here is not just that Yellen is female; it's that she is immensely talented, public-minded, and independent of Wall Street. It would be a shame if progressives succeeded in blocking Summers only to lose Yellen. [my emphasis]
Honestly, this just doesn't make jack for sense to me. Since left to his general conservative inclinations on matters economic, Obama would appoint a Wall Street stalwalt, and since Kuttner himself is saying that the campaign for Warren resulted in a better CFPB appointee that we would otherwise have expected, how can it be a bad thing from a progressive point of view for Democratic progressives to demand the Democratic President appoint a decent Fed Chair? Especially since the position has such high visibility in the business world?

That just sounds goofy to me. "It would be a shame if progressives succeeded in blocking Summers only to lose Yellen." It would be an even bigger shame if progressives assume that Obama will appoint a good Fed Chair without pressure from the base. Good grief!

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