Larry Summers Won’t Become the Next Fed Chairman After All

Despite predictions, Larry Summers won’t become the next chairman of the Federal Reserve, as he has withdrawn his name from the running.

Larry Summers in November 2012. Credit: Canada2020

This is your first of three free stories this month. Become a free or sustaining member to read unlimited articles, webinars and ebooks.

Become A Member

Back in July we felt some trepidation upon learning that Larry Summers, the former Treasury secretary, had become a frontrunner to replace Ben Bernanke, the outgoing chairman of the Federal Reserve.

But it turns out we needn’t fear that the man who helped enable the foreclosure crisis and who, according to at least one of his colleagues, “hates infrastructure” will be making the country’s financial decisions. On Sunday, Summers officially withdrew his name from the running, the Wall Street Journal reports.

“This is a complex moment in our national life,” Summers wrote in a letter to President Obama. “I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interests of the Federal Reserve, the Administration, or ultimately, the interests of the nation’s ongoing economic recovery.”

As I’ve previously written, city halls around the country would have had reason to worry if Summers did end up leading the Fed. He was behind deregulations passed in the late 1990s that allowed banks to engage in the sort of risky borrowing and lending that precipitated the 2008 housing crisis.

He still has retrograde views on housing, arguing in an October 2011 op-ed that homebuilders should continue with unsustainable practices that characterized the industry in the early 2000s. And he continues to push for extending tax cuts as means of economic recovery, rather than infrastructure spending.

Bernanke’s term as Fed chairman will end in January. Pretty much everyone expects him to step down — though Bernanke himself has stayed mum on the subject — which set off bouts of speculation this summer. If you’re into that sort of thing, the Journal has a handy graphic with brief profiles of Bernanke’s potential successors, among whom include Fed Vice Chairwoman Janet Yellen, former Treasury secretary Timothy Geithner and economist Donald Kohn, the Fed’s former vice chairman.

I guess the takeaway here is to not heed Ezra Klein’s predictions.

Here is Summers’ letter of withdrawal, in full:

Larry Summers Withraws From Fed Chair Job

Like what you’re reading? Get a browser notification whenever we post a new story. You’re signed-up for browser notifications of new stories. No longer want to be notified? Unsubscribe.

Tags: real estatebarack obama

×
Next City App Never Miss A StoryDownload our app ×
×

You've reached your monthly limit of three free stories.

This is not a paywall. Become a free or sustaining member to continue reading.

  • Read unlimited stories each month
  • Our email newsletter
  • Webinars and ebooks in one click
  • Our Solutions of the Year magazine
  • Support solutions journalism and preserve access to all readers who work to liberate cities

Join 1096 other sustainers such as:

  • Gabby at $5/Month
  • Abigail at $10/Month
  • Gloria at $5/Month

Already a member? Log in here. U.S. donations are tax-deductible minus the value of thank-you gifts. Questions? Learn more about our membership options.

or pay by credit card:

All members are automatically signed-up to our email newsletter. You can unsubscribe with one-click at any time.

  • Donate $20 or $5/Month

    20th Anniversary Solutions of the Year magazine

has donated ! Thank you 🎉
Donate
×