Don’t Make Larry Summers Chairman of the Federal Reserve—Bernanke, Yellen, and Romer Are the Choices

Former Treasury Secretary Lawrence Summers speaks during a discussion about tax codes and revenue hosted by the Brookings Institute on May 3, 2012 in Washington, DC.

Photo by Mark Wilson/Getty Images

Ed Luce, the Financial Times columnist and former speechwriter for former Treasury Secretary Lawrence Summers says Summers ought to be the next Federal Reserve chairman.

I say: No.

That’s nothing against Summers. But you start with the fact that one logical choice is to reappoint Ben Bernanke for another term. Failing that, the overwhelmingly obvious choice is Janet Yellen. She is eminently qualified and very well regarded. The reason to go with another choice is that Yellen and Bernanke are choices of continuity, and perhaps the Obama administration wants to make a clean break with the past. That’s a pretty good idea in my view, and the person to do it would be Christina Romer, who’s specifically called for a clean break with the past.

Summers is stuck in the middle. His publicly stated views on monetary policy make him seem like he’d be a continuity candidate, but he can’t beat Yellen for continuity. Bringing in someone who’s never served on the Federal Reserve Board of Governors would be an outsider choice, but Summers doesn’t seem to have outsiders’ views. Obama should, of course, look at a range of candidates. But I do think that Yellen as the continuity choice and Romer as the change choice essentially exhaust the reasonable universe of choices. And there’s no indication that Obama wants change. And if he doesn’t want change, the sensible thing to do is to ask Bernanke to do a third term and if Bernanke says “no” to tap Yellen. Taking a pass on the opportunity to appoint the first woman to run a major central bank in favor of the guy who said women don’t succeed in academia because math is too hard for them would be terrible, and it’s difficult to think of a persuasive reason to do it.