Just a couple of days after it looked like Larry Summers was in the driver’s seat for the Federal Reserve chairman’s position, the former U.S. Treasury Secretary has announced he is withdrawing from consideration for the Fed post.
Summers, who also served as an economic advisor to President Barack Obama, made the surprising announcement in a letter to Obama that was released today. In the letter, he cited a potentially rocky confirmation process as his reason for withdrawing.
“I have reluctantly concluded that any possible confirmation process for me would be acrimonious and would not serve the interest of the Federal Reserve, the administration or, ultimately, the interests of the nation’s ongoing economic recovery.”
Obama then accepted Summers’ letter and withdrawal in a statement released today.
Though to many Summers appeared to be the front-runner to replace Ben Bernanke as Fed chairman when Bernanke steps down in January, several Democratic senators appeared to oppose his nomination. Four Democratic senators on the Senate Banking committee were expected to vote against his confirmation, and 20 Senate Democrats wrote a letter to the president urging him to nominate current Fed Vice Chair Janet Yellen to replace Bernanke.
With Summers out, this would appear to put Yellen firmly in the lead for the Fed chairmanship nomination. Summers’ withdrawal makes him the second high-profile potential Obama nominee to pull out during the nomination and confirmation process. Susan Rice withdrew from consideration as Secretary of State last December under pressure because of her statements on the Benghazi embassy attacks. She was eventually chosen as Obama’s National Security Advisor.
Summers seems less likely to rebound into a lesser Obama post, however, given his history. His support for deregulation in the 1990s, while working under President Bill Clinton, as well as his controversial comments about women’s intelligence while serving as Harvard University’s president in 2005, make him less sympathetic.
That, combined with strong support for Yellen, who would be the first woman in charge of the Fed, seemed to sink Summers.
The opinions contained in this column are solely those of the writer.
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