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Jim Worth Headshot

The Summers of Our Discontent

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The president named a new Fed chair.

Janet Yellen, currently vice chairwoman under Ben Bernanke, was selected by President Obama to head the most important financial institution in the world. The best choice he could make.

He was poised to make a huge mistake. One we couldn't live with; one that would have caused more damage than has already been done.

The name of Larry Summers was recycled by the Obama administration, this time as a candidate for chairman of the Federal Reserve.

But was Summers the right man for the job?

This would have placed Summers at the top of the financial chain with hands around the throat of the entire world economy.

Thankfully, a couple of weeks ago, the irascible Mr. Summers withdrew his name from consideration paving the way for the appointment of someone more qualified.

There are easily dozens of individuals the president could select that would make a better Fed chairman than the combative and arrogant, Lawrence Summers, who has created as many financial crises and disasters as he's solved.

The controversial John Bates Clark Medal recipient has, in many of his past positions, allowed his inflexible and narrow-minded ideas to not only limit success, but cause failure.

Like so many in high-level government and business positions today, Summers denies any responsibility for failures or mistakes he's made. He always argues exigent circumstances beyond his vision or knowledge. That, in itself, is highly troubling.

Though described as a moderate his oft convoluted thinking appears to have been formulated by the right-wing ideologies of Reagan and Greenspan. Greenspan apologized for his part leading to the financial disaster. Summers has yet to apologize for that failure -- or for numerous others.

Many of his failures: the crucifixion of Brooksley Born as displayed in Frontline's "The Warning," advocacy of Gramm/Leach/Bliley, promotion of the Commodity Futures Modernization Act, failure in foreseeing the housing crisis, and arrogant paring of much needed stimulus -- of which people now exclaim fell way short, have caused grievous harm to so many, yet he denies responsibility and shows little remorse -- if any.

It's difficult to understand why Obama is so enamored by Summers other than his feeling that Summers was a critical member of the team that tackled the worst economic crisis since the Great Depression.

The irony is: Many of his policies have caused or added to each of our previous crises.

A number of economists signed a letter to the president urging him to select Yellen. And a group of Democrat senators on the Senate Banking Committee opposed the appointment of Summers to the highest financial position in government. His support for confirmation was further weakened when a member from the Banking Committee indicated she would not vote for confirmation until hearing a mea culpa from the pretentious economist. Humility does not appear to be in his vocabulary.

So, with Summers gone the door was open for the president to nominate Janet Yellen the first woman to run the Federal Reserve in its 100-year history.

Yellen was, by far, a less controversial selection and will likely continue the Fed's current policies, which appear to have stabilized our fragile economy.

But have those policies instead hurt millions of good, honest, hard-working innocents while helping the wrong people -- the very people who nearly destroyed the entire world economy? Has the Fed unknowingly become Judas?

The Fed's continuance of quantitative easing thwarts the potential of a healthy economy. Feeding the money-changers while taking from the humble masses, denying them opportunities that would lift their spirits and families, has hurt rather than heal the country.

This is one of the dilemmas the incoming Fed chairman will face. Congress made a colossal error letting the banks grow bigger -- despite the criminality of their actions -- and the Fed rewarded them with favorable monetary policies that saved them from extinction. The banks and other financial institutions have yet to reciprocate.

With Yellen, we at least know what to expect. With Larry Summers, that would not be the case.

It doesn't take an economist or banker to recognize Summers' failures or shortcomings. His policies have always supported banks at the expense of the people -- American taxpayers. A public servant that doesn't serve "the people"?

We need a chair that will rebalance this weak economy.

Stepping back to examine the failures of government one thing stands out. Government recirculates failure to the chagrin of intelligent and competent outsiders.

Obama's expected nomination of Summers was a perfect example of that critical flaw. Repeated appointments of inadequate individuals with questionable résumés -- whether out of loyalty or cronyism -- leaves the government vulnerable to recurrent failure. As a result sharp minds and new ideas are being ignored and wasted.

This appointment will allay some of the fears people had about the Fed.

For now, we've avoided the Summers of our discontent...

and the Winters, Springs and Falls!