Obama's choice of Summers as chair of the Fed would deal a devastating blow to what little is left of the public's faith that the government will serve the common good and not the ultra-rich. For Summers is the perfect symbol of the insider's game that now dominates Washington.
An even bigger problem though is that by focusing so heavily on Summers, the president has inadvertently narrowed the field down to only two candidates: Larry Summers and Janet Yellen.
A Fed Chair who made it her mission to restore effective supervision would not choose "boring," "dull," or "bureaucratic" people. She would be putting a giant bull's-eye on her back and would ensure that she never have another boring day.
"I wouldn't want Larry Summers to mow my yard." That little gem was uttered Monday by Senator Pat Roberts in what has to be a fight the White House really doesn't want to have right now.
Just the thought of reduced Fed purchases has caused investors to shiver, interest rates to rise and bond prices to fall. So, to an extent, the marketplace has already anticipated some reduction in Fed purchases.
Many people make the error of believing that the banksters are dull, humorless stiffs in gray suits. Many banksters have a finely developed sense of irony and utter contempt for financial reporters' intelligence and independence.
The Fed's chosen course of action comes with a cost. We expect continued lackluster economic growth for the next several quarters.
"Could be student loans, bonds, online education, maybe even housing again," Pinske says. "The point is, it will most likely start with Wall Street, with large banks, and if we want that to happen, we need a guy to go easy on Wall Street again. And that guy is Larry Summers."
Summers had ample opportunity in his prior jobs to demonstrate a commitment to rein in the financial sector. All the evidence shows he pushed in the opposite direction. The Obama administration's effort to portray him as the frustrated regulator should not be taken seriously.
When the great actor Matt Damon recently said that President Obama "broke up with me," he hit the jackpot of telling political truth in the eyes of many progressive Democrats and independents.
Sometimes, between sleep and the time I fully awaken, I have this fantasy about the Federal Reserve Chairman. I imagine that Ben Bernanke will testify before an exasperated, desperate Congress someday and say something like the following, perhaps near the end of his term...
Where these people will go after government is hard to predict, but the odds are pretty high that they will return to their corporate, and highly profitable, roots.
Larry Summers' record in office is littered with bad decisions. We are now paying the price for his favoring of Wall Street over working families.
The news in the last couple of weeks has had endless references to two people who we have been repeatedly told are brilliant: Larry Summers and Jeff Bezos. The paeans to the genius of both men say a great deal about the quality of public debate in elite circles.
We have just had a near-death experience in the world economy thanks to the unprincipled behavior on Wall Street. You might think that financial integrity would therefore loom large in the selection of the new Fed Chair.
Hello Congress, Federal Reserve, Commodities Futures Trading Commission, Federal Trade Commission, Department of Justice, 1600 Pennsylvania Avenue, is anybody listening? Or do the Big Boys just get to play while we pay and pay!?