The most charitable interpretation of the ongoing Fed Chair appointment debacle is that Obama is doing it for show. The more likely interpretation is that this is going to end up another shambolic fail. Pretty depressing regardless.
- Charitable: Obama feels like he “owes” Larry at least the pantomime of an attempt to put him in at the Fed. Larry has wanted this job forever and Obama doesn’t want to be the one to tell him it isn’t going to happen. So he’s letting a wave of opposition stick the knife in for him.
- Likely: An increasingly isolated Obama is the only guy in Washington who doesn’t understand that Larry Summers is a raving asshole who would be a disastrous Fed chair. Because this is clearly less a push “for” Janet Yellen and more a collective “anyone but Summers” movement across a wide swathe of the reality-based-community. The 400 economists and 3 1/2 democratic senators on the banking committee are couching their objections on Summers’ policy views, but making it very clear that his personality is the real problem.
How does this end? At this point, it seems to be tipping over along the lines of the Bush’s John Tower nomination debacle of 1989 (where the strongest opposition came from those who had worked with him personally). The groundswell of opposition is rising and firming to the point that Obama’s smartest move is to bow to it in advance. More likely he will try to push Larry through and suffer an ignominious defeat. This is eminently avoidable still, but I am increasingly worries about an unnecessary own-goal here. For more thoughts see post below.
