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Larry Summers: Fed destroyer or just another slave to the system?

  • Larry Summers would make the Fed increasingly political and threaten its independence, Felix Salmon worries: "Summers has been one of Obama’s closest economic advisers... He’s the kind of person [who] would bully the rest of the board into doing exactly what he wanted them to do... The result would be a central bank [with] zero independence from the government."
  • Such criticism misunderstands how the Federal Reserve system is designed, Cullen Roche counters: "The Fed’s true master is the banking oligopoly... As long as that banking oligopoly is a private for profit industry, the Fed will have to act in the independent best interests of the banking oligopoly before it can serve its other masters - the president, the congress, and the taxpayer."
  • Either way, the loud public debate over the selection has become a spectacle: "We may be entering an era where the Fed chairman job is as much a lightning rod as any other major appointment," Neil Irwin writes.
Comments (6)
  • Just so long as the Austrian school doesn't get a hold of Milton
    Friedman said...


    "I think the Austrian business-cycle theory has done the world a great deal of harm. If you go back to the 1930s, which is a key point, here you had the Austrians sitting in London, Hayek and Lionel Robbins, and saying you just have to let the bottom drop out of the world. You’ve just got to let it cure itself. You can’t do anything about it. You will only make it worse. You have Rothbard saying it was a great mistake not to let the whole banking system collapse. I think by encouraging that kind of do-nothing policy both in Britain and in the United States, they did harm."
    31 Aug 2013, 08:30 AM Reply Like
  • Summer's is a fool. Was for the repeal of Glass-Steagall, was against regulating the financial derivatives market, and helped Harvard lose a billion dollars through derivatives swaps.
    31 Aug 2013, 08:34 AM Reply Like
  • I think they've all been fools since Volcker. This is a sham laughing stock the way they continually bail out the big banks using rates and policies, QE, and trying to manipulate asset prices which of course they cannot do forever. Either this current market decline will turn into a strong year-end rally or it will morph into the next secular bear market. We should know for sure by October, here are the two plausible scenarios:
    31 Aug 2013, 08:49 AM Reply Like
  • Do not agree that they all have been fools-they are very astute in serving their bankster patrons-forget about the rest of the country/economy-as long as the banksters are doing well, all is well. Agree that Greenspan was a total fraud, The Bernank is obedient lapdog of banksters. It was initially inconceivable to me that Summers was even considered but it becomes more clear when you consider that Rubin has always pulled the strings and Obama dances. Obama is an empty suit. This article leans more to Clintonite influence but the bottom line is no difference: Clinton=Rubin.
    31 Aug 2013, 10:49 AM Reply Like
  • I cannot believe that Larry Summers is allowed within 100 miles of the Fed. At what point do public bureaucrats get swept out? How many failures does it take?


    I don't necessarily agree with Yellen on many things. But I have to give her two things. 1. She has never (to my knowledge) "cashed in" - ie I don't believe she has ever worked for Wall Street or Banks for a few million in a fake job for a year or two. 2. She was one of the few that openly spoke of a problem in the housing market prior to it imploding.


    Seems to me that Yellen is at least honest and uncorrupted. She hasn't sold access to herself. She might actually care more about the people of the whole USA rather than the people on Wall Street.


    Larry Summers may have a high IQ - but in my book he's an idiot. And all the millions Wall Street has handed to him - its not for services performed in that private sector job - its for future services performed in government jobs. And that is no better than the bribes that we as a country decry when they happen in other parts of the world!
    1 Sep 2013, 04:44 AM Reply Like
  • High IQ and common sense don't automatically go hand-in-hand. Yellen's steady record and experience as #2 at the Fed speak for themselves. Summers lives in the revolving door, and WH ties are too tight to not be influenced by politics. imho
    1 Sep 2013, 06:06 PM Reply Like
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