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Wednesday, August 14, 2013

At Byzantine Banking Central: Summers vs. Yellen is a No Brainer

"Look, if you can't stand the Byzantine intrigue, perhaps you should get out of the cabal."
(Warren Miller/The New Yorker)

The claqueurs of Larry Summers (and to a lesser extent Janet Yellen) have been rustling the pages of the media (and presumably backroom connections, with President Obama playing coy) for their candidate for the chairmanship of the Federal Reserve Board, but not without a backlash, particularly at the New York Times.

Thus Paul Krugman has already come out for Yellen or against Summers, as has Maureen Dowd in today's op-ed The Summers of Our Discontent.

The 'Creditanstalt' monetary advisory committee has now unanimously decided on a recommendation and issues the following press release:
Appointing Janet Yellen is a no brainer - she is experienced, a top economist, personable and confidence inspiring. So why are we even debating Larry Summers, who is only some of these things, but comes with the toxic baggage of repeatedly putting his foot in his mouth going back a long way (remember the 1991 third-world toxic wastes memo - now the object of intense NSA-SWIFT scrutiny?).
Nevertheless, in his current Saul-to-Paul incarnation Summers has converted from the religion of deregulation to the slayer of the austerity dragon while expressing scepticism about the efficacy of quantitative easing. Brad de Long breaks a lance for Summers in the Financial Times and on his blog/NY Times: "Larry Summers has an edge as the most creative thinker likely to successfully think outside the box should outside-the-box thinking be called for." 
The 'Creditanstalt' monetary committee thinks that outside the box is precisely where Larry Summers belongs, and where he can make the best contribution to economic science and policy making. Being inside an institutional box, whether the World Bank, the Treasury, or the Presidency of Harvard, has never really suited him. Thus appointing Janet Yellen to the Fed chairmanship, in the quaint American expression, is simply a no brainer.
Vienna, August 14, 2013

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