White House Is Botching the Fed Nomination

Friday, 04 Oct 2013 07:51 AM

By Ed Moy

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As a former special assistant to the President for Presidential Personnel at the White House, I was privileged to assist the president of the United States with making many senior political appointments. So it is with professional interest that I am watching the slow-motion train wreck of the nomination for chairman of the Federal Reserve.

One the most important decisions a president can make is selecting top people for key positions in his administration. Qualifications, experience, temperament and alignment with the president's policies are among some of the top considerations.

And confidentiality is key to selecting the best person for the job. Confidentiality allows the president to recruit candidates without jeopardizing their relationships with their employers. Confidentiality prevents the candidates from cannibalizing each other to gain a competitive edge. Confidentiality keeps back ups in place in the event a finalist fails the clearance process. Confidentiality allows the president to maintain control and initiative.

And confidentiality is exactly what is not happening with the current Fed chairman search.

It started early with President Obama saying that Chairman Ben Bernanke "already stayed a lot longer than he wanted or he was supposed to," which takes away the option of re-nominating Bernanke. Then White House staffer(s) leaked to others, who then leaked the names to the press, which put the candidates in a very public bake-off. This cannibalization led to Larry Summers' embarrassing withdrawal from further consideration.

The result is a jittery market. Those opposed now have the playbook on how to exploit Fed Vice Chairman Janet Yellen's weaknesses, if she is the eventual nominee. This will also limit the pool of great candidates for future appointments because few will want to go through the bruising selection process. And candidates willing to endure an unprofessional selection process are generally the type that you don't want in a high-level position.

But the root of the problem goes beyond amateurism. This is one indication of a lack of cohesiveness, focus and discipline in the Obama White House. The White House factions that wanted Summers or Yellen felt it appropriate to eliminate options for the president instead of expanding them.

And they were comfortable trying to sway the president's mind in a public way that hurt the president. That's because they believe there are few, if any, consequences for their actions, and their agendas are more important that the president's. All of which does not bode well for the remainder of the administration.

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