WSJ: Democrats Turn Fed Chairman Selection Process Into 'Circus'

Monday, 29 Jul 2013 01:29 PM

By Dan Weil

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Democrats have made a mockery of the process of choosing the next Federal Reserve chairman, amid speculation Janet Yellen and Lawrence Summers are the top contenders for the job, according to a Wall Street Journal editorial.

"How embarrassing for American economic leadership to see the choice of Ben Bernanke's successor devolve into a brawl between the Democratic Party's gender liberals and its Wall Street wing. If only the two sides disagreed on the conduct of monetary policy," the Journal said Sunday.

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"President Obama opened the circus in June when he signaled to PBS's Charlie Rose that Mr. Bernanke had 'already stayed a lot longer than he wanted or he was supposed to,'" the editorial continued.

"A more managerially competent president would have quietly advised Mr. Bernanke about his intentions and let the Fed chairman announce his departure on his own terms after eight years."

That would have shown deference to Bernanke, while giving Obama flexibility in choosing the next chairman, the Journal said.

Yellen is currently vice chairwoman of the Federal Reserve and has the support of left-wing Democrats, the Journal noted, adding that she is an economist with "long experience" who "doesn't lack for professional credentials."

"But her cause has been taken up by the liberal diversity police as a gender issue because she'd be the first female Fed chairman," the Journal added, referring to her someone who "would keep spiking the punchbowl."

"Many Democrats think the Fed needs to keep interest rates at near zero through the 2016 election, and Ms. Yellen is their woman."

According to the Journal, Summers, a former Treasury secretary and senior economic adviser to Obama until 2010, is favored for the position by Wall Street and economic officials in the Obama administration, including current Treasury Secretary Jack Lew.

The Journal also raised concerns about his candidacy, citing his role as consultant to Citigroup.

"Citibankers will consider it a bargain if their man ends up running the agency with primary responsibility for regulating Citigroup," the journal said. "If he returns to the heights of financial political power, Mr. Summers wouldn't forget who helped him build a comfortable nest egg."

"The real problem" for both candidates, the Journal continued, "is that neither . . . seems likely to do what should be the next chairman's priority — restoring the Fed's independence by ending its post-crisis political interventions and focusing above all on maintaining price stability."

Editor's Note: Over 50? Check Out These Free Government Giveaways...


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