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Larry Summers, Obama, & a Fed Counterfactual

Larry Summers
Former Secretary of the Treasury Lawrence "Larry" Summers. Photo: Chip Somodevilla/Getty Images
William D. Cohan
June 15, 2022

Here’s an interesting thought experiment: What if our old friend Larry Summers had gotten his wish and President Obama had appointed him Chairman of the Federal Reserve, in 2013, instead of Janet Yellen? This was in fact the plan, according to the first volume of Obama’s memoir, wherein he acknowledged that he—coaxed on by his onetime chief of staff, Rahm Emanuel—had promised Summers that he would get the top Fed job if he agreed to become the National Economic Advisor, a step-down from the role of Treasury Secretary, a position Summers held at the end of the second Clinton administration. But as word circulated that Summers was Obama’s preferred pick to replace Ben Bernanke, the progressive wing of the Democratic Party pushed back hard, forcing Obama’s hand and clearing the path instead for Yellen.