Ever since Lawrence H. Summers made the list of potential candidates to replace outgoing Fed Chairman Bernanke there has been a cascade of reports in the media about those who would oppose his nomination. Various grounds for the opposition included that he lacked tact in a leadership role in past positions, that he was abrasive, that he was too eager a deregulator when he served in posts at the U.S. Treasury in the Bill Clinton administration, including a stint as Secretary of Treasury. You can read a summary of these charges and more in a National Journal article by Michael Hirsh.
On top of these charges, hanging over Summers’ head were remarks he made in 2005 in a speech when he was President of Harvard University when he listed possible reasons why women are underrepresented in the sciences. One of those reasons, he postulated, is that it may be in the female DNA. Reaction to the speech was visceral. In 2006, Summers resigned from the Harvard presidency, in part over the controversy of his remarks on women in the sciences.
These past controversies and the mounting media reports of opposition to a Summers’ nomination to head the Fed came to a critical point when, as reported by Reuters, the number of Democrats on the Senate Banking Committee who said they would vote no reached four. With four negative Democrat votes, the only way a Summers’ nomination could make it out of committee was to pick up at least four Republican votes (there are 12 Democrat and 10 Republican senators on the committee), not a likely scenario.
On Sunday the Washington Post reported that in a telephone conversation with President Barack Obama, Summers asked that he no longer be considered a candidate to replace Ben Bernanke as Chairman of the Federal Reserve.
In many respects this is a sad story. Summers is often described as brilliant by colleagues who have worked with him (e.g., Steven Rattner ). For some more varied opinions see a report on what some of his academic colleagues have said.
That Summers won’t get the Fed job is somewhat of a personal tragedy. It is almost as if he were destined for it, almost born as an economist, his father and mother were both economists at the University of Pennsylvania. Two uncles became Nobel Prize winning economists, Paul Samuelson and Kenneth Arrow. Summers got an early start when he enrolled at the Massachusetts Institute of Technology (MIT) at the age of 16.
He won’t get the Fed job, arguably the most powerful job for an economist, but Summers can easily soothe his wounds with his riches. Bloomberg.com has reported his net worth to be between $17 million and $39 million.