Dean Baker: The Media's Disgraceful Acquiescence to Larry Summers' White House Boosters

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Published on Saturday, September 7, 2013 by The Guardian

The Media's Disgraceful Acquiescence to Larry Summers' White House Boosters
Summers' record should bar him from the Fed chair. Why is the press letting anonymous administration officials promote him?

by Dean Baker


Selling Larry Summers as the successor to Ben Bernanke as chair of the Federal Reserve Board is a tough job. The basic problem is that Summers has a dismal track record to overcome, while his main competitor, Janet Yellen, the current vice-chair, has an outstanding record.

Summers was a big supporter of financial deregulation in the 1990s and 2000s. He pooh-poohed concerns over the stock and housing bubbles. He thought the over-valued dollar and resulting trade deficit (and loss of millions of jobs) was great. He was a protector of the Wall Street banks when they were flat on their backs, and he thought the economy could get back to full employment without additional stimulus. And he has the distinction of being effectively fired as president of Harvard.

Meanwhile, Yellen was the first person at the Fed to recognize that the collapse of the housing bubble was going to be a serious problem. The Wall Street Journal recently scored the Fed governors and bank presidents on the accuracy of their economic forecasts. Yellen came in first by a wide margin.

But the pro-Summers White House insiders know how to do their jobs – and they had no intention of letting stubborn facts get in their way. They managed to story after story in the top news outlets telling the public that they had Larry Summers all wrong. He actually was prescient about the risks from the financial sector and knew all along that we faced a long difficult road to recovery. ........................(more)

The complete piece is at: http://www.commondreams.org/view/2013/09/07-0