by Mitch Kokai
Senior Political Analyst, John Locke Foundation
[Janet] Yellen is “beloved” within the Fed for her “brilliant” work on the use of monetary policy to bring down unemployment. [Larry] Summers is part of the Obama inner circle as part of the Bob Rubin team, which also includes notably former Treasury Secretary Tim Geithner, who also would be a contender for the Fed job except he adamantly doesn’t want it. [Donald] Kohn would be eminently confirmable, according to this pro.
In comments that have surfaced since Summers’ name emerged as a contender for the Fed, he has cast doubt about the effectiveness of quantitative easing. Yellen, by contrast, has supplied much of the intellectual justification for aggressive bond-buying. Kohn’s views aren’t known, but he was always part of the consensus at the Fed.
To think the decision about the next Fed chairman would come down to a dispassionate debate over policy is naive in the extreme. Yellen and Summers both have similar views based in Keynesian precepts, and it’s unlikely Kohn would divert significantly from the mainstream.
Great, more Keynesianism. That’s just what we need.