Here’s some depressing news from the well-connected Ezra Klein:
People dismissed Summers’s chances a month or two ago, but he’s increasingly viewed as the leading candidate today “” and opinions on this, for reasons I don’t fully understand (though I suspect have to do with a bunch of elite trial balloons going up at the same time), have really hardened in the last 72 hours.
People I respect like Matt Yglesias and Tyler Cowen don’t seem to have a big problem with Summers, but with all due respect I don’t think they’d paid close enough attention to his appalling record on monetary policy over the past 5 years. In addition to his written comments, the evidence suggests that he failed to tell Obama how critical it was to have people at the Fed who would adopt a more expansionary monetary policy.
I’ve often argued that macroeconomists as a group caused the Great Recession. Obviously “macroeconomists” is a vague term, but there are real flesh and blood individuals on both the left and the right who failed to forcefully advocate monetary policies that would lead to an appropriate level of AD. Summers was one of the most important.
Amazingly, there isn’t even any discussion of Romer.
PS. I do understand that the train may have already left the station on the Evan’s Rule, and that the choice may not make a huge difference in the short run. But don’t we want to have a competent leader there for the next crisis? These guys tend to stay in the position for a long time. We are probably moving toward a world where the zero bound occurs much more often. Do we really want to replace a guy who thinks the Fed can control AD at the zero bound, with someone that doesn’t? I’m in a state of shock.