NICHOLS: In an Economic Democracy, Stiglitz and Reich Would Be Contenders for Fed Head

[yurbud]

Sen. Bernie Sanders has written the president and urged him to pick someone like Nobel Prize winner Joseph Stiglitz or Robert Reich to head the Fed instead of his rumored first choice, Larry Summers, who pushed for the disastrous financial deregulation in the 90s, and browbeat regulators who might have lessened the disaster by actually enforcing the laws that were left.

Banks and Wall Street are the real power in America as evidenced by all the policies that don't change even when we change the party of the resident of the White House.

Obama could take a small step toward economic democracy by not letting the economic terrorists on Wall Street pick one of their loyal servants to head the Federal Reserve.

One potential contender for the job, Lawrence Summers, has a record of delivering for Wall Street and the big banks—as an advocate for deregulation, privatization and the elimination of essential regulatory protections such as the Glass-Steagall Act. As economist Dean Baker noted after the economy melted down in 2007 and 2008, "The policies [Summers] promoted as Treasury Secretary and in his subsequent writings led to the economic disaster that we now face." But Summers is also an over-the-top advocate for the sort of free trade agreements that have left communities across this country with shuttered factories and high unemployment. He’s so disinclined toward the public investments that might renew those communities that Congressman Peter DeFazio, D-Oregon, has said, “Larry Summers hates infrastructure.”

***

Declaring that “it’s time for new leadership at the Federal Reserve and a new approach to our troubled economy,” Sanders has identified Nobel Prize-winning economist Joseph Stiglitz and former US Labor Secretary Robert Reich as “excellent candidates” to replace Chairman Ben Bernanke when the chairman finishes his term January 31.

“We need a new Fed chair who will act with the same sense of urgency to combat the unemployment crisis in America today that has left 22 million Americans without a full time job,” argues Sanders. To that end, Sanders rejects Summers as a contender, writing to President Obama that “it would be a tragic mistake to nominate anyone as chair of the Fed who continued those failed policies. Instead, we need a new chair who will have the courage to hold Wall Street accountable for their fraud, recklessness and illegal behavior, and stand up for the needs of ordinary Americans.”

But Sanders also recognizes that, in the race for the Fed chairmanship, progressives should have a contender. Or, perhaps, two.

http://www.thenation.com/blog/175511/economic-democracy-stiglitz-reich-would-be-contenders-fed-head

[elleng]

1. I hope Bernie mentioned Janet Yellen,

as Alan Binder did.
http://online.wsj.com/article/SB10001424127887324564704578630352671161208.html

[Jefferson23]

2. I recall Stiglitz saying in an interview that Obama asked to speak with him and they did..

but that was the end of it. It was disappointing to see Summers and Geithner included in his team.

Flash from the past:

Chasing Stiglitz
Dec 3, 2008 7:00 PM EST
http://www.thedailybeast.com/newsweek/2008/12/04/chasing-stiglitz.html


K&R

[yurbud]

3. that was all for show.

[Jefferson23]

5. Evidently, yes. n/t

[Bill USA]

7. Obama probably considers Stiglitz and Reich as 'raving' socialists. Ha-ha.

Thanks for the link to article on Stiglitz.

recommended.

[Jefferson23]

9. I honestly do not know what he thinks of either of them, I wish I knew.

You're very welcome for the link.

[adirondacker]

11. I told a friend back then that perhaps Obama's choices were determined by "those that broke it

would be the best to fix it". I ate those words and thoughts.

[KoKo]

4. He seemed and seems to leave anything to do with Wall Street

up to the Bush Gang and Republicans. Even in his second administration (when he should have been free to go a different path) he's back at it again with the Summers support. Even defending him when some in Senate and even some on Wall Street thought Summers would be a poor choice since he was so involved in the deregulation that helped cause the Wall Street meltdown and has made sexist comments and had problems managing the Harvard Endowment Fund.

[Jefferson23]

6. There were always more good reasons to avoid having him part of Obama's

team, than to include him. Makes no sense.

Another flash from the past:

Harvard ignored warnings about investments
Advisers told Summers, others not to put so much cash in market; losses hit $1.8b
By Beth Healy
Globe Staff / November 29, 2009

http://www.boston.com/news/local/massachusetts/articles/2009/11/29/harvard_ignored_warnings_about_investments/

[KoKo]

8. Indeed and folks can read the link!

He's such a terrible pick for Obama and for him to go after "Huff Post" (that I rarely visit because of all the "Ad Porn&quot still means that he was feeling guilty or wounded and lashed out.

Not Good.

[yurbud]

10. Summers is the kind of guy that would hold no job in the administration of any party

in a real democracy where voters had an effect on the actions of those they vote into office.

Appointing Summers to anything is the economic equivalent of getting a Lewinski on the White House lawn and flipping off anybody walking by.