Larry Summers’s Fed withdrawal doesn’t exactly benefit Janet Yellen

September 17, 2013

Federal Reserve Vice Chair Janet Yellen (Federal Reserve/Flickr)

On at least two occasions now, President Obama has let it be known--through his advisers, if not explicitly--who was likely to be his top choice for a key position. Then-U.N. Ambassador Susan Rice appeared to be the frontrunner for secretary of state before she withdrew her nomination amid the Benghazi controversy. And Larry Summers seemed to be Obama's top pick to lead the Federal Reserve before he withdrew his name on Sunday, concluding he faced an "acrimonious" confirmation process.

Who benefits from all this pre-announcement chatter? Perhaps President Obama. As Ezra Klein noted yesterday, at least in the case of Summers, it could have been a way for the president to stay in touch with public opinion and redirect his choices with the input of others. Even if he came away looking thwarted by the left wing of his party or, worse, simply indecisive, the method might have given him a broader view into what people think of a decision before he commits to it.

Yet one person who won't benefit, even if it means he or she ends up getting the job, is whomever Obama names to be Ben Bernanke's successor. Right now, that is looking very much like it will be Janet Yellen, the Fed vice chairman who has been a favorite among many economists, liberal factions and women's groups. If named and then confirmed, Yellen, who previously led the San Francisco Federal Reserve Bank and chaired the Council of Economic Advisers under President Bill Clinton, will be the first woman to lead the Federal Reserve.

Yellen was already going to have a tough job ahead of her if she ended up in the post. She would be taking the helm at a time when Washington faces another fight over the debt limit and when an uncertain economy is underperforming projections. And as the first woman in the role, her every move would be pored over and hyper-scrutinized. Yet now, if chosen, she'd also be widely seen as the president's second choice.

If she does a good job, that blinding spotlight may fade. But at least at the start, Yellen will have an additional burden of leadership. Yes, she will need to prove that she knows enough about handling crises to lead the Fed. And yes, she will need to prove--even if the demand to do so is hushed and implicit--that she's as qualified as any of the male candidates for the job had been. But now, she will also need to overcome any lingering questions about why the president appeared not to pick her first.

There is one way President Obama can still help Yellen get off to the best start, if indeed he intends to nominate her--he can make the decision quickly.

Up until now, the lack of a nomination for the next Fed chair has been seen largely as the president wavering between a close, smart adviser who rubbed many people the wrong way and a qualified candidate who has a different leadership style than the White House seems to prefer. Further delays may introduce even more doubts about her--and she doesn't need more of them.

Jena McGregor is a columnist for On Leadership.

Read also:

Janet Yellen, and the problem with the Federal Reserve gender debate

Why the White House is uneasy with picking Janet Yellen as Fed chair

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Jena McGregor writes a daily column analyzing leadership in the news for the Washington Post’s On Leadership section.
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