Neil Irwin is right: The choice of a new chair for the Federal Reserve has gone from a sleepy backwater of Washington press attention to something resembling a circus. It’s not, to be sure, getting anything close to the attention a Supreme Court opening receives. But it’s probably on the level of, say, a first-tier Cabinet opening.
The key point: That’s a very good thing! The Fed chair is important, probably a more important position than secretary of state or Treasury secretary because those are far more constrained both from above (the president), below (the bureaucracy) and however you want to characterize Congress (also above? Parallel? Whatever). The Fed chair can’t do whatever he or she wants, but there’s quite a bit of personal latitude there. Combined with the importance of Federal Reserve actions, one can make a strong case that the Fed chair is topped only by Supreme Court justices among all the personal choices a president makes. So it’s a very good thing if the press pays attention.
I don’t think that the only reason this particular selection is getting so much attention, as Josh Barro argues, is because Larry Summers is a terrible choice. I think the institutional reasons Irwin cites are important: the growth of a press that understands the importance of monetary policy and can discuss it, along with the importance of the Fed during the recession and the new responsibilities it has been given.
I’d add a couple of things. One is the long history from John Tower forward of the difficulty in confirming presidential choices, including the defeat by filibuster of Peter Diamond for a seat on the Fed Board in 2010-2011. The press loves conflict, and all executive-branch appointments promise more conflict than they used to. I also think we have to remember Ron Paul’s long campaign against the Fed, which surely raised its profile, whatever else it accomplished.
To the extent that it’s a circus and not a story, again I don’t think the attention is about Summers in particular; it’s about how the White House botched his rollout – if that’s what it is, anyway. If the plan has always been to name Summers, then it made no sense that I can see to dangle him out there for months. And if it was a trial balloon, then surely it’s been popped, since virtually no one rallied to him.
All that said, I’m not convinced that the damage balances out the virtue in making important selections more public. It may be a circus, but it’s certainly not a three-ring version. Assuming Summers is the pick and is confirmed, President Obama has probably harmed himself a little with liberals, who will feel that they were ignored (because they were!), but I doubt it’s enough to matter much on its own. Irwin thinks the hubbub will weaken Summers within the Fed, but I’m not convinced that’s true. Pre-confirmation trouble has a long history of disappearing once the Senate acts, and I don’t see that this will be very different.
So bring on the clowns and the cotton candy, I say: A little circus is just fine.