The rehabilitation of the original TARP crew, Hank Paulson and Ben Bernanke, is bad news for Larry Summers.
The NYT reports that the White House economic adviser (who’s always described as brilliant), is now less likely to get appointed as Fed Chief next year, when Bernanke’s first term expires. Apparently the President is rather pleased with Helicopter Ben’s handling of the crisis, despite initial doubts. Plus, according to the report, Obama likes Larry Summers just where he is. Close. Not independent.
Apparently, however, others working for the White House aren’t crazy about working with Summers. They might like him to go to the Fed
Along the way, Mr. Summers has forcefully debated the Treasury secretary, his onetime protégé Timothy F. Geithner, over what to do with troubled banks. He has clashed with Peter R. Orszag, the budget director, over fiscal and health policy issues. He has collided with Austan Goolsbee, an economist on the Council of Economic Advisers, over whether to rescue Chrysler. And he and Mrs. Romer have squabbled over how best to make the economic case for overhauling health care.
His argumentative style has contributed to delaying some actions, officials say, like the Treasury-led overhaul of the bank bailout program that was inherited from the Bush administration and an overhaul of the financial regulatory system, which is now expected later this month.
All that being said, it doesn’t sound things are that bad, cause the article has a ton of on-the-record quotes from the major players, including Geithner, who said: “I am completely comfortable pushing back at him.”
So rather than a real picture how things are strained, this is more of a piece saying: Here are the fiery, brilliant people in the White House, debating the things that will save our lives. Let’s hear it for smart people who lake to debate ideas.