Mortgage

Political posturing suggests Larry Summers is next Fed Chair

Economic appoints are founded on if the team already likes the candidate and knows he or she is good at the job. However, this same type of mechanism does not mesh well with the Fed chairmanship. Per Felix Salmon at Reuters:

In principle, it’s even harder for a team like this one to learn from its mistakes than it is for an individual to do so. When the world changes, individual technocrats tend to change with it. But when a small, close-knit team is put in charge of running the economic policy of the global hegemon, they create the facts on the ground. In practice, what that has meant is a depressingly predictable cycle of laissez-faire regulatory policy leading to crises, which are solved with massive bailouts, which leave the financial sector largely unscathed, and free to continue taking excessive risks, safe in the knowledge that if and when things blow up again, there will be yet another bailout.

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