Friday, July 31, 2009

Willem Buiter Meltdown

Wow. Willem Buiter, in another impressive display of his own self-consciousness, absolutely unloads on Ben Bernanke and Larry Summers. Being provocative has been part of Buiter's shtick for years, but I'm beginning to think he simply has a Matt Taibbi-like inferiority complex. Now he's claiming that Bernanke answering questions from the public is a threat to Fed independence, and that Larry Summers isn't a serious scholar. You can say lots of things about Summers, but you can't say that he's not a serious scholar. This is getting embarrassing to watch.

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No, I have to disagree here. He is not saying that Summers is not a serious scholar, but rather that he has not done research on subjects relevant to a Chairman of the Fed. If you have read Summers' papers, you know this is true. The comparison is obviously based on *academic* qualifications, since both Bernanke and Yellen were outstanding researchers in their previous lifes, and Yellen has down work on subjects other than strictly macro.

The case against Summers rests however on his past as a decision maker. David Warsh has a damning piece on Summers. And I agree with Felix Salmon when he says that, whenever we had a chance to observe Summers' analyses of current events, as in his columns for the FT, they have been a collection of trivialities.

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Rara is right. And Summers, from my point of view, has demonstrated extremely poor judgment. I don't want him anywhere near the Fed. And I'm not alone.

Indeed, the fact that Obama picked Summers to stand close to him was an early indicator that there would be no real change, from my vantage point. And that has come to pass in spades.

If he appoints Summers, I may have to work on getting an EU passport. No lie.

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