Fed Reserve job has a house divided
This week, in a closed-door meeting of congressional Democrats with President Barack Obama, Representative Ed Perlmutter of Colorado walked up to a microphone and bluntly said what has been on many politicians' minds: "Larry Summers. Bad choice."
Obama was visibly annoyed and mounted a defence of Summers, his former economic policy adviser who also served as Treasury secretary under President Bill Clinton. Summers, who the president said had become something of a "progressive whipping boy", appears to be a strong contender to succeed Ben Bernanke as chairman of the Federal Reserve.
With the vigorous attacks on Summers that have erupted in recent days, now his supporters are engaged in a more public campaign to smooth his knotty reputation as being not just brilliant but also bullheaded and brusque.
"It's my experience, and the experience of a lot of people, that he's a great person to work with," said Sheryl Sandberg, the chief operating officer of Facebook, who worked with Summers at the Treasury Department and the World Bank.
Obama is interviewing three candidates for the position at the helm of the central bank: Summers; Janet Yellen, the vice-chairwoman at the Fed who had been considered the front-runner for the job; and a dark horse for the post, Donald Kohn, a former Fed vice-chairman.
In the meeting on Capitol Hill, Obama emphasised that he had not yet made up his mind. Insiders said the White House was trying to damp down the feverish speculation that the race had come down to Summers and Yellen and deflect some of the attacks on Summers.
The White House's first choice for Fed chairman was Timothy Geithner, the former Treasury secretary and Obama confidante, insiders said. The White House approached Geithner to ask if he would be considered for the job, but he declined.
Perhaps no economic official in recent years has a more divergent reputation within the White House and outside of it than Summers. And it is his reputation among economic policy staffers that might secure him Obama's nod.
"You can't find a member of the economic team who is for anyone but Larry," said a person close to the administration. "That's true at Treasury, that's true at the White House. The reason is, Larry has been through this. Larry brings the right skills to bear here."
Summers' detractors have expressed shock that he might be considered for the position. They describe him as an abrasive interlocutor who can be dismissive of ideas, and people, he considers not up to scratch. They also note his arguments for deregulation of parts of the financial industry in the 1990s.
Sheila Bair, the former chairwoman of the Federal Deposit Insurance Corp, argued in a recent editorial that Obama should pick Yellen, because "unlike Larry Summers, Tim Geithner, and other Bob Rubin minions frequently mentioned in the financial press as potential Bernanke successors, she was not part of the deregulatory cabal that got us into the 2008 financial crisis".
Dozens of Democratic members of Congress have publicly thrown their weight behind Yellen, but Summers' supporters, many of whom have the ear of the White House, have pushed back on those objections.
Many consider Summers perhaps the most brilliant economic policy mind of his generation. One former member of the White House economic team has even taken to using a certain shorthand to denote someone of truly superior intellect: "Larry-smart."
His deep understanding of the economy, concern with unemployment and ability to manage complexity would make him a stellar Fed chairman, they argue.
Among academics, Summers was already considered one of the finest economists of his generation before joining public life. He is an "economist's economist", said Lawrence Katz, a Harvard professor who has written several papers with Summers.