Obama as Ringmaster in Fed Media Circus
It's not unusual for presidents to leak the name of a potential high-level appointee to test the waters. That's what President Barack Obama did before he tapped Chuck Hagel to run the Pentagon.
There was an outcry from certain circles because of Hagel's perceived anti-Israel views, but there was no media circus. Nothing even close to the brouhaha surrounding the selection of the next Federal Reserve chairman.
For weeks now, the choice of Yellen versus Summers has dominated the media. That would be Janet Yellen, the current Fed vice chairman, and Harvard professor Larry Summers.
Academics have taken sides. Policy wonks have weighed in.
Congressional Democrats offered unsolicited advice. The White House informed us that former Treasury Secretary Tim Geithner is offering the president his counsel. Thank you for sharing that with us.
Thinking back to the appointment of Paul Volcker in 1979, Alan Greenspan in 1987, and Ben Bernanke in 2006, I can't remember anything like the current nonsense. Only one person can put it to rest, and it's the same person who started it: Obama.
"Throughout history, I have never heard anyone say: "The king is dead, the king is dead, I'll get back to you," said Bob Barbera, co-director of the Center for Financial Economics at Johns Hopkins University.
But that's exactly what Obama did in a June interview with Charlie Rose. Asked if he would consider nominating Ben Bernanke for a third term, the president said: "He's already stayed a lot longer than he wanted or he was supposed to."
No one knew what to make of Obama unscripted. Former Fed Governor Larry Meyer told CNBC that he "almost fell off his chair" when he heard Obama "fire Bernanke on the spot."
Once Obama acknowledged that Bernanke wasn't his guy, it was incumbent on him to get behind another candidate, Barbera said. "He invited a lot more nuttiness than he needed."
He sure did. Last week, Obama chose to defend Summers in a meeting with congressional Democrats, for whom the former Clinton administration Treasury secretary is poison because of his support for deregulation. He threw Don Kohn's hat in the ring as a possible candidate. Kohn, a long-time Fed staffer before he became a governor, was part of Bernanke's inner circle during the financial crisis.
If Obama has made his choice, he should announce it now. If he hasn't, he should sort it out on the golf course next week during his vacation. I can't help but think that if the Yellen-Summers media frenzy goes on much longer, it will be a jinx on both of them.
(Caroline Baum is a Bloomberg View columnist. Follow her on Twitter.)