Tuesday, August 20, 2013

Oh Boy! This Is Fun. The Catch-22 Of Being Janet Yellen.

This new WaPo article on why Janet Yellen is probably not the president's choice for the next chair of the Federal Reserve is fantastic!  It's hilarious!  It's a perfect example of the Catch-22 that Yellen must struggle under.

Take the argument that Yellen is not a team player and what's needed for the chair of the Federal Reserve is a team player:

Yellen has a perfectly solid relationship with Bernanke, as best as I can tell, but she’s more of her own thinker within the institution. She has spent her time as vice chairwoman urging Bernanke and her other fellow policymakers to shift policy to try to do more to combat unemployment, and thinking through ways to do just that. She even had one economist who functioned for a time as something of a de facto chief of staff, Andrew Levin. And people dealing with her within the Fed have viewed her not so much as Bernanke’s emissary but as her own intellectual force within the organization.

So what does that have to do with how Obama’s advisers might view her? They are big on the team player concept, people diving in together to sort through the hard and messy challenges they face.

Mmm.  By inference, then, Larry Summers, the apparent candidate for the chair, IS a team player.  But if you dig back in the murky archives of time, you come across comments like these:

What has all this to do with Larry Summers as a potential Secretary of the Treasury in the Obama administration? It depends on how much of the job involves what are usually called “people skills,” the skills that bring men and women of diverse views together in a spirit of optimism and co-operation (two words Obama has often invoked). A cabinet secretary must interact with other secretaries, with the White House staff, with the vice president, with congressional committees, with leaders of industry, with the representatives of other sovereign states and with the media.
It is not a question of intelligence and competence -– everyone agrees that Summers is very smart and very accomplished as an economist; it is a question of tact, patience, poise, self-restraint, deference, courtesy and other interpersonal virtues. Little that he did as president of Harvard suggests that Summers possesses these virtues.

And like these:

In the first world, you're going to read a lot of stories about how Larry Summers was a meanie who rendered the economic team dysfunctional and impeded the Obama administration's efforts to revive the economy. In the other, you're going to read a lot of stories about how the famously prickly Larry Summers managed to keep his ego in check and leverage his considerable brilliance to help the Obama administration save the American economy. 

So Janet Yellen is looking in from the outside, as the WaPo article states, while Summers is inside, manically participating in everything!  Which reminds me of the role of the outsider in all sorts of groups.

But never mind, what the situation truly needs is a person who doesn't prepare, who isn't meticulous but who just jumps in:

A second, and related, reason that Yellen’s leadership style isn’t a great mesh with the Obamaites is also one of her strengths. She is always meticulously prepared, a careful and systematic thinker who chooses her words carefully. In a Fed policy committee meeting or a gathering of international central bankers, she typically scripts herself in advance and reads those prepared comments.
She is methodical, not manic. And the prevailing style of the White House insiders advising on the decision leans a bit more toward manic. Geithner, for example, jumps from meeting to meeting, from hearing to phone call, without so much as a set of talking points to work from. The question is how Yellin’s cautious approach would work when she is dealing with the full panoply of issues that a Fed chair must grapple with.

But if Yellen was manic, unprepared and willing to jump about like a rabbit, what would her flaws be then?

That's why I see all this as a Catch-22 case for poor Janet.  She is damned if she does, damned if she doesn't, and that's because both of these arguments can be built to be whatever they need to be afterwards, once the choice already is for Larry Summers. 

Just find whatever he has and she does not,  as the thing that is needed!  Hence we come up with the argument that it's bad to be prepared and meticulous, while running the Federal Reserve!  Or that it's bad to be independent, in a position for which independence is usually a desired characteristic.

Atrios titles his post on this topic as "Bros B4 Hoes," and that's one possible take on the topic.  It's not the only possible one, because a similar outcome could be reached when one camp defends its homeboy against the homeboy of the other camp.  Still, given the general reputation of Summers, defending him against Yellen also produces a kind of Catch-22 when it comes to questions of gender.

A general note:  This post is not about which candidate actually might be better at the job.  It's about the conversations we have about them.