Larry Summers can keep a whip count, even if the president can’t.
When a fourth Senate Banking Committee Democrat, Jon Tester of Montana, came out against the 58-year-old Harvard economist’s presumed candidacy for Federal Reserve chairman, Summers did the math and withdrew his name from consideration.
Until then, Summers was reportedly President Obama’s choice to take over from Ben Bernanke in January. But it was Summers who acknowledged, in a letter to the president, the reality of his nomination prospects in light of liberal opposition: Any confirmation process would be “acrimonious” and would damage the president.
Obama’s months-long flirtation with a Summers candidacy probably hurt his standing with his liberal base, even if it was never made official.
Of course, liberals have more reason to be disappointed with Obama than merely his continued faith in Summers, whom they view as a captive of Wall Street, a leading proponent of deregulation and an abrasive and incendiary character. Obama has provoked the Left on matters of national security, including his efforts to intervene militarily in Syria.
His approval rating has dipped to near 40 percent over the last few weeks, and his approval among Democrats has fallen by 10 percentage points since his inauguration, by the RealClearPolitics poll average.
But it's the Fed nomination that liberal activists and lawmakers were able to influence. They did so with an aggressive and sustained effort to end Summers’ candidacy before it officially began. Their refusal to go along with the president’s choice would have put Obama at the mercy of a handful of Banking Committee Republicans just as the president was preparing for a series of high-stakes budget negotiations with the GOP.
It also meant that Summers, a fixture of the Democratic Party establishment for two decades, would not get the position of economic influence he had sought — and one of the few he has not held.
Summers was the director of Obama’s National Economic Council from 2009 to 2010. Before that, he served as president of Harvard University. He was Treasury secretary under Bill Clinton. And he was chief economist of the World Bank in the early 1990s.
But now, despite having pulled every string with Obama and Democratic senators, Summers will not be Fed chairman, an office that has grown more powerful since the passage of the Dodd-Frank financial regulation reform law.
Which means that Summers can go back to making money. He had canceled speeches and other events with Citigroup in recent weeks while his name was under consideration for the Fed job, but now he can resume his business with the bank and the small number of other financial firms he has consulted for since leaving the White House. But Summers was ready to give up millions if he could run the Fed.