By James Saft
(Reuters) – If you got me at gun-point, backed me up to the edge of a high cliff and forced me to choose between Larry Summers and Tim Geithner as the next Federal Reserve Chairman, I think I might jump.
And yet, the two former Treasury secretaries are the third and fourth favorites in the running for the job, according to Irish bookmakers Paddypower. (here)
Summers, at odds of 5.5 to 1, and Geithner, at 14 to 1, are still relative outsiders, with Federal Reserve Vice Chairman Janet Yellen the 1 to 4 favorite to take over if, as expected, Ben Bernanke steps down at the expiration of his term in January.
I can think of no-one, with the possible exceptions of Robert Rubin and Alan Greenspan, who are more closely identified than Summers and Geithner with the errors of financial leadership of the past 15 years. And should either get the top job it would send a clear signal that efforts to properly regulate finance will come to very little, and that the chances of yet another in the long succession of crises are getting larger.
First Summers, who has a history of working to water down or make ineffective financial regulation dating back at least to his opposition to derivatives regulation and support for the dismantling of Glass-Steagall in the late 1990s.