Larry Summers' opposition to regulation of derivatives, as well as his support for the financial deregulation and complex financial instruments that led to the 2009 crisis, should disqualify him from being the Federal Reserve chair.
Further, during Larry Summer's time as Harvard University president, he entered into interest rate swaps to protect nearly $2 billion in debt, losing almost $1 billion on the deal.
Hiring Summers for the Fed puts either a fox, or the world's most gullible hen, in charge of the henhouse.
A much bigger problem than the Fed is "structural change," econ-speak for the results of changing the rules of work and trade.
Isn't technological change part of structural change?
Yes, but in the past, the benefits of such changes were spread broadly through society. Today, productivity benefits flow disproportionately to companies, and much new hiring is overseas.
Companies were happy to take advantage of China's manipulated currency, which somehow valued its workers at a fraction of U.S. workers. Now, there is talk that China's currency, backed by the money that companies sent there, could displace the dollar as the world's reserve currency.
The new Fed chairperson may have a few challenges ahead.
Frank
Stoppenbach
Red Hook
