Obama's not Yellen!

The most significant decision that will impact financial markets in the next few weeks is Obama's choice to replace Ben Bernanke as chair of the Federal Reserve Board.  The two leading candidates are Janet Yellen and Larry Summers.  There could be no better contrast.

While Summers has held various positions in the Clinton White House (including a stint as Treasury Secretary) and was an Obama adviser, he has no direct experience running the Fed.  Summers is a protege of Robert Rubin (Clinton's first T-secretary and a former of chairman of both Citigroup and Goldman Sachs), and it's safe to say he is Wall Street's man.  You can expect business as usual if Summers is appointed; that is, expect Wall Street to maintain its influence over our politicians and economic policy--Bail Outs Are Us!

Yellen on the other hand, is currently vice-chair of the Fed, and she was president of the Fed's San Francisco district bank prior to that.  Yellen is viewed as the more pro-growth advocate, meaning she is less likely to pull the rug out on growth if inflation ticks up past the Fed's 2-3% target.

This folks is the crux of the issue: financial interests want low inflation, which is usually associated with higher rates of unemployment; growth advocates are more concerned about getting unemployment down, and are less likely to worry about inflation if it goes a bit above the Fed target.  The history of the Obama administration has been to kowtow to financial interests, so, if I were a betting man, I'd put my money on Summers.   The choice of Summers will be another indication of which powerful interests pull the strings in this so-called democracy of ours...

Me and my blog

I wanted to start a blog as a place to post my thoughts on economics, politics, and life in general.  As on old (goofy foot) surfer and liberal, the title captures both of those characteristics.  I will try to post something every couple of weeks, or as the moment strikes.  I hope you enjoy it.