White House adviser Summers stepping down
WASHINGTON (Reuters) – Brilliant but blunt-spoken White House economic adviser Larry Summers said on Tuesday he will leave his job, marking a major staff shake-up for President Barack Obama as he faces growing pressure to revive the sluggish economy.
Summers, a former Treasury secretary who had grappled with the Mexican peso crisis and other global financial problems in the 1990s, brought years of experience in economic policymaking to his job as director of the White House National Economic Council. Those close to Obama said the president relied heavily on Summers’ advice during the depths of the 2008-2009 financial crisis.
But Summers, who will return to his teaching job at Harvard University by the end of the year, has been criticized by some liberal Democrats as too close to Wall Street. There were also a number of reports of clashes on the economic team within the White House.
The move comes as analysts say Obama needs to signal a fresh course on the economy, with confidence in his leadership on the issue slumping amid predictions of steep losses for his Democratic allies in the November 2 congressional elections.
Obama’s poll numbers on economic leadership are particularly low, with unemployment at 9.6 percent.
Some Democrats say Obama should consider tapping someone from outside the administration to fill Summers’ job. Obama has been criticized for having few businesspeople in the senior ranks of his administration. Some have also urged the administration to name more women to the economic team.
Ann Fudge, former chairman and chief executive of Young & Rubicam Brands, Laura Tyson, a former economic adviser to President Bill Clinton, and Summers’ deputies Jason Furman and Diana Farrell are among those who could be considered.
General Electric Chairman Jeffrey Immelt and Richard Parsons, chairman of Citigroup, are among other names that have been have mentioned.
GEITHNER STILL IN JOB
Summers will be the third high-ranking economic official to depart, leaving Treasury Secretary Timothy Geithner as the sole senior member of that team still in his original job.
White House budget director Peter Orszag stepped down in July and White House Council of Economic Advisers Chairwoman, Christina Romer, left her job at the beginning of this month.
Summers said in a statement released by the White House that he was “looking forward to returning to Harvard to teach and write” about the economy and finance.
Obama credited Summers with having helped to guide the country “from the depths of the worst recession since the 1930s to renewed growth.”
He said he would continue to seek Summers’ “advice and his counsel on an informal basis.”
Geithner described Summers as someone who “always asks the tough questions and forces the hard debate about the best way forward for our economy and for our country,” and said he would also continue to value his advice.
Summers will serve on the president’s Economic Recovery Advisory Board, a panel of outside experts led by former Federal Reserve Chairman Paul Volcker.
In stories leaked to the press, Summers was accused of shutting key people out of meetings, including Volcker, Romer and Austan Goolsbee, a White House economist who succeeded Romer as CEA chair.
In his book, “The Promise: President Obama, Year One,” Jonathan Alter described a heated exchange between Summers and Romer in which Romer told him: “Don’t you bully me!”
During his past role as president of Harvard University, Summers sparked a firestorm after suggesting in an academic discussion that differences in aptitude might play a role in the underrepresentation of women in top science and engineering careers.
The controversy led to his resignation in 2006. He later worked part time at hedge fund D.E. Shaw while continuing to teach at Harvard.
His past role at D.E. Shaw helped to fuel criticisms that he was too close to Wall Street.
Stephanie Taylor of the Progressive Change Campaign Committee called Summers’ announcement a “big victory” for the left and called on Obama to choose as his replacement someone who would be “a champion for regular working folks, not Wall Street tycoons.”
Those who know Summers had long said he was unlikely to stay in his job for more than two years.
“Last fall, the president asked Larry to stay through 2010 in order to see through the passage of financial reform and the continued implementation of the economic recovery program — this announcement is part of a long-standing plan to return to Harvard,” said a senior administration official.
Summers had been mentioned as a possible candidate for Federal Reserve chairman but Obama instead decided to keep on Fed chief Ben Bernanke, who had originally been nominated by President George W. Bush.
(Additional reporting by Steve Holland, Patricia Zengerle, Matt Spetalnick and Alister Bull; Editing by Philip Barbara)
Source: Reuters US Online Report Top News