Secret Campaign for Chairman of the Federal Reserve
There’s a lot that divides Americans these days, but if there is one unifying idea, it must be that people are sick to death of political campaigns. Our toxic campaign culture, dominated by negativity, has soured vast swaths of the populace to all things political.
So it’s more than a little ironic that the poisonous qualities of our multibillion-dollar campaign are seeping into ever more areas of public discourse. And the battle over the next chairman of the Federal Reserve is a perfect example of campaign weaponry deployed for zero public good.
Of 316 million Americans, probably fewer than a couple of thousand really grasp what qualities are needed to make a superb Fed chairman. Given President Obama’s background—law and community organizing, not business or economics—there’s no real reason to expect him to be among those most informed. But no one can really argue that the president of the United States should not be allowed broad discretion in selecting the chairman of the Federal Reserve.
To put the appointment process into perspective, since the creation of the Federal Reserve Board in 1913, no presidential selection of a chairman has ever been rejected. That’s a 100 percent success rate over a 100-year precedent, so the odds really aren’t bad.
But for reasons that are utterly baffling, somehow this White House has managed to turn what should be a routine presidential decision into a tumultuous public debate. This is not the selection of a Supreme Court justice who could rule on profound questions affecting every American. But the technocratic and obscure nature of the Fed position hasn’t stopped those with a favorite candidate from trying to turn the appointment into a bloody public battle, the Borking of the Fed.
Today government at the highest levels is filled with campaign veterans eager to use their dark skills. In campaigns, particularly at the upper echelons, the delivery of negative information about an opponent is considered an art form. The favored weapon of choice is the leak backed by a bit of opposition research. And now, with an almost casual ease, the information system is filling with waves of negative hits on Larry Summers and Janet Yellen.
It really is the golden era of the leak. The Internet and cable channels provide more outlets for negative information than ever before, with fewer controls and checks. There are endless blogs, of course, which don’t pretend to adhere to any journalistic standards but are still wildly useful for disseminating information. But every “legitimate” news organization is operating with fewer editors working with a reduced number of reporters under increasing pressure to produce more and more “content.”
In a recent paper for Harvard’s Shorenstein Center, CNN reporter Peter Hamby recounts how he and a reporter for BuzzFeed, Zeke Miller, were given the same tip at the same time. Hamby writes: “It took Miller’s story just four and half minutes to be checked by an editor and posted on BuzzFeed. The competing CNN.com story showed up online 31 minutes after that.”
It is difficult to do journalistic due diligence on a story in 31 minutes; it’s impossible in four and a half minutes. In theory, the weight of a credible news source like CNN, a pioneer in 24-hour news, should be greater than that of a website like BuzzFeed, a pioneer in cat videos. But in the real world, negative information, once it enters in the bloodstream, has virtually the same weight, regardless of the delivery system. Or as Matt Rhoades, Mitt Romney’s campaign manager and an expert on opposition research, put it in Hamby’s paper: “A link is a link.”
In campaigns, you quickly learn that “news” doesn’t have to be new. With a bit of lipstick, you can sell and resell the same pig over and over. During the 2012 presidential campaign, The New York Times wrote about Mitt Romney putting a family dog in a pet carrier on the roof of a station wagon far more than it did about any number of serious issues like gun control or the minimum wage. There was nothing new about the dog story, but the Obama campaign was pushing it, even releasing a photo of the president’s dog, Bo, in the presidential limousine with the caption “This is how responsible pet owners treat dogs.” That’s high-gloss lipstick, but the pig is the same.
In the furious back and forth of negative Fed chairman stories, there have been no real revelations. We are reminded that Summers doesn’t think women are great at math and that a lot of really wealthy Wall Street types think Summers is a better choice because, well, he’s more like them.
But campaign pros understand that even old “news” works effectively when it promotes an easily understood narrative that resonates with a segment of the electorate. In the case of the dog, the narrative was that Romney was “mean,” never mind that the source of the story was one of his sons ribbing his dad about an incident of harmless family lore. For Obama, it’s the underlying thread that he has never taken women seriously enough in an administration dominated by strong males (Hillary Clinton notwithstanding).
For a president who talked about bending the arc of history, being accused of sexism is a troubling stain on his legacy. So when the administration leaks that it is considering appointing Lael Brainard to sit on the Federal Reserve’s board of governors, the news is immediately seized on as a balance to the likely snub of the female Yellen for the male Summers.
And that’s exactly what’s wrong with allowing a Federal Reserve chairman’s nomination to be played by campaign rules. Modern campaigns rarely elevate any subject and have a terrible tendency to demean all who participate. If Yellen is the nominee, her appointment will now be seen as a triumph of her gender, not her ability. Brainard could be an outstanding Fed governor, but now she’s the female pawn to block a checkmating charge of sexism. If Summers is our next Fed chairman, inevitably there will be allegations that his powerful, largely male supporters managed to play the sexist card against the formidable Yellen. Everyone is hurt and the authority of the next Fed chairman is weakened.
Ours is probably a lousy way to elect presidents but difficult to change without sweeping reforms. But it’s easy for a president to act like he’s running a country and not a campaign. It was counterproductive and weak of Obama to “float” the names of Yellen and Summers to see how they would fare in the court of Insider Opinion. Obama likes to remind people he won the election, which is fine, but we’d be served better if he had absorbed a few lessons about executive leadership.
The president needs congressional confirmation for his Fed chairman, but anyone he is seriously considering will pass. He doesn’t need the approval or affirmation of the D.C.-N.Y. power structure. He just needs to make up his mind. And for Obama, these days that seems to be a challenge. The campaign’s over. Time to govern.