For what may be the first time in the 100-year history of the Federal Reserve System, two candidates are publicly contending to replace the Fed’s outgoing chairman, Ben Bernanke.
Janet Yellen, vice chairwoman of the Fed’s Board of Governors, is said to be locked in a dead heat with Larry Summers, former President of Harvard and a former high-ranking economic adviser to Presidents Clinton and Obama.
As is the case in electoral politics, the contest between Yellen and Summers has included dirty campaigning — with supporters of Yellen accusing Summers of sexist behavior as Harvard President. They also point out that Mr. Obama would make history by appointing Yellen to be the Fed’s first female chairman.
In substantive terms, there’s not much difference between Yellen and Summers. Both of them support the Keynesian model of economics in which debt-driven government spending is seen as the key to expanding the economy.
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