Fumbling the Fed job: How Larry Summers lost the media war

Larry Summers has lost the invisible primary for Fed chairman.

The Wall Street Journal’s David Wessel had the scoop yesterday afternoon that the former White House aide and Treasury secretary had called President Obama to bow out as a possible nominee. Wants to avoid an “acrimonious” confirmation process and so on.

Which is another way of saying that Summers had lost the support of several key Senate Democrats and couldn’t even arrange a meeting with Elizabeth Warren.

As I noted in a past MediaBuzz column, I’ve never seen a shadow campaign like this for chairman of the Federal Reserve. Through leaks and blind quotes, supporters of Summers and Janet Yellen, the current vice-chairman, have been duking it out in the press.

Summers seemed to be more aggressive, while Yellen hung back, and for a time it seemed (based on those all-knowing “sources”) he was on the verge of getting the coveted nomination.

But those who a) don’t like him, b) don’t think he’s right for the job or c) think it’s time for a woman were trying to torpedo a Summers nod. And now they’ve succeeded.

For critics, the Journal reported, Summers “became a symbol—a caricature, his admirers say—of all the failures of financial regulation that they said led to the devastating financial crisis.”

What his detractors did was raise the price of a Summers nomination by trumpeting his liabilities, which include his reputation for abrasiveness.

Summers isn’t the first person to lose a presidential appointment in the media—Susan Rice comes to mind—but he is one of the highest-profile figures to be defeated in such a fashion.

It’s Still the Economy, Stupid

The White House is getting ready to pivot.

I know this because I spent yesterday on the phone with Gene Sperling.

It wasn’t just me; the outgoing White House economic adviser was doing a conference call with reporters.

After focusing heavily on Syria—capped off by his George Stephanopoulos interview yesterday—President Obama is doing the economy this week. He and his team are jumping on the fifth anniversary of the financial crisis to claim credit for getting the country back on track—and to push back against House Republicans who might be “using the threat of default as a tool or tactic,” as Sperling put it.

Toward that end, Obama is giving another TV interview on Tuesday, with Jose Diaz-Balart of Telemundo. That one will focus on the middle class and immigration, a White House official said.

Critics will undoubtedly challenge Obama’s latest effort to toot his horn on the economy. What Sperling was trying to do was kickstart some stories in the Monday morning papers.

With Syria likely to fade from the front pages, at least temporarily, the administration is trying to remind folks of the bad old days.

“We came back from the brink,” Sperling said. “We avoided a second Great Depression.” But “we all agree we’ve got a lot further to go.”

In his talking points with reporters, Sperling cited the unpopular TARP program (passed under George W. Bush), which he said has netted a $28-billion profit for the taxpayers. He said banks have doubled their capital reserves and that Obama’s auto bailout has led the Big Three car companies to their first profitable year in nearly a decade. (Sperling did not mention that Detroit is bankrupt.)

His bottom-line message was aimed at the GOP: Let’s not go “backwards” through the “self-inflicted wound” of debt-ceiling politics in the coming weeks. Obama declared again on ABC that he will not negotiate over the debt ceiling. But John Boehner, who doesn’t want to play shutdown politics, does not control his caucus on this question.

Administration officials recognized that the media would be doing Five Years After stories (Time cover: “How Wall Street Won”) and figured they’d better get in on the game. So Obama will address a handpicked audience of those who have benefited from his policies on Monday, speak to the Business Roundtable on Wednesday and visit a Ford plant in Kansas City on Friday.

Most of the public didn’t want any part of Syria. Obama has little choice but to win them over on his stewardship of the still-anemic economy.

Shield Law Would Protect Some Reporters (But Not All)

Who is a journalist?

That seemingly existential question is at the heart of a battle that could determine who is vulnerable to prosecution for stories relying on unnamed sources.

And given the Obama administration’s track record on going after journalists, this is no theoretical question.

Congress is wrestling with a shield law that gained some momentum after the administration was embarrassed by disclosures that it engaged in sweeping surveillance against the Associated Press and Fox News correspondent James Rosen. That prompted Eric Holder to say gee, fellas, maybe we ought to have a federal shield law, even though we haven’t pushed for one in more than four years in office.

The Senate Judiciary Committee approved a measure late last week that, except in some circumstances, would protect journalists from having to divulge their confidential sources under threat of prosecution. But who exactly qualifies?

Well, you have to be an “employee, independent contractor or agent of an entity that disseminates news or information.”

And you have to have been employed in such a capacity for one year out of the last 20, or three months out of the last five years. Or be a student journalist.

In other words, as Dianne Feinstein put it, “real reporters.” (Or someone designated as eligible by a federal judge.)

Guess who would be excluded? Outfits like WikiLeaks, which exist mainly to dump out “primary source documents.”

Some bloggers are ticked off, saying they shouldn’t have to be tied to an organization to qualify if they are engaged in the act of journalism.

I’m sympathetic to the notion that an overly narrow definition can exclude people who are essentially functioning as reporters without the corporate backing. At the same time, the law is meaningless if anyone can simply declare himself a journalist after the fact.

Matt Drudge has disdained the whole approach, tweeting: “Gov’t declaring who qualifies for freedom of press in digital age is ridiculous! It belongs to anyone for any reason. No amendment necessary.”

Under the bill, which passed the committee 13 to 5, even covered journalists could be forced to divulge sources if they had information that could stop such crimes as murder or child abduction, or prevent terror attacks or damage to national security. (That last one sounds pretty broad, given the tendency of people in power to stretch the definition.)

Even if the Senate passes the bill, there’s no indication that the House will go along. But at least a serious debate about the rights of journalists is under way.