Larry Summers and the closing of the Obama mind
This is striking:
Mr. (Barack) Obama said last month that he would not announce his choice for the Fed's top spot until the fall, and that he was considering at least three candidates: Mr. Summers, Ms. Yellen and the former Fed vice chairman Donald L. Kohn. But the president's top economic advisers uniformly support the selection of Mr. Summers. They regard him as a creative thinker and an experienced crisis manager, qualities they value in particular because they expect the Fed may confront difficult choices as it begins to retreat from its six-year-old stimulus campaign.
Emphasis added, of course.
Summers is, in the broader world, a lightning rod for controversy. But inside the Obama administration's economic team, he enjoys universal support. This suggests that the economic team around Obama is intellectually closed.
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Uniformity can be useful in some circumstances. When everyone comes around to the same point of view after a vigorous and open debate, uniformity can be a sign of the strength of the merits for that position.
But I haven't seen any evidence that this is how the president's top economic advisors can support Summers. Instead it appears to be something they agreed on from the start, with no real debate at all.
Studies on decision making and conformity suggest that when faced with very difficult questions, people tend to conform their views to those of their peers.
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When everyone is doing this together, this builds up a false confidence in the correctness of the consensus.
Confidence and conformity can be a dangerous combination.
Something like this may be going on in the Obama administration. All the smart economics folks within the administration support Summers because all the smart economics folks within the administration support Summers.
Dissent means you just aren't that smart.
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