The withdrawal of Larry Summers from consideration as Fed Chairman is part of a larger rift between Wall Street and the Democrats, according to a recent column in the Washington Post Harold Meyerson.
He writes, "After two decades in which the party has moved leftward on social issues but has largely accepted the financial sector’s economic preferences — for smaller government; a greater role for markets; and reduced regulation, particularly of finance — the abject failures of the market economy are pushing the party leftward."
That's too bad. The Dems are right, obviously, that Wall Street never got its full comeuppance for the 2008 financial debacle. They are also right that income inequality is going to be the defining economic issue of the next generation. But the Dems' policy toolkit on these issues is typically shrill and populist. (What has the 1% movement accomplished lately?)
Politics would be better served with a new generation of center-left Wall Street types who care about the overall social fabric of the country but also realize that markets, good government, and fiscal sanity are essential tools for making everyone better off.