After President Obama's apparent No. 1 pick Larry Summers withdrew from being considered for the Federal Reserve chair, many speculate that Janet Yellen is likely to be the next (and the first female) chair. But let's not forget yet another name Obama mentioned in July: Donald Kohn.
Donald Kohn, 70, is a former vice chairman of the Board of Governors of the Federal Reserve who retired in 2010. As the Washington Post puts it, however, Kohn "has stayed in the game." Since leaving the federal reserve system where he worked from 1975, Kohn served as a member of Bank of England's Federal Open Market Committee, worked as a senior fellow for economic studies at Brookings Institution, and was a senior economic strategist at Potomac Research Group.
Described as the "right-hand man" of Ben Bernanke and his predecessor Alan Greenspan, Kohn reportedly "helped Greenspan manage the 1987 stock market crash." But he also faced criticism for supporting the Greenspan Doctrine, which is the "view that modern, technologically advanced financial markets are best left to police themselves." This proved to be wrong in the financial collapse of 2007.
Generally, Kohn is "known for his caution." His statements of approval signified that everything had been evaluated. While Americans need this caution and stability in today's economic stagnation, what would Kohn say about current economic problem? In a recent interview, Kohn said too big to fail issues as well as transparency need to be addressed "to even have a chance" at the U.S. achieving financial stability. Unless such holes in financial regulation are filled, Kohn is "not very optimistic."
Putting his past work aside, Kohn could bring a different dynamic to the Federal Reserve, which he states "must never be a political instrument." Unlike Summers, Yellen, or Bernanke, Kohn neither served in a president's administration nor worked in academia.