World Bank President? White House Holding Tongue

  @DavidZie on February 16 2012 4:31 PM
Christina Romer speaks about the Economic Report at the White House in Washington
Christina Romer, the former Chair of U.S. President Barack Obama's Council of Economic Advisers, is pegged as having a 20% chance of becoming the next Fed Chair. Romer is currently a professor at UC Berkeley. REUTERS

Now that President Barack Obama must nominate a new President of the World Bank, he's keeping his mouth shut, especially in an election year.

Spokesman Jay Carney Thursday acknowledged rumors bids might be extended to Secretary of State Hillary Clinton and former Secretary of the Treasury Larry Summers.

"There's been a lot of speculation in the press," Carney said. "I'm not going to confirm any of it."

There are several wrinkles in what ought to be an easy nomination. For sure, Obama would like to place a Democrat at the World Bank, which lent $57 billion in its last fiscal year.

Zoellick, 58, a Republican appointed in 2007 by President George W. Bush, was well-regarded for having brought stability to the job after the disastrous tenure of Paul Wolfowitz, the former deputy defense secretary. He resigned in a sex scandal.

By custom, the U.S. appoints the World Bank president while Europe designates the director of the companion International Monetary Fund. France's Christine Lagarde replaced Dominique Strauss-Kahn shortly after his arrest for alleged rape in New York. He was subsequently cleared.

The custom is because the U.S. is the bank's biggest shareholder. The candidate must be approved by the board of directors, not the U.S. Senate.

Conceivably, China, the No. 3 shareholder behind the U.S. and Japan, could lobby for its own candidate, marshaling support from other developing country directors.

That could mean a Chinese or developing world candidate such as Singapore Finance Minister Tharman Shanmugaratnam, 55, China's Xie Xuren, 64  or Brazil's Guido Mantega, 62. Over time, it's expected China will become the world's largest economy.

In another era, a prominent banker might be a good pick. Previous World Bank presidents include James Wolfensohn, who came from Wall Street, and A.W. Clausen, CEO of the Bank of America. So Obama-friendly bankers such as Jamie Dimon, 55 of JPMorgan Chase or Roger Altman, 67 of Evercore are probably out of luck.

Bankers are not popular now.

More likely, Obama, 50, will consider people like Timothy F. Geithner. The Secretary of the Treasury, Geithner, 50, who's spent virtually his entire life in government service, never working on Wall Street, including service at the U.S. embassy in Japan.

Geithner has been designated as an "adviser" in the process but there's no reason why he couldn't be chosen. In 2000, Gov. George W. Bush designated Dick Cheney to screen candidates for Vice President and didn't go very far.

Clinton, 64, has no economics background, and Summers, 57, a former Obama adviser, who said "issues of intrinsic aptitude" keep women out of science when he was President of Harvard, might be difficult picks.

Other potential candidates could include,

Sen. John Kerry (D-Mass.), the 2004 Democratic candidate for President. Kerry, 68, has long wanted a seat on the global stage and now serves as Chairman of the Senate Foreign Relations Committee. If he were selected, Gov. Deval Patrick would pick a Democratic successor for his seat.

Christina Romer, 53, professor of economics at the University of California, Berkeley, where she returned following service as Chairperson of the Council of Economic Advisers in Obama's first year.

Romer would be the first woman World Bank chief as well as the first academic.

Joe Biden. The Vice President, 69, isn't going to be U.S. President, so sending him to the World Bank could cap his career as well as give Obama the choice to pick a new running mate. While this would be a huge political shift, Biden, like Kerry, has had years of interest in foreign relations and headed the foreign relations committee in two periods under the second Bush.

Sending Biden to the World Bank might enhance the institution's stature and conceivably shift its mission to 21st century goals. To be sure, Biden lacks executive ability, although as Vice President, he helped shepherd through tricky nuclear arms treaties with Russia.

Michael Bloomberg. The New York mayor, 70, might eye this as a cap to his career after becoming a billionaire on Wall Street via his Bloomberg LP information company, followed by three terms as Mayor of New York.

Bloomberg, whose term expires in 2013, has said he wants to do foundation work but presumably could be enticed to run the World Bank. A Democrat-turned-Republican-turned-independent, Bloomberg might be an appealing choice for Obama, bringing in Wall Street and good government backing.

Richard Levin, 64, President of Yale, is the only economist currently heading an Ivy League institution. Among the Big 10, Morton Schapiro, 58, President of Northwestern University and a distinguished economist, might be a candidate.

The salary:  $441,980 plus $284,500 in other benefits.

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