This afternoon, President Obama is going to officially nominate Federal Reserve Vice Chairwoman Yellen to replace Ben Bernanke as chair of the bank when Bernanke steps down in January 2014. Yellen, 67, has been in her current job since 2010 when Obama nominated her and she was easily confirmed by voice vote in the Senate.
Though Senator Bob Corker (R-TN), a member of the Senate Banking Committee, voted against her then because of what he called “her dovish views on monetary policy,” this morning he told CNBC that she’ll likely be confirmed.
The appointment will make Yellen the most powerful woman in U.S. history and the only woman heading up a central bank in a major economy. (Russia, Malaysia and South Africa have female central bankers.)
Conservative outlets like Drudge, RedState, The National Review and The New York Post have had nothing to say. Forbes seems to be the lone voice against Yellen so far, with a long piece posted last night by Op Ed editor John Tamny that is more a critique of the Federal Reserve Bank as an institution than it is of Yellen in particular. “The citizenry should fear Yellen simply because she wanted to run the Fed,” he writes. “She wanted to run an entity that’s always been wrong.”
The Wall Street Journal’s editorial page has yet to weigh in. So far there are just news reports about how the markets and the dollar are reacting (markets were wavering and the dollar rose), and a piece about how the Yellen nomination is good news for Asian economies, because the Fed is likely to continue its $85-billion-a-month bond-buying program, which would keep borrowing costs down, a boon for Asia.
At Bloomberg, University of Michigan public policy and economics professor Justin Wolfers has an effusive piece entitled “Why I’m Very Happy About Janet Yellen,” about how she is more qualified than any of her predecessors, having been a member of the Fed’s Board of Governors, president and CEO of the San Francisco Fed, chairman of the Council of Economic Advisors under President Clinton and a respected economist at U.C. Berkeley. “She’s an imaginative and technically adept economist possessed of a brilliant and precise mind,” he writes, praising her advocacy for more stimulus and her understanding that the risk of inflation remains low in this struggling economy. Had she been in charge of the Fed over the past few years, he writes, there would be fewer jobless Americans and reduced concerns about deflation.
Likewise at Slate, Matthew Yglesias praises her nomination, writing that compared to Bernanke, her long list of qualifications “blows him away.” She has “a level of experience that’s unprecedented in the history of the system.” Like Wolfers, he praises her understanding that there is little danger of inflation at this point, even if the Fed keeps stimulating the economy.
While Yglesias’ piece compliments Yellen with a list of six things the reader should know, The Washington Post goes farther, with a list of nine “amazing facts.” Among them: her advocacy for the unemployed. She can also be hawkish about inflation, the Post observes, pointing to her position as a Fed governor in the ‘90s when she cautioned that unemployment was low enough that inflation could rise. Another reason she should be lauded: She has a great record on predicting the direction of the economy. In 2007, for instance, she was one of the few voices at the Fed warning of a credit crunch and recession. When it comes to regulating the financial sector, Yellen wants to set tough capital requirements for banks and while she doesn’t want to break up existing institutions, she favors regulations of “shadow banks” that aren’t governed by current rules.
At The New Yorker, financial writer John Cassidy also has a favorable piece, underlining how important it is that Yellen, as a woman, will get the Fed chairman’s job. Though he says she hasn’t been a superstar economist like her husband, George Akerlof, who shared the 2001 Nobel prize, and her achievements have been overshadowed by Bernanke and former Fed chair Alan Greenspan, she is a great role model for women, because throughout she has proved her intelligence, technical expertise, creativity, and her ability to cooperate with others and work hard. Cassidy reminds us that last month, when it looked like former Treasury Secretary Lawrence Summers would get the job, a group of prominent women economists including Alice Rivlin, Christina Romer and Laura Tyson along with some 200 other economists, many of them men, signed an open letter calling for Yellen’s appointment.
The Yellen news is also spawning some great stories about her life up until this point. The New York Times has a long profile today, noting that she will be the first Democrat to lead the Fed in nearly three decades and describing how her views on monetary policy put her more in line with centrists than liberals. “She was instrumental in the Fed’s decision last year to declare a target of 2 percent annual inflation,” says the Times, “and has shown only a very limited willingness to tolerate higher inflation.”
Yellen’s background is also interesting. The Times describes how she was born in Brooklyn and grew up in middle class Bay Ridge, daughter of a teacher who stayed home to raise her and her brother, and a family doctor who saw patients in his home office. She went to Fort Hamilton High School and then Brown, where she fell in love with economics, and then to Yale for her doctorate. Throughout her career Yellen has been a Keynesian, believing that people often act irrationally, that markets are imperfect, and that government must step in to set things right. As the Times notes, she gave this quote in 2012 to U.C. Berkeley’s business school magazine: “While admirers of capitalism, we also to a certain extent believe it has limitations that require government intervention in markets to make them work.”
