6 Things You Need to Know About the Woman Who May Soon Be the Most Powerful Economist on Earth

[BridgeTheGap]

(there is still the issue of whether the Federal Reserve should have the power to set monetary policy or it should be done via a strictly governmental body. That said, Yellen appears to be a far better pick than Summers - btg).
With Larry Summers knocked out of the running for Federal Reserve chair, attention has turned to Janet Yellen, considered his main rival for the job. So far, what most Americans know about her is that she is not Larry Summers, which is no small point. Summers is a crony capitalist with strong ties to Wall Street, a history of poor judgment and multiple conflicts of interest that make him uniquely unsuited to lead the Fed. That he will not should be a relief to all.

But who is Yellen in her own right? Let’s take a look at the woman who could end up becoming the most powerful economist on the planet.

1. Yellen has an impressive resume.

Janet Yellen grew up in Brooklyn, where her dad was a doctor. She got a bachelor's degree in economics from Brown University, followed by a Ph.D. in economics from Yale University where she studied with Nobel laureate and progressive icon Joseph Stiglitz. Her professor recently praised her in a New York Times op-ed, “ Why Janet Yellen, Not Larry Summers, Should Lead the Fed” as “one of the best students I have had, in 47 years of teaching at Columbia, Princeton, Stanford, Yale, M.I.T. and Oxford.”

Yellen has taught at Harvard (1971-'76) and the London School of Economics and Political Science (1978-'80). Since 1980, she has been a faculty member at Berkeley. As a scholar, Yellen has written on a wide spectrum of macroeconomic topics, but her specialty is the causes, mechanisms and implications of unemployment.

http://www.alternet.org/economy/janet-yellen-and-federal-reserve?akid=10951.260941.VE8OB5&rd=1&src=newsletter898439&t=5

[elleng]

1. Why Janet Yellen, Not Larry Summers, Should Lead the Fed.

by Stiglitz, NYT:

Whoever succeeds Ben S. Bernanke as the Fed’s leader will have to make repeated judgment calls about when to raise or lower interest rates, the levers of monetary policy.

Two elements enter into these judgments. The first is forecasting. Wrong forecasts lead to wrong policies. Without a good sense of direction of where the economy is going, one can’t take appropriate policies. Ms. Yellen has a superb record in forecasting where the economy is going — the best, according to The Wall Street Journal, of anyone at the Fed. As I noted earlier, Mr. Summers’s leaves something to be desired.

Ms. Yellen’s superlative performance should not come as a surprise. Janet Yellen, whom I taught at Yale, was one of the best students I have had, in 47 seven years of teaching at Columbia, Princeton, Stanford, Yale, M.I.T. and Oxford. She is an economist of great intellect, with a strong ability to forge consensus, and she has proved her mettle as chairwoman of the President’s Council of Economic Advisers (she succeeded me in that role), as president of the Federal Reserve Bank of San Francisco, from 2004 to 2010, and in her current role, as the Fed’s No. 2.

Ms. Yellen brings to bear an understanding not just of financial markets and monetary policy, but also of labor markets — which is essential at a time when unemployment and wage stagnation are primary concerns.

http://opinionator.blogs.nytimes.com/2013/09/06/why-janet-yellen-not-larry-summers-should-lead-the-fed/

[Fantastic Anarchist]

2. This article is reassuring.

I appreciate you posting as I admit I didn't know much about her.

One cause for concern was her tentative acceptance of deregulation back in the 90s, and I'm not sure the article adequately explained her position other than she went along to get along.

However, much of the article seems to show her in a positive progressive light. I like her focus on unemployment instead of inflation as economic policy - so that's a plus. As it stands, out of the field, she's probably the best we're going to get.

[ColumbusLib]

3. Thanks for the link

Good to know all this, really fleshes out the 'at least she's not Summers' point of view to something more meaningful.

[bvar22]

4. I now know more about Yellen than I did yesterday.

"Not Summers" wasn't enough to win my active support by default.
A positive endorsement from Alternet does have some weight with me.


DURec!

[seabeckind]

5. I'm really torn by this issue

Yes, she has wonderful credentials that would help to move the economy forward.

The question most pressing to me is forward to what? The fed is not a gov't entity. It does actions with a particular goal in mind and is driven most strongly by the financial markets.

But what if those financial markets are contrary to the best interests of our nation? What then?

Will the chairperson of the fed make a decision which is good for the nation to the detriment of the financials? Up the this point the answer has been a resounding NO. Ref the stock market the last couple days and its performance during our "downturn".

Eg, a modest inflation rate is good for the common worker, as is a reasonable interest rate. Most common workers have little in the way of investments (please don't throw that 401 canard at me -- it's a crock) and so they stand to lose little of their assets as the money becomes less valuable. But, their wages will go up (assuming that investors invest in this country -- another fed influenced incentive), their home will become more valuable, their auto won't depreciate as quickly, etc. And as long as the regular savings interest rate exceeds the inflation rate they do ok with what little they can save. Because most common workers don't have Merrill-Lynch on speed dial.

But our last few fed people have avoided inflation like a case of herpes. And don't even think about raising the cost of their borrowing from the taxpayer...my god, there'd be people flying from tall buildings.

The second issue I have is the whole mindset of economists today. She is a Harvard person... I don't expect her mindset differs much from any other Harvard people (Obama?).

Lastly, she's a fed personnel. She's an insider. Will she make a decision which might be good for our nation at the expense of her ex-coworkers and those who have signed her paycheck these last years?

Perhaps in searching for a replacement for Bernanke (for whom I have no respect at all), we might be looking for love in all the wrong places.

Maybe instead of a friend to the financial industry we might look for a known adversary. One who has been on the outside and sees the internal rot and is willing to excise it for the good of our country.

When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes… Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” – Napoleon Bonaparte, Emperor of France, 1815

[seabeckind]

6. To expound a little...

"The fed is not a gov't entity"

That means the only control we have thru our elected officials is the appointment of this person. At that point we have no control. At all.

In the past we have seen this person sit in a closed meeting with our Treas Sec and discuss how they would use our money to provide a safety net for their special interests.

Perhaps it might be time, well past due, to follow Andy Jackson's advice.

[BridgeTheGap]

7. I think you raise a valid concern, as I did when I posted this.

The audit of tarp funds revealed just what kind of chicanery the FED can engage in.

[golfguru]

8. Fed has done diddly squat for middle class

during the reign of Bernanke. The top 1% have benefited, middle class is stagnant or deteriorating, and the poor are still poor and growing in numbers. Wall Street is doing great, which benefits the rich.

How is Yellen going to be different than Bernanke?

[upi402]

9. "The country has before it one candidate who played a pivotal role in creating the economic problems

"The country has before it one candidate who played a pivotal role in creating the economic problems that we confront today, and another candidate of enormous stature, experience and judgment."

http://opinionator.blogs.nytimes.com/2013/09/06/why-janet-yellen-not-larry-summers-should-lead-the-fed/?_r=0