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Yellen should be approved quickly

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From page A8 | November 21, 2013 | 5 Comments

The issue: Highly qualified nominee is the right choice to head the Fed

The head of the Federal Reserve board is one of the most powerful and, outside of financial circles, least known officials in the U.S. government.

THE FED, an independent agency that jealously guards that independence, has $3.8 trillion in assets, sets interest rates and, since the recession, has an open license to intervene in the economy.

The Fed has two mandates that can easily come in conflict — maintain a stable currency, which basically means keeping inflation under control, and try to combat unemployment.

The Fed chair’s semi-annual appearances before Congress — one day each for the Senate and House — are major economic events with the central banker’s testimony closely monitored worldwide.

It’s a safe bet that few Americans have heard of Janet Yellen and even fewer could recognize her, but after a two-hour confirmation hearing before the Senate Banking Committee, Yellen, President Obama’s pick to lead the Fed, seems assured of Senate approval, despite a handful of dissenters.

She would succeed Ben Bernanke, who will step down Jan. 31 after eight years on the job. Yellen, 67, indicated that she would continue Bernanke’s policies that are heavily weighted toward stimulus — super-low interest rates and the monthly purchase of $85 billion in bonds.

Yellen indicated to the committee that she is on board with Bernanke’s plan to keep interest rates near zero until the jobless rate, now 7.3 percent, falls to 6.5 percent. The bond-buying program seems likely to remain in place at its current rate until at least March. Whether to continue it and how long will be one of Yellen’s first major decisions as chair.

HER TESTIMONY before the committee cheered stock markets here and abroad, especially in Asia, where major indexes rose sharply, in some case to record highs.

Yellen has the résumé for the job. Her academic credentials include Harvard, the London School of Economics and UC Berkeley. She was a governor of the Federal Reserve System before becoming chair of President Clinton’s Council of Economic Advisers. From there she became president of Federal Reserve Bank of San Francisco before becoming vice chair of the national Federal Reserve system in 2010.

The Banking Committee may approve her nomination as early as this coming week. When the time comes, the full Senate should confirm her quickly and decisively without the usual political hostage-taking designed to extract concession from the White House.

The last thing our economy needs is more uncertainty.

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Discussion | 5 comments

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  • John TroidlNovember 20, 2013 - 9:31 am

    Janet Yellen is an excellent, well qualified candidate for Chair of the Federal Reserve. However, she is a graduate of Brown University, not of Harvard University. She graduated from Brown in 1967 with a degree in economics. She received her PhD in Economics from Yale University in 1971. She has worked at other universities, including Berkeley, but she was EDUCATED at Brown and Yale. She has made the most of her education with excellent contributions in economics and policy throughout her career including her current role as Vice Chair of the Federal Reserve. She is particularly concerned with the goal of reducing unemployment. She should be confirmed. John Troidl, '76....."Ever true"

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  • November 20, 2013 - 10:10 am

    What kind of expert economist misses the housing bubble like Yellen did in 2005. Finally in 2007 she said there was a bubble. Really, two years late? No kidding!!!!! She will only keep pouring fed money into the markets and pop another bubble. Coming soon to an economy near you.

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  • John TroidlNovember 20, 2013 - 10:47 am

    Dean Anon, You know, you have a point. Economists are not perfect ..... and their field is called "the dismal science" after all. Not quite up to the standards of physics and chemistry for predictive power... a key element of classification as "science". But you, and others, might find the following link to an article in The Atlantic to be useful... in making its case that she is the best choice... although not a PERFECT candidate. :) http://www.theatlantic.com/business/archive/2013/08/what-janet-yellen-did-and-didnt-get-wrong-about-the-housing-bubble/278279/

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  • Sebastian OnateNovember 20, 2013 - 1:14 pm

    Yes, "academic credentials" here means where she's been on the faculty.

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  • greg johnsonNovember 21, 2013 - 10:27 am

    Who'd have thought that you could find a replacement to the dovish side of Bernanke. Only a president with no clue in economics could be so foolish. I saw some of the senate hearing in which she said keep printing (paraphrasing). She does not see the bubble now, as Bernanke did not see the housing bubble in '06. How is it that eggheads can bastardize logic to the point that they can't recognize what's in front of them? Are we supposed to be reassured by the endorsement from Wall street? This administration goes from bad to worse. I believe Obama has good intentions but if he were an Al Queda implant he could not do a better job of ruining the country!!

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