On Oct. 9, President Barack Obama nominated Janet Yellen to succeed Ben Bernanke as chairperson of the Federal Reserve. Yellen’s nomination comes after Obama’s first pick, former White House economics advisor, Larry Summers, withdrew his name from consideration after intense opposition from Senate Democrats. In her confirmation speech, Yellen pledged to promote maximum employment and meet the great responsibilities entrusted to her by Congress. Given her past statements supporting the view that the Federal Reserve can play a crucial role in stimulating the economy, there is some hope she will take a more active approach than her predecessor.
Although her political leanings, gender and age have garnered significant media attention, they are of little relevance to her performance. Rather, her academic portfolio and economic philosophy will ultimately determine her policy-making.
In her position as vice chairwoman of the Fed, Yellen displayed the utmost concern for regulating unemployment. As an academic, she conducted extensive research on the causes and implications of America’s jobless population. She influenced the Fed’s reductions in interest rates as a way to combat unemployment while also keeping the annual inflation-rate increase goals at a low 2 percent. Although Yellen was not Obama’s first choice, she is expected to proceed with necessary caution on policies implemented by Bernanke to guide the nation into economic recovery and decreasing unemployment.
It also cannot be denied that Yellen’s gender makes her nomination noteworthy. If confirmed by the Senate, she will be the first female in the Fed’s 100-year history to serve as chair. Female nominees are rarely tapped to head financial institutions, especially one of this magnitude. Despite the fact that 45 percent of Fed employees are women, female visibility in senior roles remains rare. Yellen’s nomination could help bridge the gender gap in economic appointments, as well as alter deeply entrenched perceptions that women are better suited for social rather than financial posts.
With strong support from Democrats and only marginal opposition from Republicans, Yellen will likely be confirmed, and rightfully so. Still, reservations remain. As The New York Times aptly noted, “a liberal central banker is something different from — and more conservative than — a liberal politician.” Although her rhetoric reveals a more progressive stance on economic issues, it seems unlikely that a major shift in policy will occur.
A version of this article appeared in the Thursday, Oct. 10 print edition. Email the WSN Editorial Board at [email protected].
