When Barack Obama nominated Janet Yellen (shown in photo) to succeed Ben Berananke as head of the Federal Reserve, the markets heaved a collective sigh of relief, secure in the knowledge that, for now at least, the printing party will continue.
Dr. Yellen, who holds a PhD in economics from Yale, is no stranger to policymaking at the Fed, having served as a member of the Federal Reserve’s Board of Governors from 1994 to 1997, and as President and Chief Executive Officer of the Federal Reserve Bank of San Francisco from 2004 to 2010. Yellen’s additional credentials are impressive, too. She has taught economics at Harvard, Berkeley, and the London School of Economics, and was chair of President Bill Clinton’s Council of Economic Advisors from 1997 to 1999. She is also a member of the globalist-minded Council on Foreign Relations. Her husband, George Akerlof, is a Nobel laureate and economist at Berkeley. If, as appears likely, her nomination is confirmed by the Senate, Yellen will become the first woman to lead the Fed in its 100-year history.
But Washington and Wall Street insiders are cheering the Yellen nomination less for her credentials than for her monetary ideology. In Wall Street jargon, Yellen is considered a “dove,” i.e., someone allegedly more concerned with unemployment than with inflation (as opposed to a “hawk,” for whom inflation is the paramount concern). As she made abundantly clear in a speech at a conference on transatlantic prosperity last February, Yellen’s focus is on employment, and she is frustrated that, in contrast to other recessions in recent history, employment has rebounded at a significantly lower pace following the Great Recession. Accordingly, Yellen has been a staunch supporter of Bernanke’s years-long policy of “quantitative easing,” and appears willing to keep the money spigots open for as long as it takes to stimulate the moribund American economy back to robust jobs creation. In addition, she has been lauded for being one of the only Establishment figures to correctly forecast the housing crash, having anticipated it more than a year in advance.
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Photo of Janet Yellen: AP Images