President Obama will officially nominate Janet Yellen, Brown class of ’67, for chairwoman of the Federal Reserve this coming Wednesday. The likelihood of Yellen’s confirmation is high, and if confirmed the current vice chairwoman of the Fed will be the first woman, and Brown graduate, to hold the position.
It is anticipated that Yellen will receive bipartisan support in the Senate, although Republicans have already expressed ceremonial reservations about the Democrat nominee of a Democrat president. “I voted against Vice Chairman Yellen’s original nomination to the Fed in 2010 because of her dovish views on monetary policy,” Sen. Bob Corker of the Banking Committee said. “I am not aware of anything that demonstrates her views have changed. We will closely examine her record since that time.”
A veteran of high level policy circles, Yellen was nominated to the Fed’s board of governors in 1994, and spent three years as head of President Clinton’s Council of Economic Advisors. In 2004 she became the President of the Federal Reserve Bank of San Francisco, a position she held through the height of the financial crisis. Since 2010, she has been vice-chairman of the Fed.
“She has a depth of experience that is second to none.” Banking Committee Chairman Sen. Tim Johnson said in a statement. Johnson expressed his priority “to move her nomination forward in a timely manner.”
Yellen’s attitudes, capabilities and intelligence are familiar to the American public after two decades at the height of national economic policy. “She has a good handle on the appropriate use of regulation to financial markets operating efficiently. She’s not left-wing or right-wing. She’s very centered in her approach,” Brown University President Christina Paxton said in a statement.
Though enthusiastically backed by progressive Democrats, Yellen runs in the economic mainstream. She recognizes the need to reform of social security benefits, backs the repeal of Glass Steagal legislation and supports trade accords like the North America Free Trade Agreement. And while she is closer to the center than her senate supporters on regulation, it is believed Yellen will approach Wall Street more “skeptically” than the President’s prior nominee, Larry Summers.
Her professional reputation stands in contrast to Summers’, whose support for financial deregulation during the Clinton administration attracted vehement criticism after President Obama nominated him for Fed Chief. Yellen is a strong proponent of the Fed as a regulator, a role that has become one of the institution’s most crucial responsibilities following the economic crisis. Throughout her academic and professional career Yellen has argued financial regulation curbs abuses and other disruptions of economic growth.
The political world’s reaction to Yellen’s nomination is comically receptive after the near uproar following Obama’s choice of Summers as Fed Chief. On the heals of the Summers’ nomination, three senate Democrats on the Banking Committee stated publicly that they would not vote to confirm the former treasury secretary and president of Harvard. The White House would have had to seek out Republican support and cut deals with the GOP, something the president was not prepared to do. Summers recognized, given the political climate, that there was little the White House could muster support from progressive Democrats and withdrew from consideration.
Summers’ prior support of deregulation, controversial comments on women in the sciences, and reputed arrogance made him an unpopular candidate to many. In contrast, opposition to Yellen is scant; the most persistent criticism against her is her proximity to the Fed, some claiming that her role constructing current policy will make it more difficult for her to enact change.
Indeed, it is unlikely that Yellen will shake the Fed up with any radical changes after she fills Ben Bernanke’s post. According to the BBC the transition from Bernanke to Yellen “will not have much impact, because the two already work so closely together.”
Continuity might be favorable for the Fed at this point in time however. The most pressing issue to face the next Fed chief will be strategizing the withdrawal of the economic stimulus. The coming transition from Bernanke to Yellen will be “seamless,” and according to BBC’s business correspondent Linda Yueh, it is therefore unlikely Yellen will alter the timing of withdrawal from the current course.
Although she is the President’s second choice for chairman of the Fed, Yellen enjoys wide support from congressional Democrats and monetary policy experts alike. Previously recognized for her academic achievements and broad base of policy experience, Yellen is now recognized as the face of women in economics. After her likely confirmation by the senate, Yellen will be the most powerful economist in the world and a public leader of a discipline where the gap between men and women is inexplicably wide.
Yellen’s confirmation will certainly be historic, and signs of her illustrious future in the economics world were evident even during her undergraduate education at Brown University. Graduating summa cum laude with a degree in economics, Yellen was a diligent and enthusiastic student considered “star of her class.”
In a 1997 interview with Brown Alumni Magazine, Yellen stated, “I remember sitting in Herschel Grossman’s class and thinking, ‘Gee, I didn’t realize how much influence the Federal Reserve has on the health of the economy. If I ever have a chance at public service, [a Fed post] would be a worthwhile thing to do.'”