The Federal Reserve wields great economic power; it is often said that the Chairman of the Federal Reserve is the second most powerful person in America. In 2013, a ragtag coalition came together to fight for economic justice and work on an unprecedented campaign: to influence who would become the Chair of the Federal Reserve. Now the challenge is how to work with the new leadership of the Federal Reserve to promote a progressive economic agenda.
The Federal Reserve had mainly ignores the mandate of trying to keep “full employment” in the American economy. Within the last couple of years the Fed has started to pay more attention to employment. The Fed is doing this by keeping short term rates low and by buying long term bonds to keep long term rates low.
The deregulation that the Fed was a contributor to helped make our economy for financially oriented. The Fed has essentially been a failure in keeping our economy healthy.
Larry Summers was being considered for the Chairman of the Federal Reserve. There were many concerns over this including concerns over his attitude towards women. Janet Yellen was an alternative choice who was seen as a much better candidate for the position. With President Obama leaning toward Summers, a grass roots movement began to push for Janet Yelllen.
Janet Yellen has said that we must keep interest rates low while unemployment is high. However, the solution to preventing bubbles is not putting on the brakes as the economy begins to improve. The solution is more bank regulation.