NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Wednesday, October 9th, 2013

President Barack Obama nominates Janet Yellen to be the next Federal Reserve Chair

His­to­ry was made today at the White House when Pres­i­dent Barack Oba­ma announced that he has decid­ed to for­mal­ly nom­i­nate Janet Yellen as the next chair­per­son of the Board of Gov­er­nors of the Fed­er­al Reserve Sys­tem.

Yellen, who cur­rent­ly serves as vice chair of the board, would be (if con­firmed) the first woman and the first Demo­c­rat ever to hold the posi­tion.

“Janet is renowned for her good judg­ment,” said Pres­i­dent Oba­ma in a speech announc­ing the nom­i­na­tion at the White House. “She sound­ed the alarm ear­ly about the hous­ing bub­ble, about excess­es in the finan­cial sec­tor, and about the risks of a major reces­sion. She doesn’t have a crys­tal ball, but what she does have is a keen under­stand­ing about how mar­kets and the econ­o­my work — not just in the­o­ry but also in the real world. And she calls it like she sees it.”

He added, “She’s com­mit­ted to increas­ing employ­ment, and she under­stands the human costs when Amer­i­cans can’t find a job… America’s work­ers and their fam­i­lies will have a cham­pi­on in Janet Yellen.”

Yellen spoke next, express­ing her grat­i­tude to the Pres­i­dent for choos­ing her (Oba­ma’s first choice was Lar­ry Sum­mers, but Sum­mers with­drew his name from con­sid­er­a­tion after Democ­rats in the Sen­ate sig­naled they would oppose his nom­i­na­tion) and pledged to serve the coun­try to the best of her abil­i­ty.

Her remarks:

Thank you, Mr. Pres­i­dent, I am hon­ored and hum­bled by the faith you have placed in me. If con­firmed by the Sen­ate, I pledge to do my utmost to keep that trust and meet the great respon­si­bil­i­ties that Con­gress has entrust­ed to the Fed­er­al Reserve–to pro­mote max­i­mum employ­ment, sta­ble prices, and a strong and sta­ble finan­cial sys­tem.

I’d also like to thank my spouse, George, and my son, Robert. I could­n’t imag­ine tak­ing on this new chal­lenge with­out their love and sup­port.

The past six years have been tumul­tuous for the econ­o­my and chal­leng­ing for many Amer­i­cans. While I think we all agree, Mr. Pres­i­dent, that more needs to be done to strength­en this recov­ery, par­tic­u­lar­ly for those hard­est hit by the Great Reces­sion, we have made progress. The econ­o­my is stronger and the finan­cial sys­tem sounder. As you said, Mr. Pres­i­dent, con­sid­er­able cred­it for that goes to Chair­man Bernanke for his wise, coura­geous, and skill­ful lead­er­ship. It has been my priv­i­lege to serve with him and learn from him.

While we have made progress, we have far­ther to go. The man­date of the Fed­er­al Reserve is to serve all the Amer­i­can peo­ple, and too many Amer­i­cans still can’t find a job and wor­ry how they will pay their bills and pro­vide for their fam­i­lies. The Fed­er­al Reserve can help, if it does its job effec­tive­ly. We can help ensure that every­one has the oppor­tu­ni­ty to work hard and build a bet­ter life. We can ensure that infla­tion remains in check and does­n’t under­mine the ben­e­fits of a grow­ing econ­o­my. We can and must safe­guard the finan­cial sys­tem.

The Fed has pow­er­ful tools to influ­ence the econ­o­my and the finan­cial sys­tem, but I believe its great­est strength rests in its capac­i­ty to approach impor­tant deci­sions with exper­tise and objec­tiv­i­ty, to vig­or­ous­ly debate diverse views, and then to unite behind its response. The Fed’s effec­tive­ness depends on the com­mit­ment, inge­nu­ity, and integri­ty of the Fed staff and my fel­low pol­i­cy­mak­ers. They serve Amer­i­ca with great ded­i­ca­tion.

Mr. Pres­i­dent, thank you for giv­ing me this oppor­tu­ni­ty to con­tin­ue serv­ing the Fed­er­al Reserve and car­ry­ing out its impor­tant work on behalf of the Amer­i­can peo­ple.

The news of Yel­len’s nom­i­na­tion was enthu­si­as­ti­cal­ly received by Sen­ate Democ­rats. Over a third of the cau­cus had signed a let­ter cir­cu­lat­ed by Sher­rod Brown of Ohio urg­ing the Pres­i­dent to nom­i­nate Yellen (as opposed to Sum­mers). Sev­er­al Demo­c­ra­t­ic sen­a­tors took to Twit­ter or their web­sites to praise the news:

Janet Yellen is an excel­lent choice to be the next Chair of the Fed­er­al Reserve and I believe she’ll be con­firmed by a wide mar­gin. ‑cs

— Chuck Schumer (@SenSchumer) Octo­ber 8, 2013

“Today is a his­toric moment for the Fed­er­al Reserve, for women every­where, and for all of us who care about job cre­ation. Gov­er­nor Yellen will work to pre­vent future bailouts, boost our hous­ing mar­kets, and give the Fed’s man­date to max­i­mize employ­ment the atten­tion it deserves. In the midst of a frag­ile eco­nom­ic recov­ery, it will be more impor­tant than ever to have a steady hand and con­sen­sus builder at the helm of the Fed. I urge my col­leagues to give her full and fair con­sid­er­a­tion and a prompt con­fir­ma­tion.”

— Sher­rod Brown (state­ment)

Janet Yellen is a great choice for Fed Chair. Thank you @BarackObama for this his­toric nom­i­na­tion.

— Jeff Merkley (@SenMerkley) Octo­ber 8th, 2013

Nei­ther of Wash­ing­ton’s two U.S. Sen­a­tors have respond­ed to the nom­i­na­tion yet. Sen­a­tor Mike Crapo of Ida­ho has already expressed his reser­va­tions, and he will cer­tain­ly have an oppor­tu­ni­ty to ask Yellen a few ques­tions as the rank­ing mem­ber of the Sen­ate Bank­ing Com­mit­tee, which will be han­dling the nom­i­na­tion.

The Chair of the Sen­ate Bank­ing Com­mit­tee, Tim John­son, wel­comed the nom­i­na­tion and pre­dict­ed Yellen would be con­firmed.

Yel­len’s con­fir­ma­tion is not a sure thing, but she will have the back­ing of the Sen­ate Demo­c­ra­t­ic cau­cus, the busi­ness lob­by, and many promi­nent econ­o­mists ahead of the hear­ings and the even­tu­al vote. That will count for a lot.

Mark Begich (Alas­ka), Jon Tester (Mon­tana), Max Bau­cus (Mon­tana), and Ron Wyden (Ore­gon) are all expect­ed to be sup­port­ive of the nom­i­na­tion.

Assum­ing a vote takes place after pre­sump­tive New Jer­sey Sen­ate win­ner Cory Book­er is sworn in, at least five Repub­li­can votes will be need­ed to allow Yel­len’s nom­i­na­tion to reach the Sen­ate floor. That is, unless Sen­ate Major­i­ty Leader Har­ry Reid attempts to rein­ter­pret the Sen­ate’s rules to work around a fil­i­buster, as he was pre­pared to do a few months ago.

Lisa Murkows­ki of Alas­ka could well end up sup­ply­ing one of the need­ed votes.

Jim Risch of Ida­ho will like­ly cast a no vote, along with Mike Crapo. (Ida­ho’s del­e­ga­tion rou­tine­ly votes against Oba­ma’s nom­i­nees).

Oth­er Repub­li­cans who might be will­ing to at least vote to send Yel­len’s nom­i­na­tion to the floor include Bob Cork­er, John McCain, and Susan Collins.

Finan­cial mar­kets also respond­ed pos­i­tive­ly to Yel­len’s nom­i­na­tion. The Dow Jones Indus­tri­al Aver­age and S&P 500 both climbed in response to the news.

We at NPI com­mend the Pres­i­dent for pick­ing Janet Yellen. She was the log­i­cal choice for the job, and we’re glad to see her nom­i­nat­ed at last.

In mon­e­tary par­lance, she is known for hav­ing a “dovish” rep­u­ta­tion (being more con­cerned about unem­ploy­ment than infla­tion) which is entire­ly appro­pri­ate, con­sid­er­ing that we have had plen­ty of “hawks” run­ning the Fed over the years, and we’ve seen the con­se­quences of their ide­ol­o­gy.

Janet Yellen brings exten­sive expe­ri­ence and impec­ca­ble cre­den­tials to the posi­tion of Fed­er­al Reserve Chair; we look for­ward to see­ing her in action once she takes over from cur­rent Fed Chair­man Ben Bernanke.

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One Comment

  1. My guess is it will always be the Democ­rats who break down old bar­ri­ers. The not­ed excep­tion was the appoint­ment of San­dra Day O’Con­nor to be the first female asso­ciate Supreme Court Jus­tice.

    # by Mike Barer :: October 9th, 2013 at 5:34 PM