NPI's Cascadia Advocate

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

Friday, July 18th, 2014

LIVE from Detroit: The Rise of Janet Yellen: Why the Fed Matters

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.



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