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.