5 Things You Should Know About Janet Yellen
But who is Janet Yellen?
Here are five things you should know about about the 67-year-old woman set to succeed outgoing chairman Ben Bernanke.
1. She’s an academic
Yellen grew up in Brooklyn and attended Yale University, where she studied under the renowned economist James Tobin. She taught, alongside her husband, economist George Akerlof, at UC Berkeley. She began her stint at the Fed in the mid-1990s before serving in the mid-2000s as the president of the Federal Reserve Bank of San Francisco. She is the current vice chairwoman of the Federal Reserve.
2. She’s good at her job
The Fed’s job is to regulate the American financial system, which in turn regulates the broader economy, by preventing it from becoming too big or too small. The Fed does this in part by raising and lowering interest rates. To slow the economy down, for instance, the Fed raises interest rates, which increases the cost of borrowing money.
To do its job, the Fed needs to predict economic growth, inflation and unemployment rates. And Wall Street Journal analysis found that Yellen predicted the most accurate forecasts between 2009 and 2013. Serious bragging rights.
3. She’s not opposed to some regulation
Yellen said the 2008 financial crisis inclined her toward tougher financial regulations and voiced frustration at the length of time it took for the Fed to put forth regulations.
“This experience has strongly inclined me toward tougher standards and built-in rules that will kick into effect automatically when things like this happen that make tightening up a less discretionary matter,” she reportedly told the congressionally-created Financial Crisis Inquiry Commission in 2010.
During her recent confirmation hearing, Yellin spoke about the idea of too big to fail, that some financial institutions are so large that their failure would severely hurt the economy and should be supported by the government when they struggle, is “damaging.”
Yellen has a reputation for telling it like she sees it. She said during the hearing that quantitative easing “cannot continue forever.” As Alicia explains in the video above, the practice is a way of artificially stimulating the economy, but it’s not doing much to bring back jobs. If people aren’t working, they’re not spending, which can hurt the economy.
4. She’s good at negotiating
Yellen might be soft-spoken but she stands by her convictions and backs them up.
“She makes an argument on the merits and she sticks with it,” Alan Blinder, an economics professor at Princeton nominated to the Fed alongside Yellen in 1994 told the New York Times. “And she’s good at articulating an argument in a way that doesn’t leave people on the other side hopping mad at her.”
5. This is a win for Obama
This is the president’s chance to nominate the first Democrat to lead the Federal Reserve since the late 1970s, when President Jimmy Carter picked Paul Volcker. If she’s confirmed, her term will last two years beyond his own.
Emily DeRuy is a Washington, D.C.-based associate editor, covering education, reproductive rights, and inequality. A San Francisco native, she enjoys Giants baseball and misses Philz terribly.