Janet Yellen Deserved Better

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Add this to the long and growing list of ways President Trump has insulted women: he demoted not only one of the most qualified economists or bankers to ever be appointed Chair of the Board of Governors of the Federal Reserve System, but one of the most successful chairs ever. Janet Yellen, whom TIME Magazine called “the sixteen-trillion dollar woman,” cracked the glass ceiling of the Fed, but the shards of sexism remain in the highest rungs of power.

It is deeply unprecedented for the incoming president, even of a different party, not to reappoint a successful Fed Chair. Effective Chairs have been reappointed since the 1930s and for good reason. A steady hand at the tiller is good for the economy, and leadership that transcends political parties helps insulate the Fed from partisan politics.

How well did Janet Yellen do? Very well. Without creating signs of inflation, she brought down the unemployment rate from 6.7 percent in February 2014 to 4.1 percent in October 2017. She called attention to the serious problem of unemployment, especially among those harder to employ, in her first public meeting as Chair in March 2014, where she listened to and spoke with unemployed workers about their experiences. She has begun to sell off the enormous assets the Fed acquired in stimulating the economy and to gradually raise interest rates, and she has accomplished these tricky maneuvers smoothly.

She has used the Fed system’s market power as the largest employer of economists in the United States to make the case for the central importance of diversifying the economics profession, so that economists can more accurately understand the labor market—and everything else about the economy—by drawing on a broad range of backgrounds and a wide range of experiences. As part of this effort, she held two research conferences at the Fed on diversifying the profession and ending discrimination.

She has strengthened bank regulation and spoken against relaxing requirements put in place after the financial crisis of 2008.

Yet some observers, including prominent women economists, have normalized Trump’s decision by saying that these are very partisan times and this president likes to go his own way, even suggesting that a man would also not have been reappointed by Trump. I wonder about the last point especially, because were the Chair a man, a stronger case might have been made by Trump’s advisors for the importance of continuity, the appearance of nonpartisanship, and the usual precedent of reappointing a ‘him.’ After all, studies have shown that a successful male is more often seen as deserving of leadership opportunities in a way in which, apparently, a successful woman is not. After interviewing no women other than Yellen, he chose a man like nearly all his other male picks: white, wealthy, and with a background in business. Trump noted Jerome Powell has real world experience. But business is not the only real world.

After making a career in investment banking and serving briefly in the Treasury Department under George H. W. Bush, Powell made a bundle at The Carlyle Group and then worked with the Bipartisan Policy Center, where he helped convince Republicans in Congress that they had to raise the debt ceiling in 2011, shortly after which Obama appointed him to the Fed Board. While from all accounts he has done well in his five years of on-the-job training as a Governor under Yellen’s tutelage, why pick the apprentice when you can reappoint the master? So many women have been galled at training their successors when they were still available to do the job or witnessing others get the promotions that they never got.

In contrast, Janet Yellen brought to the job of Chair, a lifetime of study of unemployment, the macro economy, and the financial system, 15+ years of national economic leadership as Chair of the Council of Economic Advisors, President of the San Francisco Federal Reserve Bank, Vice Chair of the Board of Governors, and 2+ years as a Fed Governor. What’s normal about this is that a man with much less expertise, and whose own views on monetary policy are virtually unknown, is judged the equal of a superlatively qualified woman whose views are well-known through her research, writing, and former policy positions. If we want to ensure that women have access to more leadership positions, this is the kind of decision that must not be normalized—it should be decried from every rooftop.

This is the way an able and extremely successful woman leader is often passed over, and is a disappointment to all women and to all Americans who believe women are equally good leaders and deserve fair and equal treatment.

Janet, we can only hope you will complete your full 14-year term as a Governor and continue to use your knowledge, expertise, and consensus-building skills to help the nation through the next six perilous years. And if the Democrats should win the White House in 2020, I look forward to seeing you back as Chair, in the place you rightly earned.

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