Why Janet Yellen Should Be Fed Chair (In 4 Quotes)

Janet Yellen, president of the Federal Reserve Bank of San Francisco, speaks at the University of San Diego's Joan Kroc Insti
Janet Yellen, president of the Federal Reserve Bank of San Francisco, speaks at the University of San Diego's Joan Kroc Institute for Peace and Justice in San Diego, California, U.S., on Monday, Feb. 22, 2010. Yellen said the U.S. economy will operate below potential this year and next and still needs low interest rates to gain strength. Photographer: Sandy Huffaker/Bloomberg via Getty Images

Like most Americans, you probably have no idea who Janet Yellen is, and you probably don't care.

But she might soon be -- or at least should be -- in charge of the Federal Reserve, making her one of the most powerful people on the planet. So maybe you should care about her a little. And here are four quotes that show just how happy you could be if she ends up getting the job (which she still might not, if President Obama throws a tantrum about his preferred candidate, Larry Summers, being sunk by the pro-Yellen left).

1. She thinks and cares a lot about unemployment.

Waaaay back in 2004, when the financial crisis was still just a twinkle in Larry Summers' eye, Yellen, currently the vice chairwoman of the Fed, had this to say about the importance of fighting unemployment:

Policy makers should be compelled to take action given the serious costs of long-term unemployment when overall unemployment is already high. A week of unemployment is worse when it is experienced as part of a longer spell.

We just so happen to be in a wee bit of an unemployment crisis, with the slowest labor-market recovery since World War II. Under the current circumstances, where the median duration of unemployment is still higher than in every recession since at least 1967, this is the kind of attitude you want.

2. She was ahead of other people at the Fed, including Chairman Ben Bernanke, in seeing a financial crisis coming.

In December 2007, when the Fed was still optimistic that the economy would escape real damage from the growing signs of trouble in the subprime-mortgage market, Yellen said this:

The possibilities of a credit crunch developing and of the economy slipping into a recession seem all too real.

Which is exactly what happened. In fact, the recession officially began that month.

3. She repeatedly expressed concern about the growing housing bubble.

Certainly, analyses do indicate that house prices are abnormally high -- that there is a "bubble" element, even accounting for factors that would support high house prices, such as low mortgage interest rates.

Her record on the bubble was not perfect -- she argued against popping it, for example -- but at least she saw the problem coming.

4. No, seriously, she cares about unemployment.

She had this to say back in 1999, when Larry Summers was still running the Treasury Department and licking the blood of Brooksley Born off his front paws.

"Will capitalist economies operate at full employment in the absence of routine intervention? Certainly not,” she said. “Are deviations from full employment a social problem? Obviously."

So, yeah, Yellen for Fed chair.



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