Ben Bernanke is stepping down on Jan. 31, 2014, as chairman of the Federal Reserve. Janet L. Yellen, a Democrat, is expected to take his place. If her nomination is approved by the Senate, her position as chair will establish a number of firsts.
Yellen would be the first woman ensconced as chairman of the Federal Reserve. She would be the first Democrat to hold the position in nearly three decades. And, she would vary policy from her predecessor’s emphasis on holding down inflation in order to stabilize a stumbling economy, by focusing on employment as a vision for economic growth.
How does Yellen’s nomination impact those of us living in the Brainerd lakes area?
Well, with unemployment in the lakes area consistently over 10 percent during most of the last decade, the emphasis Yellen hopes to place on the Fed’s money policy would ultimately reverse the negative trend here. In a speech to the AFL-CIO she stated: “We know that long-term unemployment is devastating to workers and their families.” On that, she is correct.
If her nomination gains support in the Senate, there are other attributes she will bring to the job.
According to the Wall Street Journal, there are other attributes she brings to the table, such as a deep concern about excessive inflation, she is also a good forecaster of growth, inflation and unemployment. The Great Recession made her a believer in tougher financial regulations. (In light of the Ponzi schemes that were perpetrated leading up to the financial turmoil over the past six years, she may be right.)
Lastly, she is supposedly a good communicator and believes in transparency.
Will Yellen be a good Fed chair? Perhaps better questions would be, has her predecessor been a good Federal Reserve chairman and can she do any worse that Ben Bernanke?