Yellen
Yellen\’yelln\n : verb 1.Southern for something Momma did a lot of when I didn’t do right 2. The first chairwoman in the history of the Federal Reserve Board of Governors of the United States of America.
Janet L. Yellen is a wife, mother, economist and stamp collector. She looks like she could be on the school board and sing from the first or second row of the First Baptist Church in Fordyce, Arkansas. She could be a respected Southern lady who throws down a mean apple pie at the county fair and serves a righteous fried chicken. I can see her playing Aunt Bea on The Andy Griffith Show.
But Janet Yellen isn’t even remotely Southern. Born in Brooklyn, she graduated summa cum laude from Brown University; and then earned her Ph.D. in economics from Yale University in 1971. She married George Akerlof, who is a few years older than she, in 1978 after dating for only six months. George, also an economist and a professor emeritus of economy at the University of California, Berkeley, won the Nobel Prize in 2001. Their only child, son Robbie, is also an economist. When asked about family vacations, she admitted that she filled her suitcase with books on the economy. Not surprising. But it’s hard for me to imagine seeing them at the ‘Back Porch’ in Destin waiting for an order of fried shrimp.
She credits her partnership in marriage as a major factor in her career. Economists generally gravitate to government, teaching or private finance. George followed the teaching path, while she entered government service. After teaching economics at Harvard University, she was appointed to the Federal Reserve Board of Governors in 1994. After two years, she left an appointment to the White House Council of Economic Advisers to return to teaching. In 2004, she became the president and CEO of the Federal Reserve Bank of San Francisco, which lead to her appointment to Vice Chairman of the Board of Governors. Her appointment to Chairwoman was effective February 3, 2014.
It is an impressive set of credentials-for a man or a woman. There seems to be no commentary on the fact that Janet Yellen is a woman. Certainly this is a historic precedence, but America is filled with untold “firsts.” It was only a matter of time that a person with the experience, knowledge and education to become chair of the federal government’s bank would be a woman. The fact that she spent over three years as co-chair with Ben Bernanke blunted impact of the moment. Besides, now we see women running companies and serving in government like never before.
I can’t imagine anyone’s concern that a woman would handle the current financial challenges differently than a man. Anyone taking the baton from Chairman Bernanke is faced with navigating the economy through historical regulatory changes and polices. Chairwoman Yellen is tasked with unwinding the quantitative easing that that the Federal Reserve implemented in the face probably the worst financial crises in our history.
After a series of bank panics stretching over five decades, the Federal Reserve was established in 1914 as the central bank of the United States. “The Fed” works to provide a more stable monetary and financial system in an ever more complex national economy. It has at its disposal a variety of tools and authority to manage financial crises and to guide a smoother transition from one economic cycle to the next.
There are seven members of the Board of Governors which operate the Fed. These governors are nominated by the President and are confirmed by the Senate. It is not surprising that many of the governors are economists and it is obvious that politics is part of commentary about the board members.
Economists develop opinions which directly impacts our society and how our government runs. Politics is politics, no matter what party affiliation you claim.
At the time, some commentators disagreed with the Fed’s decision to implement QE, not once but three times after 2008. Sometimes the disagreement is economic, sometimes the disagreement is political and sometimes the disagreement is both. For sure it is kind of hard for us common folks to sort out the truth in what is being said about Fed decisions.
But this is for sure. Eventually the Fed has to unwind the Quantitative Easing. It does this by buying fewer and fewer financial assets from banks each month. The timing and the speed by which the Fed unwinds QE influences interest rates, which impact the financial markets, which impact the economy, which impacts your 401(k) account. This is where Janet Yellen is today.
Being the first chairwoman of the Federal Reserve System is notable, but how she navigates through the current economic cycle will be historic.