Obama to Nominate Yellen as Fed No. 2
EmailABC News' Matthew Jaffe and Jake Tapper report:
President Obama is poised to nominate Janet Yellen to serve as vice-chairman of the Federal Reserve's board of governors, a source in the financial industry told ABC News Friday.
Yellen, president of the San Francisco Fed, would replace Donald Kohn, who recently announced that he would be stepping down at the end of his term in June.
“As a former chair of the Council of Economic Advisers, an educator with expertise in macroeconomic issues including the causes, mechanisms and implications of unemployment; and President and CEO of the twelfth district Federal Reserve Bank of San Francisco, Yellen has an impressive set of credentials as a macroeconomist and she is a leading contender for the Vice Chair nomination," a senior administration official confirmed.
Along with the open second-in-command post, President Obama is also set to name two individuals to serve on the central bank's seven-person board. The vacancies give the President an opportunity to leave his mark on the Fed in the wake of the worst financial crisis since the Great Depression.
A senior administration official says that Sarah Raskin and Peter Diamond are under consideration for the vacancies. Raskin is the top banking regulator for the state of Maryland and Diamond is an economics professor at MIT.
Yellen formerly served as chair of the Council of Economic Advisers in the Clinton administration. At the San Francisco Fed, she has been a vocal supporter of Fed chief Ben Bernanke's efforts to stem the nation's recession, advocating the central bank's move to keep key interest rates near zero and implement massive monetary stimulus measures.
New York Times' columnist Paul Krugman quickly applauded Yellen's expected appointment, writing, "She’s open-minded, a good counterweight to the inflation hawks who think that any day now we’ll be partying like it’s 1979," Krugman said. "She’ll provide exactly the kind of intellectual flexibility the Fed needs."
Yellen and the other nominees to the Fed's board would have to win Senate confirmation. Earlier this year Bernanke ultimately won senators' support for a second term at the central bank, but not before lawmakers' concerns about the Fed's decisions before and during the crisis appeared to put his chances in doubt.
The Wall Street Journal was first to report that Yellen would be President Obama's choice for second-in-command at the central bank.
- Matthew Jaffe and Jake Tapper
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All due deference to Ms. Yellen, but considering how badly California’s finiances have been mismanaged, why would you consider anyone from their regulatory structure for a spot in the Fed?
Posted by: bobtherepublican | March 12, 2010, 10:07 am 10:07 am
Geez if Krugman likes her she must be bad.
According to Wikipedia:
“Yellen is considered by many on Wall Street to be an Inflation Dove (as concerned with unemployment as inflation) and as such is less likely to advocate Federal Reserve interest rate hikes, as compared, for example, to William Poole (St. Louis Fed President) an Inflation Hawk “
Posted by: Denbo | March 12, 2010, 11:01 am 11:01 am
WSJ notes the same thing, under the heading policy stance: “Ms. Yellen has been a reliable supporter of Fed Chairman Ben Bernanke’s policies. She is frequently cited by economists as one of the central bank’s most dovish policymakers, generally backing policies that would boost growth and reduce high unemployment. She has long been a counterweight to the Fed’s more hawkish regional bank presidents who tend to be more concerned about rising inflation. (The Fed’s dual mandate from Congress is to promote maximum sustainable employment and price stability.)”
Als, under “research”: “Ms. Yellen’s key research interests are unemployment and labor markets; monetary and fiscal policies; and international trade and investment policy. A respected scholar, she has written widely on income inequality and published numerous papers with her husband, George Akerlof, the Nobel prize-winning economist. ”
I’m of mixed opinion thus far.
Posted by: progressive mama | March 12, 2010, 12:31 pm 12:31 pm
Krugman’s endorsement aside, I applaud President Obama’s choice.
The regional Fed presidents have nothing to do with state finances. That’s the purview of State government, in the case of California, a bunch of hyped up leftist idiots in the legislature with a governor who is more Hollywood than substance. Here in California “we” care more about supporting nanny state laws than important stuff like infrastructure and finances.
Posted by: Aaron | March 12, 2010, 1:47 pm 1:47 pm
Question for Mr. Jaffe and Mr. Tapper,why is there no counter view to leftist Paul Kruger’s view?Quoting Krugman describing anyone as open minded is laughable.How about a little more regarding her views regarding income inequality.I realise I’m on an ABC website so maybe I’m asking too much.In the immortal words of Michael Ray Richardson, “The ship be sinkin’.”
Posted by: bobmac | March 12, 2010, 1:51 pm 1:51 pm
I applaud President Obama’s choice.
Posted by: Aaron | Mar 12, 2010 1:47:10 PM
Aaron, what do you like about the choice? I’m curious as I really don’t know where to find out more about her, and how that could benefit us long term via monetary policy. I think its a good thing that she knows a lot about unemployment and international trade policy. Any tips on where to read some good, non-partisan information pertaining to this?
Posted by: progressive mama | March 12, 2010, 1:54 pm 1:54 pm
It is nice the administration has time and money to find friends jobs. While Americans are unemployed and health care is being priced by large corp.
WHAT ABOUT;
If instead of wasting money by paying private insurance with taxes Congress and President Obama were to open Medicare to everyone for health insurance, put it under the laws that private insurance operate under and the average individual payment was what the retired pay now there is a national healthcare that works. The following is an example with Medicare paying 100% of a doctors office visit with only the retired people paying Medicare. Now if you increase the amount of available money by each person paying $110.00 each retired person pays each month, you do the figures it appears the available money would be in the trillions at a cost of each citizen of less than one third what they would pay under the heath care plan the Democrats are trying to push through.
There approximately 300 million people in America. If each person goes to a doctor for an office visit and pays $200.00 for that visit (This is probably double of an average visit cost). The cost for those visits is $60,000,000,000.00 (60 billion dollars). There 57 million retired people paying $110.00 a month on Medicare. That is $75,240,000,000.00 (75.24 billion dollars). Now if you add everyone making Medicare payments the amount paid in is much higher. This means with only one sixth of the population paying Medicare for health insurance there is over 15 billion dollars left over after everyone had a office visit for the year. How many of the 300 million people actually visit the doctor in a year?
Do you want to pay tax to support BIG BUSINESS or pay for affordable health care?
Posted by: Dan | March 12, 2010, 2:25 pm 2:25 pm
bobtherepublican…Ms. Yellen was the “FED” president….NOT the State of California, which “manages” their own STATE’S revenue. Please read before criticizing, then Rove won’t “trick” you anymore.
Posted by: sara | March 12, 2010, 3:14 pm 3:14 pm
I don’t think there is such a thing as non-partisan information. People from the Economist, to Krugman, to the WSJ all seem to have mostly positive things to say about her.
Posted by: progressive mama | March 12, 2010, 3:39 pm 3:39 pm
Are you Gellin’ with Yellen? They call her Mellow Yellen. The weakening dollar should aid Mr POTUS in his export push.
Posted by: DontGet818OnMeNow | March 12, 2010, 4:44 pm 4:44 pm
Isn’t it party like it’s 1999? Sorry Prince (or symbol).. I hope this isn’t some sort of infringement …
Posted by: DontGet818OnMeNow | March 12, 2010, 5:27 pm 5:27 pm
Yellen, president of the San Francisco Fed, would replace Donald Kohn, who recently announced that he would be stepping down at the end of his term in June.
Posted by: Ilan Ben Menachem | March 13, 2010, 10:38 am 10:38 am
Isn’t it party like it’s 1999? Sorry Prince (or symbol).. I hope this isn’t some sort of infringement …
Posted by: Ilan Ben Menachem | March 18, 2010, 5:43 am 5:43 am