Madam Secretary: Who Is Janet Yellen and Can She Save Us From Economic Demise?
Janet Yellen was sworn in Tuesday as the 78th U.S. Secretary of the Treasury. In the hallway of portraits depicting every person who’s held that title, beginning with Alexander Hamilton, Yellen’s will stand out as the first woman on that esteemed wall.
The 74-year-old Brooklyn-born economic phenom is no stranger to being the “first woman.” She broke the gender barrier in 2014 in her appointment as the 15th chair of the Federal Reserve.
Unlike her predecessor Steve Mnuchin, Yellen’s latest role is both logical and deserved. She’s built an arsenal of experience she’ll need to tap every bit of as she navigates the nation’s financial policies through a period of economic crisis unseen since the Great Depression.
While she’s been met with her share of criticism at points in her storied career, Yellen is still widely regarded as a brilliant and steady economic mind. Monday’s 84-15 bipartisan confirmation vote nods to a respect that transcends party politics. However, some progressives view her acceptance by the political establishment as a red flag.
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The real question is: Who is Janet Yellen and, more importantly, how can we expect her to shape the Treasury Department?
Her academic achievements, on both sides of the lectern, are beyond reproach. Noted for her sharpness at a young age, Yellen graduated from Fort Hamilton High School as class valedictorian and later summa cum laude from Brown University after she switched majors from philosophy. She went on to earn a Ph.D. in economics from Yale University and then picked up teaching gigs at Harvard University, London School of Economic and at University of California, Berkeley where she has worked since 1980 as a researcher and professor, taking periodic leaves of absence to serve the country in various political appointments under now four different presidents.
President Bill Clinton brought her on board as a governing member of the Federal Reserve in 1994. Clinton later moved her over to serve on the Council of Economic Advisers and in that capacity she largely focused on the study of gender pay gaps. She’d work on the CEA until 1999.
Five years later, Yellen found herself running the Federal Reserve Bank of San Francisco as president and chief executive officer. She was the first woman in those roles and would continue that work until 2010 when she was confirmed as the U.S. Federal Reserve vice chair under President Barack Obama and simultaneously took up a 14-year term as a member of the Fed board.
In January 2014, she was confirmed as the first woman to chair Federal Reserve.
That litany of successes just scratches the surface and completely ignores the many awards, fellowships and other contributions to the study and implementation of economic policy.
As to what we can expect: Yellen is a little too moderate and measured for some progressives’ taste, but she stays fairly true to Keynesian economic ideals, which in layman’s terms theorizes that government has an intervention role to play in stabilizing the economy. Or in other words, Keynesians do not trust that the free market alone can effectively jump-start production and employment, especially in times of collapse. For that, Yellen and others of her ilk see public policy as the best way to reverse downturns and moderate the “boom and bust” cycle.
A practical example of Keynesian economics is seen in New Deal programs that dug the country out of its Great Depression hole. It’s worth noting that Franklin D. Roosevelt was no big fan of the theory, not at first anyway. FDR attempted other conservative practices first: balancing the budget, restricting output, etc. He would later come into the Keynes fold, though not entirely, to better craft the New Deal into the initiative widely credited as saving the U.S. from permanent economic demise.
As the nation again faces stark and seemingly insurmountable financial calamity, it’s an interesting turn of events that Yellen, who has been described as “Keynesian to her fingertips,” now helms the nation’s economic policy machine.
She has testified on different occasions to Congress during the Trump administration and consistently called for “big” government help at the state level to both combat the Covid-19 pandemic with spending for testing and vaccine distribution and to stimulate the struggling economy.
She will have plenty of opportunity to put her vast experience to work and demonstrate that she’s learned from prior missteps. In the course of just one day on the job, she will have numerous chances to succeed and fail, and she may do a good deal of both. But one thing can be said without the shadow of any doubt, Janet Yellen has forgotten more than Steve Mnuchin could ever learn.
Beyond the historic nature of her confirmation, and it is historic, is the breadth of her qualifications. That in itself is refreshing. Now, let’s just hope she can save us.
Congratulations, Madam Secretary.