Few public figures can move markets like the chairman of the Federal Reserve. The individual whose charge is to coordinate monetary policy by setting (some would say manipulating) interest rates to keep the value of money sound and the economy growing at a sustainable clip is to many the only oracle that really matters.
In recent years, a more profound job responsibility has come with the position: Emergency bond buyer of last resort; and it will likely be the unenviable task of the next chair of the Federal Reserve to figure out when to take away the punch bowl, now spiked with a guaranteed $85 billion monthly purchase of bonds in the open market.
Vice Chairman of the Federal Reserve Janet Yellen is widely seen as a seamless transition from current chair Ben Bernanke, if not even more accommodative, and by most accounts has the political backing to succeed him. She is considered a dove on inflation, arguing that some rise in prices is a positive for the economy as it can act as a buffer against speculative investing, asset bubbles and recessions.
Yellen is a noted economist and was a member of the Federal Reserve’s Board of Governors from 1994 to 1997, headed up President Bill Clinton’s Council of Economic Advisors from 1997 to 1999, and was president of the Federal Reserve Bank of San Francisco from 2004 to 2010.
Her appointment is not a given. Recent reports suggest the White House has begun to look favorably on Lawrence Summers, the one-time president of Harvard University who fell from grace after making uncharitable remarks about women scientists. Summers was Clinton’s chief economic advisor for a time, and opponents are quick to point out that his opposition to regulating the derivatives market in the late ’90s helped Wall Street firms sow the seeds that led to the financial crisis.
Some of the campaign against Yellen, according to The Washington Post, suggests that as a woman, she lacks gravitas and the will to stand up to those who would seek to influence her; true, she would be the first woman to hold the position of chair, but questioning her gravitas behind the scenes and off the record is a cowardly attempt to deter the administration from making what should be the obvious choice.