Tags: Blinder | Yellen | Fed | Obama

Blinder: Why I Support Yellen for Fed Chairman

Monday, 29 Jul 2013 12:05 PM

By Dan Weil

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As speculation percolates over whether President Obama will choose Janet Yellen or former Treasury Secretary Lawrence Summers as the next Federal Reserve Chairman, former Fed Vice Chairman Alan Blinder makes the case for Yellen.

In a Wall Street Journal opinion piece, Blinder notes several highlights of Yellen's tenure at the Fed, where she is now vice chairman herself.

"When the financial crisis started heating up in the summer of 2007, Janet Yellen was one of the first members of the FOMC [the Fed's policymaking Federal Open Market Committee] — probably even ahead of Chairman [Ben] Bernanke — to realize that the trouble could cause a major recession," Blinder writes.

Editor's Note:
Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

After its August 2007 meeting, just two months before the Great Recession began, the Fed expressed confidence about the economy and said its main worry remained inflation. However, Yellen expressed dismay with that view and was proven to be right.

Meanwhile, "perhaps the most important, but least understood, asset Janet Yellen would bring to the table is an ability to manage the fractious FOMC," he contends.

"Managing such a nearly unmanageable group requires a delicate blend of intellect, diplomacy and persuasiveness, plus the ability to disagree without being disagreeable — all quintessential Yellen traits."

Obama's choice of who will succeed Bernanke has created much more of a public fuss than past selections of new Fed chairmen, The New York Times reports.

For example, senators rarely get together to endorse a specific candidate for a top-level job. But a group of mostly liberal Senate Democrats, including leadership members Richard Durbin of Illinois and Patty Murray of Washington did just that.

They sent a letter to Obama last week in support of Yellen.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

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