It isn’t exactly news that President Obama will be nominating Janet Yellen to replace Ben Bernanke as head of the Federal Reserve. (The official announcement will take place on Wednesday afternoon.) Since Larry Summers withdrew his name from contention last month, Yellen has been the prohibitive favorite to get the job. A former professor of economics at Berkeley, she has extensive experience at the Fed: since 2010, she’s been Bernanke’s deputy as its vice-chair.
In the coming days, there will be much more to say about Yellen’s economic beliefs, her approach to monetary policy, and the challenges she will face in taking over from Bernanke next February. (Earlier this year, when her name surfaced as a serious candidate, I took a quick look at her background.) For now, though, let’s dwell for a moment on the fact that she will be the first woman to lead the Fed. Indeed, if you don’t count Russia as part of the West, she will be the first woman to head a central bank in any big Western nation.
That matters in a number of ways.
On a trivial, but not entirely inconsequential, level, Yellen’s extra X chromosome will ensure that she receives more public attention than your average gray-haired, male central banker would. People who work in the financial markets hang on every word that a Bernanke or a Greenspan mutters. But most regular folk don’t take much notice of central bankers except when they raise interest rates or bail out a stricken financial firm. Yellen, like Christine Lagarde, the Frenchwoman who took over the International Monetary Fund, in 2011, will be looked at a bit differently. However much she tries to avoid it—and she will probably try pretty hard—she will be regarded as something of a celebrity.
And there’s nothing necessarily wrong with that: she deserves the attention. Ever since 1962, when she graduated from Fort Hamilton High School, in Bay Ridge, Brooklyn, she has been leaving her mark in fields that traditionally have been heavily male-dominated: the economics profession, the world of offering policy advice to politicians, and, finally, central banking.
In all of these areas, Yellen has made significant contributions that amply qualify her for the Fed post. This doesn’t mean that she has hitherto been an absolute standout in every area. As a professor, she wrote some innovative and influential papers about unemployment and other subjects, bravely resisting the conservative orthodoxy that conquered U.S. economics in the nineteen-eighties and nineties. Still, purely in terms of academia, her husband and occasional co-author George Akerlof, who shared the 2001 Nobel Prize, partially eclipsed her. When it came to gaining the ear of Presidents and other powerful politicians, Summers and others have (until recently) often proved more adept. Inside the Fed, Yellen has long been widely respected for, among other things, her smarts, her relatively early recognition of the dangers of the housing bubble, her forecasting record, and her ability to translate complicated issues into readable speeches and presentations. Inevitably, though, she has been overshadowed a bit by Bernanke and his predecessor, Alan Greenspan, who was chairman of the central bank back in the mid-nineties, when she was first appointed to its board of governors.
In a way, though, these things just add to Yellen’s achievement, and to the significance of her appointment. Yellen isn’t Wonder Woman. But by dint of her intelligence, her technical expertise, her judgement, her creativity, her work ethic, and her willingness to coöperate with people rather than elbow them aside, she has risen to the top of the one of the most demanding professions there is. That, surely, makes her a role model for all women.
“Tonight, I feel reassured that my daughter’s economic future is in good hands,” Justin Wolfers, an economist at the Brookings Institution, wrote in a Bloomberg column hailing Yellen’s appointment. “I also plan to tell her that she, too, can grow up to become the most powerful economist in the world.”
Anybody who spends time around the world of professional economists can’t help but notice how few women there are in senior jobs. In policy-advisory positions and central banking, they are even thinner on the ground. Along with Alice Rivlin, Christina Romer, and Laura Tyson, Yellen is one of the handful who have made it to the top of the pile, or near it. Last month, after another round of stories appeared suggesting that Summers was going to be Obama’s choice, Rivlin, Romer, and Tyson signed an open letter calling for Yellen to be appointed. So did about two hundred economists, many of them men, like Joseph Stiglitz and Alan Blinder.
The authors and organizers of the letter—Heidi Hartmann, the president of the Institute for Women’s Policy Research, and Joyce Jacobsen, the dean of social sciences at Wesleyan—didn’t mention Summers explicitly. But in talking up Yellen’s character and record, they made it patently clear that she didn’t share very many traits with her combative alpha-male rival for the Fed post:
Of course, it may be something of a canard to suggest that women are more team-oriented and less ego-driven than men. Certainly, there are counter-examples. Margaret Thatcher wasn’t one for heavily weighting the views of her colleagues. The mild-mannered Bernanke, on the other hand, has always gone to great pains to build a consensus on the Fed’s board.
Come February, we will start to find out what sort of leader and policy-maker Yellen makes. At sixty-seven, she is fifteen years older than Bernanke was when he took over the Fed, in 2006, and six years older than Greenspan was when he got the job, in 1987. Judging by appearances, she is still full of vim and vigor. Let us hope so. As someone who shares Yellen’s belief that the Fed should do all it can to promote full employment, but who also worries about it getting stuck in a doom loop of encouraging speculative booms followed by busts, and who isn’t entirely convinced about the virtues of “forward guidance”—a policy tactic that she has championed—I wish her well for when she moves into the Fed chairman’s (sic) cavernous office overlooking Constitution Avenue. And as the father of two young daughters myself, I join with Wolfers in saluting her for providing them, and other girls, with an example to emulate.
Janet Yellen may or may not turn out to be a great leader of the Fed. On her first day in office, she will already be a historic one.
Photograph by Sam Hodgson/Bloomberg via Getty.
