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Janet Yellen for Fed Chair

August 1, 2013
Janet Yellen

Janet Yellen

I generally refrain from using this blog to comment on issues outside food politics. But the current debate over who should be the next chair of the Federal Reserve Bank is a topic so important that I thought I’d make an exception.

For a reason that totally escapes me, President Barack Obama is apparently considering nominating Larry Summers to head the Federal Reserve Bank when Ben Bernanke’s term expires in January 2014. The Chair of the Federal Reserve is arguably one of the most important positions in the US economy, responsible for setting and managing US monetary policy and balancing between the competing objectives of keeping both inflation and unemployment rates low. It’s a position that most people (outside the economic policy realm) don’t think about a great deal—until something goes dramatically wrong.

Larry Summers is the wrong pick for the position. He was President Clinton’s Secretary of Treasury and was Director of the White House Council of Economic Advisors for President Obama. But he’s also got considerable baggage.

As President of Harvard University, Summers made waves by suggesting that the under-representation of women in science, engineering, and mathematics could the result of “different availability of aptitude at the high end” rather than patterns of discrimination and socialization. Summers was forced to resign after a no-confidence vote by faculty.

And as Chief Economist of the World Bank, Summers advocated expanding the global toxic trade, stating in a memo that “he economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that…. I’ve always thought that under-populated countries in Africa are vastly underpolluted.”

While in the Clinton White House, Summers was a strong opponent of US participation in the Kyoto Protocol negotiations. He was also one of the key architects of repealing the Glass-Stegall Act—a move that directly contributed to the collapse of global financial markets in 2008.

Summers has many proponents, particularly within White House circles. His defenders describe him as “brilliant”—I have no doubt they are right. He’s won the Nobel Prize in Economics.  But the other frontrunner for the position—Janet Yellen—is equally bright while carrying much less baggage. Congressional Democrats have already rallied behind Yellen, forcing some interesting theatrics from the White House over the weekend.

Yellen is currently the Vice Chair of the Federal Reserve, where she gained a reputation as a strong regulator and one of the few economsits who sounded the alarm on the subprime mortgage crisis before it broke. It appointed, she would also be the first woman to head the Fed.

A petition is circulating to request President Obama name Janet Yellen to head the Fed. I’ve already signed it, and I encourage you to think about doing the same.

 

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