Obama to appoint Yellen as Fed chair

posted at 9:21 am on October 9, 2013 by Ed Morrissey

It took long enough for Barack Obama to make this decision on Ben Bernanke’s replacement at the Federal Reserve.  The President turned the choice into a months-long marathon, so much so that his purported favorite choice, Larry Summers, ended up suffering the figurative death by a thousand cuts along the way.  Even when it became obvious that Bernanke deputy Janet Yellen was his only realistic option after Summers’ withdrawal, the White House let it be known that they were looking around for a better candidate, until finally acknowledging the inevitable three weeks later.

So, er … congratulations, Janet Yellen, or something:

President Obama on Wednesday will nominate Federal Reserve Vice Chair Janet Yellen to lead the U.S. central bank, officials said, selecting a renowned economist focused on combating unemployment for one of the most powerful positions in the world.

Yellen would become the first female chief of the nation’s central bank — or any major central bank. As Fed chairman, she would have vast power over the economy, and her record suggests that she would use it to continue for as long as possible a Fed stimulus program aimed at boosting growth. She would also be the top regulator of the nation’s financial system, an area in which less is known about her views.

Yellen, 67, who was chairman of the Council of Economic Advisers in the Clinton administration, would become the first Democrat to lead the Fed since Paul A. Volcker stepped down in 1987.

“Markets will be comfortable with a familiar face,” said Michael Feroli, chief U.S. economist at JPMorgan Chase.

Reuters concurs:

U.S. President Barack Obama will nominate Fed number two Janet Yellen on Wednesday to run the world’s most influential central bank, providing some relief to markets that would expect her to tread carefully in winding down economic stimulus.

The nomination will put Yellen on course to be the first woman to lead the institution in its 100-year history. The advocate for aggressive action to stimulate U.S. economic growth through low interest rates and large-scale bond purchases would replace Ben Bernanke, whose second term as Fed chairman expires on January 31.

If confirmed by the U.S. Senate, which is expected to endorse her, she would provide continuity with the policies the Fed has established under Bernanke. Analysts say she would move cautiously in reining in policies in place to shore up the world’s largest economy.

The markets certainly can’t be impressed with the vote of confidence given to Yellen by the nominating process. They are probably more cheered by the reduced need to do tea-leaf reading through the evolution in executive management.

How difficult will it be for Yellen to get confirmed in the Senate?  While the more progressive Senate Democrats pushed for Yellen over the moderate faction’s support for Summers, there isn’t any indication that the caucus as a whole will be split now on the nomination, or that the issue was ever about policy rather than personalities.  Republicans might give Yellen a hard time, one in particular, according to National Journal:

More than most nominees, the pick for Fed director has traditionally been the prerogative of the president, as senators have been reticent to risk the market turmoil that could result from a prolonged battle over the bank’s leader. But at a time when Republicans have demonstrated their willingness to use any and all means available to leverage policy concessions, there’s no reason to believe that that precedent will be enough to usher Yellen through an easy confirmation.

Indeed, Sen. Ted Cruz, R-Texas, has already said he’ll use the nomination to look for leverage to pass legislation requiring a deeper audit of the Federal Reserve, a long-time dream of former Rep. Ron Paul, another Republican from Texas, that has become a mainstream goal of the modern GOP.

“That gives the opportunity to leverage,” Cruz said this summer when asked about Obama’s upcoming Fed nominee. “I certainly hope that, working together, we could force a vote on the Audit the Fed bill.”

In other words, even that isn’t about Yellen in particular; Cruz would have pushed that with any nominee. And Cruz might find himself rather isolated after the last few weeks.  Don’t expect anything but a few tough questions in the hearing and probably 70 or more votes for confirmation on the Senate floor.  No one wants to see Tim Geithner’s name come up again, after all.


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She may get to expand QE-Forever by quite a bit if certain foreign countries decide to get out of the Treasury market.

Steve Eggleston on October 9, 2013 at 9:23 AM

Marxist appoints Marxist.

Water is wet.

bgibbs1000 on October 9, 2013 at 9:24 AM

From that picture on the home page… are you sure it’s not Yeltsin he’s appointing?

Shump on October 9, 2013 at 9:26 AM

Meet the new buffoon, same as the last one.

jephthah on October 9, 2013 at 9:27 AM

She’s a former Berkeley perfesser which means she’s just as much a leftist tool as Dog Eater. Look for her to wear comfortable shoes on a regular basis.

Bishop on October 9, 2013 at 9:34 AM

I will watch and read – she certainly has the resume for the job – I have no idea what she is all “about”.

Time will tell.

jake-the-goose on October 9, 2013 at 9:35 AM

Look for her to wear comfortable shoes on a regular basis.

Bishop on October 9, 2013 at 9:34 AM

.. and join the Supreme Court’s softball team.

Joe Mama on October 9, 2013 at 9:36 AM

Great another economist from Berkeley. Christina Romer was truly shocked when the socialist dogma she taught for decades didn’t work in the real world. Now we appoint this ugly dude from the same school to a sensitive job in the Fed?

Happy Nomad on October 9, 2013 at 9:39 AM

From that picture on the home page… are you sure it’s not Yeltsin he’s appointing?

Shump on October 9, 2013 at 9:26 AM

I was wondering what fashionable salon she goes to, to try and distract attention from her non-compliance with Michelle’s “let’s move” campaign.

Fenris on October 9, 2013 at 9:40 AM

Print mo’ money yo!

iwasbornwithit on October 9, 2013 at 9:41 AM

First woman….. are you sure that’s not Friar Tuck?

Free Indeed on October 9, 2013 at 9:41 AM

… selecting a renowned economist focused on combating unemployment for one of the most powerful positions in the world.

Another liberal f*cking bureaucrat, of course, who never ran a business much less a bank.

“Renowned economist” is media code for an economist that lock-steps with Keynes whereas a “controversial economist” is one who follows Friedman.

Perfect choice, however, for one of the most corrupt non-governmental organizations the world has ever known.

TXUS on October 9, 2013 at 9:42 AM

First woman….. are you sure that’s not Friar Tuck?

Free Indeed on October 9, 2013 at 9:41 AM

It looks more like Benny Hill to me.

Happy Nomad on October 9, 2013 at 9:43 AM

Approval coming of Yellen from THE OBAMA FIVE in 4…..3…..2…

Krauthammer, Gigot, Robert Costa, Kathleen Parker, and Byron York…….Obama’s new “Conservative” mouthpieces.

Sup with the Devil…….you smell like smoke you “journalists”.

PappyD61 on October 9, 2013 at 9:54 AM

Final nail in coffin – obama’s plan is nearly complete.

Pork-Chop on October 9, 2013 at 9:56 AM

How difficult will it be for Yellen to get confirmed in the Senate? While the more progressive Senate Democrats pushed for Yellen over the moderate faction’s support for Summers…

That’s a bit scary.

farsighted on October 9, 2013 at 9:59 AM

It looks more like Benny Hill to me.

Happy Nomad on October 9, 2013 at 9:43 AM

The two most dangerous places in the world: Standing between her and a really hot chick or between her and a Big Mac.

TXUS on October 9, 2013 at 10:00 AM

Final nail in coffin – obama’s plan is nearly complete.

Pork-Chop on October 9, 2013 at 9:56 AM

Almost. He still has to declare martial law and “Officially” suspend The Constitution.

Oldnuke on October 9, 2013 at 10:00 AM

Time once again to play “Guess My Gender.”

chewmeister on October 9, 2013 at 10:03 AM

Final nail in coffin – obama’s plan is nearly complete.

Pork-Chop on October 9, 2013 at 9:56 AM
Almost. He still has to declare martial law and “Officially” suspend The Constitution.

Oldnuke on October 9, 2013 at 10:00 AM

Kinda makes my question about if whether or not Bernanke is now allowed to leave the country moot.

onomo on October 9, 2013 at 10:04 AM

Bishop on October 9, 2013 at 9:34 AM

But, is she part Injun too?

chewmeister on October 9, 2013 at 10:04 AM

Does this guy even KNOW any men?

Cleombrotus on October 9, 2013 at 10:05 AM

From that picture on the home page [of Janet Yellen]… are you sure it’s not Yeltsin he’s appointing?

Shump on October 9, 2013 at 9:26 AM

If you cross Janet Reno with Boris Yeltsin…

faraway on October 9, 2013 at 10:06 AM

Damn, it’s beginning to look like a regular hen house in here.

Cleombrotus on October 9, 2013 at 10:07 AM

RIP US Dollar

Oil Can on October 9, 2013 at 10:08 AM

But does she know how to use Turbo Tax?

mankai on October 9, 2013 at 10:13 AM

But does she know how to use Turbo Tax?

mankai on October 9, 2013 at 10:13 AM

I had forgotten that one. This administration is a fount of screwups.

faraway on October 9, 2013 at 10:15 AM

Why are prog women so homely? Yeesh!

Key West Reader on October 9, 2013 at 10:18 AM

What’s that?
It’s Pat.

annoyinglittletwerp on October 9, 2013 at 10:24 AM

Oh, YELLEN! I thought you said Yeltsin.

Cleombrotus on October 9, 2013 at 10:26 AM

Damn, it’s beginning to look like a regular hen house in here.

Cleombrotus on October 9, 2013 at 10:07 AM

I used to figure looks shouldn’t matter, and sometimes there’s nothing you can do about it, so I wouldn’t make fun of them. Then a scurrilous mob of lefties came after the beautiful and virtuous Sarah Palin.

I no longer care. Screw her and the a$$ she rode in on.

Fenris on October 9, 2013 at 10:27 AM

Ambrose Evans-Pritchard at the Telegraph seemw to think she knows what she’s doing.

To hear him tell it, she’s been a voice in the wilderness calling BS on every wrong-headed decision made by the Fed since Alan Greenspan’s tenure as chairman;

Note that she confronted Greenspan head-on in 1996, pushing for pre-emptive rate rises to choke inflation and wean the economy of cheap credit. She was entirely right to do so. That was the moment when the Fed began to make a series of fatal errors, becoming addicted to ever lower real interest rates. Nobody called her a dove then.

She was on the other side a decade later during those crucial months before the subprime housing crash, quick to sense the danger of a chain reaction through the shadow banking system. Ben Bernanke and the FOMC majority scoffed at worries that the subprime debacle was the tip of an iceberg.

“I feel the presence of a 600-pound gorilla in the room, and that is the housing sector. The risk for further significant deterioration, with house prices falling and mortgage delinquencies rising, causes me appreciable angst,” she told Fed colleagues in June 2007, a 15 months before the storm hit.

The transcripts show that she clashed with New York Fed chief William Dudley in December 2007 over the risks of subprime mortgage defaults, which is telling since Dudley (ex Goldman Sachs) was supposed to be the official with his finger on the market pulse. “The possibilities of a credit crunch developing and of the economy slipping into a recession seem all too real. At the time of our last meeting, I held out hope that the financial turmoil would gradually ebb and the economy might escape without serious damage. Subsequent developments have severely shaken that belief,” she said.

She was absolutely right again. We now know that the US economy was already in recession by then (though the Fed did not then have the data). We now know too from a devastating book by the Richmond Fed’s Robert Hetzel – “The Great Recession” – that the Fed itself was the chief cause of the disaster that unfolded in 2008. The FOMC was far too tight. It let the M2 money supply implode in early 2008. That is what led to the Lehman, AIG, Fannie/Freddie disasters. The rest is noise.

Janet Yellen was not to blame. She later backed QE to the hilt, fighting a chorus of amateur alarmists who claimed that inflation was poised to take off. She was again proved right. Core inflation in the US is currently hovering near a half century low. The greater danger is still deflation.

Of course, he also says that she believes that the recession is cyclical, not structural, and that she will therefore pursue policies that induce business expansion to create jobs. This would be in line with her advocacy of quantum easing (aka “monetization of debt”).

Or IOW, she will be printing money as fast as she can.

Personally, I think she was right- ten years ago. But the situation has changed, the recession is now in fact structural and not cyclical, and what would have prevented the FM-Squared meltdown won’t help matters today.

Sort of like taking two fish in the engine room. If you’re starting the bilge pumps half-an-hour later without having first cofferdammed the hole, it’s a little late to do either one.

clear ether

eon

eon on October 9, 2013 at 10:27 AM

With Obamacare ready to roll fully January 1st, I’m sure Yellen will be ready to put out maximum QE. Look for commodity prices to go higher than they’ve ever gone before O’s second term is done.

rickv404 on October 9, 2013 at 10:29 AM

Claude Rains in drag

Rio Linda Refugee on October 9, 2013 at 10:30 AM

I used to figure looks shouldn’t matter, and sometimes there’s nothing you can do about it, so I wouldn’t make fun of them. Then a scurrilous mob of lefties came after the beautiful and virtuous Sarah Palin.

I no longer care. Screw her and the a$$ she rode in on.

Fenris on October 9, 2013 at 10:27 AM

I know. I shouldn’t make fun either, but there’s something strange about the fact that this guy seems to go out of his way to choose women for all these positions.

On some level, I can’t overlook the possibility that it’s part of his resentment of Western culture’s traditions which he seems intent on undermining at every juncture. It’s part of his Marxist upbringing. Either that or he’s just such a momma’s boy that he lets Jarret make all his important decisions for him.

Or maybe I’m just paranoid.

Cleombrotus on October 9, 2013 at 10:53 AM

Does this guy even KNOW any men?

Cleombrotus on October 9, 2013 at 10:05 AM

Michelle

ziggyville on October 9, 2013 at 11:25 AM

How difficult will it be for Yellen to get confirmed in the Senate? While the more progressive Senate Democrats pushed for Yellen over the moderate faction’s support for Summers…

So Tea Party conservatives push on Boehner and McConnell and are called extremists and the root of all evil, mass hysteria ensues.

When the progressive wing of the Democrat party torpedoes a qualified candidate in favor of someone whose superior qualification is what is under their skirt, it is business as usual.

Got it.

Democrats lay down for the progressive wing and we hear crickets.

The GOP makes minor token concessions to the conservative wing and there is mass hysteria.

weaselyone on October 9, 2013 at 11:27 AM

Cleombrotus on October 9, 2013 at 10:53 AM

I thought you were commenting on the commenters here, but I guess you were commenting on Obama’s appointments. I guess either is appropriate.

Fenris on October 9, 2013 at 11:27 AM

Why are prog women so homely? Yeesh!

Key West Reader on October 9, 2013 at 10:18 AM

This always leads me to the chicken and egg question. Does progism make them ugly or do they go into progism because they have no life otherwise?

slickwillie2001 on October 9, 2013 at 11:30 AM

More than most nominees, the pick for Fed director has traditionally been the prerogative of the president, as senators have been reticent to risk the market turmoil that could result from a prolonged battle over the bank’s leader. But at a time when Republicans have demonstrated their willingness to use any and all means available to leverage policy concessions, there’s no reason to believe that that precedent will be enough to usher Yellen through an easy confirmation.

I must have missed this same Senate confirmation hand wringing when Obama wanted to nominate Summers and the progressive Senators tanked his nomination. Did the progressives also “risk the market turmoil that could result from a prolonged battle over the bank’s leader” during this months long decision in who to nominate?

Why did the progessive wing of the democratic party oppose Summers? I think they opposed Summers because Obama is African American. There is no other possible reason.

weaselyone on October 9, 2013 at 11:32 AM

Cruz, I love ya, but you’re dreaming. Mitch and the boys will pull another rug out from under this move to try and audit the Fed. There is to be no transparency in this regime, ever.

Kissmygrits on October 9, 2013 at 11:51 AM

Why are prog women so homely? Yeesh!
Key West Reader on October 9, 2013 at 10:18 AM

Well, for those lacking in looks/strength/intelligence etc, some just assume they’ll never become successful on their own abilities/assets/attributes, and some of those go all-in for the lib/proggie redistributionist ‘guaranteed-equal-outcome’ theology.

And some of those rise to the top of that ‘religion’, and I think it helps to have really clear external evidence that ‘you didn’t build that‘.

Other libs/proggies are more likely to support you if they can clearly see you won’t abandon the ‘religion’ because what would you do then? Kinda like being a ‘made man’ in the mafia… you have no realistic alternatives that would allow you to live the same comfortable lifestyle.

Marcola on October 9, 2013 at 12:12 PM

Why do you have a picture of Bob Keeshan on the front page?

mrt721 on October 9, 2013 at 12:18 PM

Rejoice: the Yellen Fed will print money forever to create jobs

We now know where we stand. Janet Yellen is to take over the US Federal Reserve, the world’s monetary hegemon, the master of all our lives.
The Fed will be looser for longer. The FOMC will continue to print money until the US economy creates enough jobs to reignite wage pressures and inflation, regardless of asset bubbles, or collateral damage along the way…
This leaves me deeply uneasy. We are surely past the point where we can keep using QE to pump up asset prices…

Marcola on October 9, 2013 at 12:26 PM

Why do you have a picture of Bob Keeshan on the front page?
mrt721 on October 9, 2013 at 12:18 PM

Captain Kangaroo, meet Captain Kew-ee-too.

Marcola on October 9, 2013 at 12:28 PM

Fenris on October 9, 2013 at 11:27 AM

Not the comments. Most are too funny.

Cleombrotus on October 9, 2013 at 12:43 PM

On top of being the worst preez ever, add that he had the Fugliest cabinet Evah, what with this alternative life styler and that little freaky monkey over at Energy.

msupertas on October 9, 2013 at 12:47 PM

While the more progressive Senate Democrats pushed for Yellen over the moderate faction’s support for Summers,

Only a suggestion, but “progressive” is their own label, designed to avoid being called “liberal.” I don’t know a single liberal Democrat who refers to themselves as “progressive.”

By adopting the label, we only buy into the subterfuge.

IndieDogg on October 9, 2013 at 12:56 PM

While the lady is clearly qualified and an a match, ideologically with the administration, it is also clear that she was chosen because she’s a she. I don’t know why PBHO resisted her in favor of Summers, if he did, but I was never in doubt that she would get the job.

We have our first black POTUS. We will soon have our first female Fed chief. And I hate to say it, but it looks to me as though we will have our first female POTUS in 2017. The creation of firsts has no worse basis for decision making but that is the track this nation is on.

MJBrutus on October 9, 2013 at 3:35 PM

I guess I’ll keep buying gold and silver!

Colony14 on October 9, 2013 at 8:43 PM