Janet Yellen, the vice chairwoman of the Federal Reserve, was named the central bank’s chairwoman — the first woman to serve in the post.
President Obama made the announcement of Yellen’s ascension to Fed chief last week.
If confirmed by the Senate, Yellen would succeed Ben Bernanke and be the third consecutive Jewish economist to head the Federal Reserve. Bernanke, who is set to step down in January after serving since February 2006, had succeeded Alan Greenspan. While the math is in her favor — Democrats control the U.S. Senate and need to pick up only six Republican votes to clear any procedural roadblocks and secure her nomination — that doesn’t mean she will not have to endure some tough questions. One conservative group has already launched a campaign to stop Yellen from becoming the next head of the Federal Reserve, arguing her confirmation would lead to an expansion of easy money policies that would cause prices to soar.
Obama had favored his first Treasury secretary, Lawrence Summers, for the job. Summers, who also is Jewish, pulled out because of opposition among Senate Democrats who blame his policies favoring deregulation for slowing the economic recovery.
Professor Jonathan Wright, professor of economics at Johns Hopkins University, used to work with Yellen in the Federal Reserve. He said he expects her to follow mostly in Bernanke’s vain. He described Yellen as “a very strong academic scholar in macro and labor economics, but she also has the political skills to be an excellent Fed chairman.”
Wright said there are hopes that Yellen will maintain the low inflation rate, but also focus on improving the labor market.
“She may be more active in reducing unemployment,” he said, noting that Yellen cannot operate in a vacuum and that her role is more about “nudging and leaning the committee.”
He said she is not making any decisions unilaterally and there are expected to be some new “hawkish” board members.
“She will be starting with a depleted team and with adversaries,” Wright said.
The big focus, of course, is how Yellen will handle her role as a woman; she is the first women ever to fill such a role.
Wright said it is remarkable how few women there are in finance and central banking positions.
“She is the first [woman] to be a leader of any central bank in any major industrialized economy,” Wright noted. He said in some countries there are not even women on their governing councils.
Yellen grew into her role during the last 40 years. The current deficit in higher-ranking women in finance, he said, is likely a reflection of the attitudes of the 1970s and early 1980s. Still, Wright said, while things have changed to some extent, only about one-third of finance undergraduates at Hopkins are women. And, he noted, it is not projected that many of the women who start out in finance will stick with it.
“Times are certainly changing, but it is still true that there is a problem that there are too few,” said Wright. “Quite a few women start out in careers in finance, they do that as undergraduates, and then somehow they don’t seem to move on to the most senior ranks. It is too soon to see if that will be true for this [current] generation.”
Yellen and her husband, George Akerlof, a 2001 Nobel economics laureate, were active in the Bay Area Jewish community when Akerlof taught at the University of California, Berkeley.
Simone Ellin is senior features reporter for WJW’s sister publication, the Baltimore Jewish Times. JTA News and Features contributed to this article.