In Re Janet Yellen

News reports indicate that President Obama will nominate Janet Yellen as Federal Reserve Chairman. Here are a few interesting nuggets about Ms. Yellen.

She is a “Professor Emerita at the University of California, Berkeley‘s Haas School of Business” (source). Sorry, but UC Berkeley automatically makes my antennae go up.

(As an aside, Former Czech President Vaclav Klaus recently said, “I remember being asked by an American friend in Prague, ‘how strong is the belief in communism and Marxism in contemporary Czechoslovakia?’…My answer was, more than 35 years ago, ‘I guess there are more true believers in Marxism at the University of California in Berkeley than in my whole communist country.'”)

She is a “Trustee of the Economists for Peace and Security” (source). Uh oh:

Economists for Peace and Security (EPS) is a United Nations-registered, New York-based NGO which links economists interested in peace and security issues. Inspired by International Physicians for the Prevention of Nuclear War, it was founded in 1989 as Economists Against the Arms Race (ECAAR), before becoming Economists Allied for Arms Reduction (ECAAR) in 1993. It adopted its present name in 2005….

Notable trustees of EPS include Kenneth Arrow and Lawrence Klein (founding trustees); Amartya Sen, Robert Reich and Óscar Arias. James K. Galbraith was named Chair of the Board of Directors in 1996. (source)

She and her husband, George Akerlof, certainly make an interesting couple (source):

“They seem like a very close couple,” said Robert Shiller, a longtime friend of both and co-author with Mr. Akerlof. He describes Mr. Akerlof as a “free spirit” and Ms. Yellen as “more dignified.”

The couple became frequent collaborators on a variety of research topics….

“Whenever they would write a paper it became their whole life. It’s all they wanted to talk about,” said Christina Romer, a UC Berkeley economist, former Obama adviser and longtime friend of the couple….

Mr. Akerlof has skeptical views on free markets, which Ms. Yellen hasn’t discussed as a Fed official. His famous “markets for lemons” paper, published in 1970, used malfunctions in used-car markets to challenge economic orthodoxy about efficient markets and helped him win the Nobel Prize.

In a talk at Warwick last year, Mr. Akerlof argued that “the public and economists have too great an acceptance that whatever markets do is right.”

Robert Shiller, by the way, is a noted Keynesian (source).

“Yellen served as chair of President Bill Clinton’s Council of Economic Advisers from February 13, 1997 to 1999” (source). Oh.

Inflation hawks are concerned:

[Critics] worry that she would not be sufficiently concerned about the possibility that inflation will accelerate as the economic recovery gains strength. If nominated, she could face opposition from Senate Republicans who have repeatedly expressed concern that the Fed’s campaign would destabilize financial markets and make controlling the pace of inflation more difficult (source).

Forbes is not impressed:

Implicit in Yellen wanting to run the Fed is a belief that the cost of credit, easily the most important price in the world after the dollar, should be manipulated by her and other supposedly wise individuals laboring alongside her. Think about the stunning arrogance that underpins such a belief. The 20th century was in a sick-inducing way a gift to humanity for showing in murderously brutal fashion the horrors of central planning, yet Yellen honestly believes that she can divine the cost of credit better than can the infinite actions and decisions taking place every millisecond among billions of humans in the private markets (source).

Which seems consistent with her husband’s skepticism regarding the wisdom of markets, to say nothing of the Obama Administration’s.

“In 2012, she was elected Distinguished Fellow of the American Economic Association” (AEA) (source).

William McEachern, an economist at the University of Connecticut, analysed the 2004 campaign contributions of AEA members, committee members, officers, editors, referees, authors, and acknowledgees. He found that 2004 contributions heavily favored the Democratic Party, especially among leadership positions. He argues that this contradicts AEA’s claim of non-partisanship, that it harms the economics profession by favoring certain opinions over others, and that it cripples the spirit of discussion that AEA seeks to promote and may lead to intellectual complacency (source).

Given this Administration’s penchant for appointing outright socialists, I guess we could do worse.


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