Ques­tions arise over de­par­ture of first woman to lead Fed

Manila Bulletin - - Views • Features -

WASH­ING­TON, DC, UNITED STATES (AP) — Nearly four years into Janet Yellen’s his­to­ry­mak­ing turn as the first woman to lead the Fed­eral Re­serve, the econ­omy is grow­ing, the un­em­ploy­ment rate is low, and the stock mar­ket is set­ting record highs.

Pres­i­dent Don­ald Trump says Yellen is a “spec­tac­u­lar per­son” and do­ing a “ter­rific job.” But he’s not of­fer­ing her a sec­ond term, mak­ing her the first Fed chair in nearly 40 years not to be asked back.

Some are ques­tion­ing why the pres­i­dent is mov­ing aside the glass­ceil­ing-shat­ter­ing econ­o­mist.

“You have to guess gen­der has some­thing to do with this,” said Heidi Hart­mann, pres­i­dent of the In­sti­tute for Women’s Pol­icy Re­search. “I would haz­ard a guess that most Fed lead­ers who have done as well as Janet have not been re­placed.”

Hart­mann, an econ­o­mist who pushed for Yellen’s ap­point­ment, added that for­mer chair Alan Greenspan “man­aged to tran­scend par­ties. Why can’t Janet?”

Trump an­nounced Thurs­day that that he would re­place Yellen at the end of her term in early Fe­bru­ary. He is nom­i­nat­ing Repub­li­can board mem­ber Jerome “Jay” Pow­ell to take over the pow­er­ful job, which steers in­ter­est-rate pol­icy and plays an es­sen­tial role in main­tain­ing eco­nomic sta­bil­ity.

The past three chairs of the Fed have all served two or more terms, win­ning ap­proval of pres­i­dents from both par­ties. Yellen was nom­i­nated in 2013 by Pres­i­dent Barack Obama, af­ter serv­ing as vice chair­woman.

Trump, who at­tacked Yellen on the cam­paign trail, has been more pos­i­tive of late.

As the pres­i­dent an­nounced he was go­ing else­where for a Fed chair, he said of Yellen: “For the past four years, she has served with ded­i­ca­tion and de­vo­tion and we are grate­ful for her to­tal com­mit­ment to pub­lic ser­vice.”

But Yellen has not al­ways been in line with Trump’s in­ter­ests, for ex­am­ple, tak­ing a cau­tious ap­proach to rais­ing in­ter­est rates. She has been an out­spo­ken ad­vo­cate for the stricter fi­nan­cial reg­u­la­tions that took ef­fect in 2010 to pre­vent an­other cri­sis.

Stephen Moore, an econ­o­mist at the Her­itage Foun­da­tion who was a se­nior eco­nomic ad­viser to Trump’s cam­paign, said Trump wants some­one who will sup­port loos­en­ing reg­u­la­tions. He also said the pres­i­dent sim­ply wanted his own per­son in place.

“The job of the Fed chair is not just to be the lead per­son on mone­tary pol­icy. This is the chief eco­nomic voice of the na­tion,” said Moore. “She’s not with the pro­gram.”

Ever a show­man, Trump teased his plans for months. He pub­licly considered sev­eral al­ter­na­tives to Yellen — all men — but also praised her dur­ing a re­cent in­ter­view with Fox Busi­ness.

“You like to make your own mark, which is maybe one of the things she’s got a lit­tle bit against her, but I think she is ter­rific. We’ve had a great talk and we are ob­vi­ously do­ing great to­gether, you look at the mar­kets,” Trump said.

To Sen. El­iz­a­beth War­ren, D-Mass., Trump’s de­ci­sion shows “his fo­cus is not on cre­at­ing jobs or rais­ing wages or stop­ping an­other fi­nan­cial cri­sis, but on re­vers­ing any de­ci­sion Pres­i­dent Obama made.”

Diane Swonk, chief econ­o­mist at DS Eco­nom­ics, praised Yellen’s legacy say­ing that “she got to make the pivot from cri­sis-era poli­cies to stamina. Un­der her we got our sec­ond wind.”

Swonk said not giv­ing Yellen an­other term was “highly un­usual” given her qual­i­fi­ca­tions. But she added that “ev­ery pres­i­dent does have the right to choose their own Fed chair.”

Yellen, who headed the Fed­eral Re­serve Bank of San Fran­cisco and has been an eco­nom­ics pro­fes­sor at the Univer­sity of Cal­i­for­nia at Berke­ley, sought to pave the way for more di­ver­sity within her pro­fes­sion. In a speech at Brown in May, she noted that “even in my own field of eco­nom­ics, women con­sti­tute only about one-third of PhD re­cip­i­ents, a num­ber that has barely budged in two decades.”

Dean Baker, co-founder of the Cen­ter for Eco­nomic and Pol­icy Re­search think tank, said Yellen’s fo­cus on di­ver­sity has “re­ally mat­tered.” He also praised her lead­er­ship record, say­ing that by “any ob­jec­tive mea­sure” there has been ma­jor progress with the econ­omy.

Baker said pass­ing over Yellen was no­table. He added: “There has been a tra­di­tion of reap­point­ing peo­ple un­less they’ve been a dis­as­ter.”

Yellen her­self is­sued a state­ment con­grat­u­lat­ing Pow­ell. She said she was “com­mit­ted to work­ing with him to en­sure a smooth tran­si­tion.”

But she did not at­tend the Rose Gar­den an­nounce­ment of her suc­ces­sor, as past Fed chairs have done.

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