President Obama will announce his nomination for Federal Reserve chair today, and that person will be Janet Yellen, making her the first woman to hold the job. The months leading up to this nomination have been uncharacteristically divisive among liberals: Obama's top pick, former Treasury Secretary Larry Summers, dropped out after commentators and Senate Democrats objected him. Now, Obama will bow to liberal Democrats, women's groups, and economists by giving them the Fed chief they wanted.
Economist Justin Wolfers explains why he's "very happy about Janet Yellen," who is currently Fed vice chair, in a Bloomberg View column today: "It’s notable that through the drawn-out public debate over who should replace current Fed Chairman Ben Bernanke, not a single economist who has ever worked with Yellen has had a bad word to say about her." Jim Dean at Democracy for America said in a statement, "If President Obama nominates Janet Yellen ..., he'll both be putting forward the best person for the job and giving the Senate a tremendous opportunity to make history by confirming her as the first woman to chair" the Fed. Even Yellen's high school friends have come out of the woodwork to congratulate her. One classmate at Brooklyn's Fort Hamilton High School remarked that Yellen was:
A classic '60s liberal. She has great faith in education as an answer to a lot of societal problems.
It's Yellen's liberalism that's made her a favorite among Democrats and women's groups. Daniel Gross argues in The Daily Beast today that Yellen's appointment will be historic not just because she's a woman, but because she's a true Democrat. While some have criticized her for caring more about unemployment that inflation, Stephen Oliner, a scholar at the American Enterprise Institute former Fed adviser, argued in September: “The market does have it wrong if they think she is going to be soft on inflation. She has very little tolerance for inflation above the 2 percent target.”
Yellen does still have her detractors, and some of them are sexist. John Tammy argued in Forbes Wednesday that we should beware a Yellen Fed chairmanship because of Yellen's ambition: "Yellen wanted to be the Fed Chairman, Yellen, like Bernanke and Greenspan before her, politicked to be the Fed Chairman. Policies and beliefs matter, but the citizenry should fear Yellen simply because she wanted to run the Fed." But Yellen hasn't made any public statements about how much she wanted the job, and she's actually downplayed the likelihood she'd get it. Even so, this criticism doesn't really make sense — obviously the nominee for Fed chair should want the job. Back in August, White House sources worried that Yellen was too independent to fit in the Obama administration.
Obama is expected to make his announcement at 3 p.m. today.