. . World News – CA – Janet Yellen to head Joe Biden’s Treasury Department. What does it stand for?

Both progressives and conservatives can find out what they like about the former Fed Chairman

In the first episode of the « Harry Potter » series, the protagonist stumbles over the mirror of Erised. Everyone who looks in the mirror sees the « deepest, most desperate desires » of their heart reflected in themselves. There’s a touch of Erised about President-elect Joe Biden’s decision to appoint Janet Yellen as the next Secretary of the Treasury, to be announced Nov.. November was reported. No economist is more qualified for the job than Ms. Yellen, a former Federal Reserve chairman and well-respected academic. Perhaps more important for both a political and an economic role, however, is that people from the progressive left to the conservative right can find something they like.

In today’s political configuration, this is important. Mr Biden must bridge a split in the Democratic Party between ordinary centrists and seedy millennial socialists. And before she becomes Treasury Secretary, Ms. Yellen must be approved by the Senate, which the Republicans currently control. That hurdle excluded candidates like Elizabeth Warren, a Massachusetts Senator who many Republicans would never approve because she is viewed as too hostile to free markets and the financial industry.

In the days leading up to the announcement, Washington insiders believed the race was between Ms. Yellen and Lael Brainard, a Fed governor. Some preferred Ms. Brainard on the grounds that she had more experience in business economics, others because she was younger than Ms. Yellen and would therefore better compensate for an older president. Left-wing Democrats were particularly fond of Ms. Brainard’s financial weakness.

Nevertheless, Ms. Yellen has many advantages of her own. An accomplished economist originally specializing in labor economics, she is the president of the American Economic Association, the pre-eminent learned society in the field. (There are also few better-loved people at work; Wonks hop their collars in homage to one of Ms. Yellen’s fashion nicks. ) She was a highly competent chairman of the Fed between 2014 and 2018 and clearly communicated the central bank’s intentions in advance so as not to surprise investors. She is less likely to dive into the kind of scratches that Steven Mnuchin, Donald Trump’s Treasury Secretary, is in. The latest is a dispute with the Fed over the right direction for economic policy.

The genius in choosing Ms. Yellen lies in the fact that people of all political beliefs can find a reason to cheer her appointment. That said, it will almost certainly be ratified by the Senate. Take monetary policy. Hawks notes that the Fed raised rates from near zero to one, under Ms. Yellen’s watch. 25-1. 5%. Pigeons counter that hawks were over-represented on the collective bargaining board at the time and that Ms. Yellen did a good job keeping them in check.

The situation is similar with financial policy. Just before Mr. Trump became president, Ms. Yellen argued that « obviously fiscal policy is not needed to incentivize the rise to full employment ». . She is a board member of the Committee on Responsible Federal Budget, an organization that spends a lot of time warning people of the dangers of high government debt. During the pandemic, however, Ms. Yellen spoke out in favor of « extraordinary tax support ». . In June she signed a letter stating, “Congress must adopt another recovery package. ”

Adopting another stimulus bill could be your first big task. Republicans and Democrats could not agree on a replacement for the bill passed in April, with particular disagreement over the size of the eventual package, although it is now clear that the economic recovery is slowing. It is very much to be expected that the sheer strength of a person could help break the impasse, not least because Republicans are likely to retain control of the Senate for a while. But if anyone can, it can be Ms. Yellen.

Dig Deeper: Read our latest coverage of the President’s transition, then subscribe to Checks and Balance, our weekly newsletter and podcast on American Politics.

Published since September 1843 to participate in “a fierce competition between advancing intelligence and an unworthy, shy ignorance that hinders our progress. ”

Janet Yellen, Joe Biden, Federal Reserve System, Donald Trump, Chairman of the United States Federal Reserve