If confirmed as treasury secretary, Yellen is expected to serve as a center-left economist who would favor additional stimulus to address the ongoing pandemic.
On Tuesday, November 24, President-elect Joe Biden unveiled the first of his cabinet picks in a press conference alongside Vice President-elect Kamala Harris. The revelation of Biden’s initial cabinet picks indicated his administration would rely heavily on established figures who have previous experience in Washington, DC.
A day before Biden officially announced the first round of cabinet picks, reports indicated the soon-to-be 46th president was selecting economist and former Federal Reserve chair Janet Yellen to be the next United States secretary of the treasury.
Though Yellen’s wasn’t among the first cabinet seats announced, her expected selection represents yet another example of Biden relying on figures from President Barack Obama’s time in office. Yellen’s career had previously included government positions, including in the administration of President Bill Clinton, but it was Obama who nominated her to be the first woman to chair the Federal Reserve.
Now, in a Biden administration, Yellen once again has the chance to break a glass ceiling, by becoming the first female treasury secretary.
The early years of Janet Yellen
Janet Louise Yellen was born in Brooklyn, New York in 1946 to Julius and Anne Yellen. Her father was a family physician and her mother was an elementary school teacher until she retired to raise her children.
Yellen was the valedictorian of her high school, Fort Hamilton High School, before she attended Brown University, an Ivy League school located in Providence, Rhode Island. She graduated summa cum laude with a degree in economics in 1967 after switching from her original major, philosophy. Four years later, she completed her Ph.D. in economics at Yale University.
In 1971, she continued her time in the Ivy League by becoming an assistant professor of economics at Harvard University. She taught at Harvard until 1976. The next year, she became an economist for the Federal Reserve Board of Governors (“the Fed”), which oversees the Federal Reserve Banks. That was followed by two years on the faculty of the London School of Economics and Political Science.
In 1980, Yellen joined the faculty of the University of California at Berkeley. There she would remain for 14 years, becoming the Eugene E. and Catherine M. Trefethen Professor of Business and Professor of Economics.
It was during her time at the Fed that she met her husband, the Nobel Prize winning economist George Akerlof. They met in the cafeteria in 1977 and were married a year later. They have one son together, Robert Akerlof, who teaches economics as well.
The Federal Reserve Board
In 1994, Yellen returned to the Federal Reserve Board, this time as a member (“governor”), when then-President Clinton nominated her to the role. Along with Alan Blinder, Yellen was the first Democratic nominee to the board since 1980, though at the time she described herself as a “non-ideological pragmatist.” Both Yellen and Blinder were confirmed and took two of the seven seats on the board.
The Federal Reserve Board sets monetary policy for the Reserve Banks and regulates some financial institutions within the country. The Federal Reserve is also charged with helping to ensure that the needs and desires of citizens are represented in the nation’s financial policies.
Yellen’s time as a board member ended in 1997 when Clinton appointed her to be the chair of the President’s Council of Economic Advisers. One of her most notable efforts on the council was the 1998 report on the gender wage gap that found, “On average, women earn about 75 percent of what men earn.”
After Clinton left office, Yellen took on a variety of other positions with other financial and educational institutions. From 2004 to 2010, she was the president and chief executive officer of the Federal Reserve Bank of San Francisco. She has also been the President of the Western Economic Association and a member of the American Academy of Arts and Sciences, among other positions.
Two years after the 2008 financial crisis caused the Great Recession, Yellen returned to the Federal Reserve Board when President Obama nominated her to be the vice chair.
Yellen’s appointment to the second highest position on the board was revealing because she was said to be an economic “dove,” focused more on lowering unemployment in the wake of the recession than worrying about inflation rates (generally the main concern for economic “hawks”).
In 2014, following the retirement of Chairman Ben Bernanke, Yellen was appointed as the new chair of the Federal Reserve Board, making her the first woman to hold the position. The White House said of Yellen at the time, “In government, Dr. Yellen has been known for her sound judgment and ability to build consensus.”
Yellen remained in the position through the end of Obama’s presidency and for the first year of President Donald Trump’s term in office. She offered her resignation in November 2017 and was succeeded by Jerome Powell. Powell was originally nominated to the board by Obama, while Trump elevated him to the chair.
Treasury Secretary Janet Yellen?
Biden’s likely nomination of Yellen as treasury secretary marks yet another first for an administration that has already made history by picking the first woman, Black person, and person of Asian descent for the role of vice president.
However, Yellen’s confirmation is not certain. The US Senate is in charge of reviewing and approving all cabinet positions. Historically, presidential cabinet picks have faced little resistance in the Senate, but that has changed in recent years. Obama was forced to withdraw three of his cabinet nominees and Trump withdrew two of his.
The ease with which Biden’s cabinet nominations will pass the Senate could depend on the results of the Georgia Senate runoff election on January 5. If one or both seats are won by the Republican candidate, the Senate will remain under the leadership of current Republican Majority Leader Mitch McConnell.
Whether McConnell would hold up the confirmation of Yellen is uncertain, though she has drawn the ire of Republicans in the past. In 2016, then-Representative Scott Garrett accused Yellen, in her role as the chair, of politicizing the Fed to help former Secretary of State Hillary Clinton win the election. Yellen denied the accusations.
If confirmed as treasury secretary, Yellen is expected to serve as a center-left economist who would favor additional stimulus to address the ongoing pandemic. She is also said to support public entitlement programs that help the elderly and disabled, while favoring increased tax revenue, including a carbon tax.
In 2018, she criticized tax cuts, like the one passed under the Trump administration, as well as “unfunded wars” for ballooning the federal deficit.
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