Why Janet Yellen, Not Larry Summers, Should Lead the Fed - By JOSEPH E. STIGLITZ

[kpete]

Why Janet Yellen, Not Larry Summers, Should Lead the Fed
By JOSEPH E. STIGLITZ


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Whoever succeeds Ben S. Bernanke as the Fed’s leader will have to make repeated judgment calls about when to raise or lower interest rates, the levers of monetary policy.

Two elements enter into these judgments. The first is forecasting. Wrong forecasts lead to wrong policies. Without a good sense of direction of where the economy is going, one can’t take appropriate policies. Ms. Yellen has a superb record in forecasting where the economy is going — the best, according to The Wall Street Journal, of anyone at the Fed. As I noted earlier, Mr. Summers’s leaves something to be desired.

Ms. Yellen’s superlative performance should not come as a surprise. Janet Yellen, whom I taught at Yale, was one of the best students I have had, in 47 seven years of teaching at Columbia, Princeton, Stanford, Yale, M.I.T. and Oxford. She is an economist of great intellect, with a strong ability to forge consensus, and she has proved her mettle as chairwoman of the President’s Council of Economic Advisers (she succeeded me in that role), as president of the Federal Reserve Bank of San Francisco, from 2004 to 2010, and in her current role, as the Fed’s No. 2.

Ms. Yellen brings to bear an understanding not just of financial markets and monetary policy, but also of labor markets — which is essential at a time when unemployment and wage stagnation are primary concerns…

Though the willingness to take actions to prevent crises, and good judgments in a crisis, are undoubtedly critical in the choice of the next Fed chair, there are other important considerations. The Fed is a large organization that has to be managed — and Ms. Yellen demonstrated her management skills at the San Francisco Fed. One has to obtain consensus among a diverse group of strong-minded individuals, some more worried about inflation, some more worried about unemployment. One needs someone who knows how to build consensus, not someone who excels in bullying, who knows how to listen to and respect the views of others. When I was chairman of Economic Policy Committee of the Organization for Economic Cooperation and Development, I saw how effectively Ms. Yellen represented the United States, and the respect in which she was held. In the ensuing years, she has gained in stature, and today has the enormous respect of central bank governors around the world. She has the stature, wisdom and gravitas one should expect of the leader of the Fed….


the rest:
http://opinionator.blogs.nytimes.com/2013/09/06/why-janet-yellen-not-larry-summers-should-lead-the-fed/?_r=0

[Guy Whitey Corngood]

1. K&R nt

[rilkehayden]

2. We the People petition for Janet Yellen

I'm so glad Stiglitz wrote that article. It's such a well-written statement of the Yellen case.

There's some hope. This WSJ article here notes that 3 of the 12 Democrats on the Senate banking committee (of 22 members total) have committed to vote against Summers if he's nominated, which means Obama would need some Republican support for Summers on the committee, which he might not get.

There's a We the People petition on the White House website going in support of Yellen here for those who are interested in taking action on the issue. Two previous petitions on the issue expired, unfortunately. Feel free to sign and share it everywhere.