March 12, 2010

THE ECONOMIST VERSION OF THE WISE LATINA:

Obama Plans for Open Fed Seats Become Clearer (Damian Paletta, Sudeep Reddy and Jon Hilsenrath, 3/12/10, WSJ)

President Barack Obama plans to nominate Janet Yellen as vice chairman of the Federal Reserve Board, a person familiar with the matter said. The White House is also looking at Maryland's Commissioner of Financial Regulation Sarah Bloom Raskin and Massachusetts Institute of Technology Professor Peter Diamond for two other open seats. [...]

In addition to her experience in the government and with the Fed, Ms. Yellen could mark a reasonably safe pick for the White House, as 94 Senators voted to approve her during her first stint at the Fed. [...]

Obama administration officials have sought to fill the seats with a mix of skill sets for the three postings. They want a skilled economist—a role Ms. Yellen fills—but they also want a market specialist and governors with a hands-on view of regulation, particularly when it comes to consumer finance matters. One model is the late Fed governor Edward Gramlich, who expressed concerns early last decade about abuses in the subprime mortgage market. But finding a skilled economist with that mix of skills has been a challenge.

The Fed's vice chairman often plays a critical role in making sure the Fed runs smoothly. Mr. Kohn has been the point person on many of Mr. Bernanke's major initiatives, such as finding ways to make the Fed more transparent and drawing up lessons learned from the crisis. He also was the Federal Reserve Board's Washington ambassador with presidents of regional Fed banks, an important part of building consensus at Fed meetings.

Mr. Bernanke likely will want the new vice chairman to continue to play a key role in making sure the institution runs smoothly. Ms. Yellen ought to be adept at this—though she has differed with hawks at the Fed who worry about inflation, she's widely respected and has built relationships with other bank presidents having served at the San Francisco Fed for the past six years.


That Barack Obama is the dangdest sort of radical socialist we ever have seen.

Posted by Orrin Judd at March 12, 2010 2:06 PM
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