Roll Call: Latest News on Capitol Hill, Congress, Politics and Elections
October 23, 2014

What is Janet Yellen’s Agenda?

Michael Hirsh: “Every Federal Reserve Board chairman comes into office with a secret agenda, a hidden passion. It’s the sort of thing you don’t hear about at the confirmation hearings, and yet it is often this grand passion—suddenly given voice in the world’s bulliest economic pulpit—that shapes the nation’s future in unexpected ways. Alan Greenspan, the erstwhile ‘maestro’ of the Fed, wanted to turn finance into the kind of laissez-faire market that his mentor Ayn Rand, the uber-libertarian author, had always envisioned. The result was the across-the-board deregulation of banking. When Ben Bernanke took over Greenspan’s job, he appeared to be just another conservative economist in the mold of his predecessor (who had endorsed him). But his great passion was applying his life’s work as a scholar of the Great Depression to stop another one. Only people who really knew Bernanke were aware of how the balding, mild-mannered man with the slightly quavery voice was committed, body and soul, to ensuring that the 2010s did not turn out like the 1930s. Thus, the startling spectacle of a Republican-appointed activist chief exploding the Fed’s balance sheet by trillions of dollars to keep the economy going.”

“What is Janet Yellen’s secret passion? By the accounts of her friends and colleagues, the 67-year-old Yale-trained economist doesn’t have many secrets… But that is the public Janet Yellen. Disciplined, determined, and brilliant, Yellen is also the product of an old progressive tradition of activist, pro-government economics. Above all, according to colleagues, she takes the nation’s worst problems, especially unemployment, as a deeply personal challenge. Yellen, who is all but certain to be confirmed, represents a strain of interventionist thinking that has not found expression at such a high level in Washington in decades—at least since Ronald Reagan and his Milton Friedman-inspired attempt to shrink the size of government.”

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