Her Senate testimony did not inspire confidence.
Much has been written about Janet Yellen’s views on the proper tradeoff between unemployment and inflation, and about her economic forecasting powers. We know a lot less about her views on financial regulation, a third key responsibility of the Fed chairman.
There were plenty of reasons to oppose Larry Summers’s nomination to the Fed, which had seemed inevitable for much of the past few months, before Summers abruptly withdrew from consideration on Sunday. There’s Summers’s famously polarizing intellectual style, which made him a lousy fit for the consensus-driven (and hyper-transparent) Fed.
It has become glaringly obvious over the past couple months that President Obama wants to nominate Larry Summers to become the next chair of the Federal Reserve. According to CNBC’s John Harwood, Obama feels he “owes” Summers for his willingness to serve the country during the first-term response to the Great Recession.
There are now two, parallel debates taking place outside the White House over President Obama's choice of Fed chair Ben Bernanke's replacement.
If you're a liberal who follows politics closely but not that closely, then you probably know a lot about Elizabeth Warren but not much, if anything, about Peter Diamond. That's too bad. Like Warren, Diamond could end up with a pretty important position--one from which he could do a lot of good. But, like Warren, Diamond has provoked the ire of some conservatives who want to keep him from that post. Diamond is one of President Obama's three nominees to the Federal Reserve Board of Governors.
David Frum defends the Senate as representing the popular will: [M]any of the liberal blogs seem to take the view that once a president wins an election, his duty to persuade the country somehow adjourns for the next four years. That is not true, and it should not be true.
The big news from Martha's Vineyard is that Obama is appointing Ben Bernanke to a second term as Fed chairman. I've explained before why I think this is a good idea--Bernanke has been creative, even highly unorthodox, at precisely the moment when the economy demanded these qualities from the Fed, and when a conservative, by-the-book approach would have likely sent us into a depression.