Early in Janet Yellen’s leadership of the Federal Reserve, protesters began showing up outside Fed conferences to demand the central bank do more to help working Americans and minority groups.
The activists were there to criticize — but Yellen ended up winning them over, even to the point that they were vocal in supporting her for the second term at the Fed she was denied by President Donald Trump. Now she’s won the backing of progressive Democrats to become President-elect Joe Biden’s choice to serve as America’s first female Treasury secretary.
Yellen, 74, is set to take up the post at a turbulent time for the U.S. economy, with millions thrown out of their jobs by the pandemic, and low-earners, women and people of color among those taking the biggest hits even as stock markets have roared back.
Democrats on the party’s left, who could make trouble for Biden appointments, have been pushing back against some contenders seen as having too-close ties with the financial world. Yellen doesn’t fall into that category, judging by the rapid approval she got from one of the leading progressives on Monday.
“Janet Yellen would be an outstanding choice for Treasury Secretary,” Senator Elizabeth Warren said on Twitter Monday. “She is smart, tough, and principled. As one of the most successful Fed Chairs ever, she has stood up to Wall Street banks.”
Repairing a battered labor market, the principal challenge for Biden’s economic team, was also the main theme of Yellen’s term as Fed chair. In that period, a new policy idea was taking hold: keep interest rates low enough for long enough to let the engine of job-creation heat up.
Yellen gets credit for playing a key role in that historic shift. In an October 2016 speech, she said there were “plausible ways” running the economy hot could fix damage caused by the 2007-2009 recession. “Increased business sales would almost certainly raise the productive capacity of the economy by encouraging additional capital spending,” she said. “A tight labor market might draw in potential workers who would otherwise sit on the sidelines.”
The former Fed chief has also advocated for many of the causes favored by progressives. Yellen has spoken out about the need for tighter financial regulation. She’s backed investment to mitigate the impact of climate change, one of Biden’s main campaign platforms — though she’s criticized the Green New Deal proposed by left-wing Democrats like Senator Bernie Sanders as too expensive, and argued for taxes on carbon emissions as a more practical market-based approach.
As the first woman in charge of the Fed, she nudged the institution toward greater diversity in its own staffing — as well as in the range of people that central bankers talk to about the economy.
