President-elect Joseph R. Biden has already begun the process of assembling his cabinet, making several high profile appointments that have yet to be confirmed by the Senate. Perhaps one of the most important appointments Biden has made thus far, especially during a time of great economic crisis, is nominating Janet Yellen as Secretary of the Treasury. Yellen’s nomination comes at an important time. With a virus already claiming more than 250,000 American lives, causing thousands of business closures, and leaving millions unemployed, the nation needs a Treasury Secretary able to negotiate with Congress (and what is likely to be a Republican Senate) over fiscal spending packages and relief to recover from the pandemic.
Who is Janet Yellen?
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Born in Bay Ridge, Brooklyn to an upper middle class family, Yellen went on to graduate from Brown University summa cum laude with a degree in economics. She later completed her PhD in economics from Yale University. She assumed many key economic policy positions throughout her career in addition to teaching at the Berkeley Haas School of Business and U.C. Berkeley Department of Economics from 1980-2006. In the 1990s, she joined President Bill Clinton’s Council of Economic Advisors, taking on a chief advisory role. In the 2000s, she landed a role as president and chief executive officer of the Federal Reserve Bank in San Francisco, where she was in charge of keeping tabs on the entire West Coast economy. She earned recognition for being one of the early predictors of the financial bubble occurring in the housing market. In 2013, President Barack Obama nominated Yellen as the first woman to become Fed Chair, making her a key architect of the economic recovery following the 2007-2008 recession. Yellen’s time as Fed Chair led to economic healing: the unemployment rate fell from 6.7 percent at the start of her term to 4.1 percent by the end. As Fed Chair, Yellen was also the first to argue that widening inequality was not a political issue, but an economic one that needed to be addressed by Congress for the future of the economy.
What could Janet Yellen’s appointment mean for the future of the American economy?
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Janet Yellen’s extensive experience navigating economic policy, especially through the last major financial crisis, and her deep relations on Capitol Hill, are both seen as essential reasons Biden ultimately chose her for the important cabinet role. While we do not know what specific policy actions she will take at this time, Yellen has been a clear advocate for a more aggressive government response to the crisis, urging for the passage of more relief. Another quality of Yellen’s is her diplomatic skill and ability to work across the aisle and broker a deal; she may be able to unify Republicans and Democrats who remain deeply divided on how best to build back the economy. Yellen has also shown commitment to tackling difficult problems like inequality, racism, climate change, and financial regulation in the past and is assumed to continue pushing for concrete changes in these areas as well.
article by Madeline Lorie ‘23
design by Carolyn Lu ‘24