Thursday, October 10, 2013

Janet Yellen: Champion, Leader, and Dealmaker

It is official. Janet Yellen has been selected to manage the Federal Reserve. The advantage is that she is now serving as co-chair and therefore has the experience and knowledge to run the place. More importantly, she has paved the way for future generations as the first woman to hold her new title.

Maybe this should not be a pro-woman topic. Maybe her selection should not be about female representation in high ranking federal positions, but it really is. Her service will come at a time when the public in general has grown tired of misguided leadership from the old boys of the past. Of course, men are not to fault for the current status quo of politics because of their gender per se. Our economy is and has been at a standstill for sometime now, and that men have ruled politics and held leading positions does not directly have anything to do with the ongoing slump.

The truth is that our economy is bleeding. Our nation is at a pivotal historical moment right now. Since the 9/11 attacks, we have been struggling for normalcy, for the former prosperous days when people were realizing real wealth, when we were able to spend more and worry less. Something went terribly wrong since that day the towers were attacked. They did not only reveal how vulnerable we were to outsiders, but also to our leaders and corporations. From that point, we saw a steady decay in the way we did politics and business. We found ourselves exposed, even naked, to terrorism from the outside and corruption from within our own borders. All these changes have also affected the economy. It along with the people have been waiting for salvation. 

Whether or not Yellen is the savior remains to be seen, but she's starting on a positive note. She appears to be well-respected. No one has publicly criticized her. They are skeptical of her policies, mainly because it mirrors Bernanke's. It has a lot to do with their approach to addressing inflation. Like Bernanke, she has supported the purchase of billions of dollars of bonds to control market forces. Unless someone offers a better solution, bond buying it is. Other than that, much of the feedback has been positive. A recent Wall Street Journal survey showed that many economists were optimistic about her ability to lead the Reserve. Although most believed she would follow Bernanke's policy style, 60 percent were confident in her abilities. But let's ignore her leadership for now.

There is something else at play here. First, her nomination has made her a global role model and mentor by default to the scores of women following the news. Whether she likes it or not, Ms. Yellen has something to prove now. This opportunity will trump any policy she implements. She will be remembered as "the first" by the global community, whether or not anyone believes she really accomplished anything with respect to fiscal policy. Think Hillary Clinton, Margaret Thatcher, women who were harshly criticized and at times despised while in office, were respected as champions for women empowerment on their way out. Janet Yellen will soon be among this grand category.

Second, she is well regarded. Sure, she has been scrutinized, but not because she is a women or potentially incompetent. Much of the skepticism is geared at whether she is able to undo, oh, about a decade's worth of damage to the economy by her predecessors. So far, neither her personality or her qualifications have been attacked. With a little strategy, she can use her experience and reputation to create a cohesive, amicable ambiance at the Fed. Maybe then will those old boys finally get the job done. Skeptics beware: never underestimate the power of comradeship. 

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