Obama has officially nominated Janet Yellen to be the next chair of the Federal Reserve. It was widely expected after Lawrence Summers had withdrawn his name from consideration. It is highly likely she will be confirmed by the Senate. Of course, Obama and much of the media are fixated on the fact that she will be the first woman to head up the Fed.
At the official announcement, Yellen spoke and said, "Too many Americans still can't find a job and worry how they'll pay their bills and provide for their families. The Federal Reserve can help if it does its job effectively."
Yellen is really the perfect Obama nominee. The two share the same philosophy. They believe that central planners best know how to run other people's lives. They believe that they and their friends are the best ones to rule. They believe that people should not be left free to make their own decisions in life.
So Yellen thinks that the Fed can help families find a job and pay their bills. This is the arrogance that comes from these elitists. Just like Obama, I'm not sure if she is an outright liar or if she is so full of herself that she can't see her own stupidity. If the Fed stopped creating bubbles, handing bailouts to Wall Street, and misallocating resources on a grand scale, then maybe families would find it easier to find a job and pay their bills. But Yellen and company think they know best.
After the rumor broke about Yellen on Tuesday night, stock futures went up a bit on the news. It didn't last too long though and stocks ended Wednesday on a mixed note for the day.
Can it really get any worse? Bernanke has overseen a Fed that has more than quadrupled the monetary base in the last 5 years and is currently creating about $85 billion per month out of thin air. Of course, just when I think a president can't get any worse, another president comes along to try to prove me wrong. I suppose that might happen with the new Fed chair.
I am not sure that the particular individual who heads the Fed is really all that significant. I suppose it is more symbolic than anything. Just like the president, it is a position that is as much a figurehead than anything. The particular individual in charge, whether we are talking about the president or the Fed chair, will not go against the establishment in any significant way.
I am still not sure what happened with Paul Volcker as Fed chair in the late 1970s and early 1980s. He did what needed to be done to save the dollar and essentially save the American economy. He stopped the monetary inflation, allowed a much needed recession (or recessions), and let the malinvestment flush itself out. I don't know if Volcker was really smart and made this decision on his own. I am more inclined to believe that he and others received pressure from foreigners, warning that they would dump the U.S. dollar if the monetary inflation did not stop. Regardless of the story behind it, the Volcker Fed did the right thing at that time.
My only hope is that when things get really bad in the economy this time around, Yellen will still be considered in charge. Perhaps we should be scared of her policies, but at least her Keynesian/ big government philosophy can take the blame for it.
For the few articles I read about Yellen's nomination, I glanced at the comments below each story. These were not stories from libertarian blogs or anything like that. Yet, most of the comments were bashing Yellen and Obama and criticizing her eagerness to print more money.
So while the nomination of Yellen is bad news, even though expected, we should not despair. There is a greater focus on the Fed now than ever before and more and more people every day are figuring out that they are getting ripped off by the Fed and its disastrous policies.