The Truth About Janet Yellen

She made history as the first woman to head the Federal Reserve. Now Janet Yellen is set to make history again as she is poised to become the country's first female Treasury Secretary — a position which was first created in 1789 by Alexander Hamilton (via Treasury Department). If her nomination is confirmed, Yellen would be one of the few people to have worked in the White House (she was head of the White House Council of Economic Advisers during the Clinton Administration), the Federal Reserve, and now a presidential cabinet (via The New York Times).

Janet Yellen has impressive credentials. She was born in Brooklyn, New York; her father was a doctor, and her mother, a teacher who then stayed home to raise both her and her brother. Yellen graduated from high school as valedictorian and editor of her school paper and went on to graduate summa cum laude from Brown University, before she received her doctorate from Yale. Before she entered government, she was in academia, having worked as a professor at some of the world's top institutions, including Harvard, The London School of Economics, and the University of California at Berkeley. In 2004, she became the president and CEO of the Federal Reserve Bank of San Francisco (via Investopedia); she has also been credited for foreseeing the real estate bubble that lead to the 2007 financial crisis, although she didn't publicly speak about it (via Reuters).

Janet Yellen is married to George A. Akerlof, whom she met when she was working at the Federal Reserve in 1977 and married six months later. But Akerlof, who bears more than a passing resemblance to Bill Gates is no "Mr Yellen." Friends say they have an equal partnership, and it was Yellen's support that distinguished Akerlof's academic work, which eventually led him to a Nobel Prize for Economics in 2001, a distinction he shares with economists Joseph Stiglitz and A. Michael Spence. (via Time)

In an autobiographical note on The Nobel Prize site, Akerlof highlights the importance of enjoying an equal partnership, saying: "When Janet later became Chair of the Council of Economic Advisers in 1997, Berkeley gave me full-time leave. When Janet was at the Fed, I supported her as much as possible by taking over household duties; later when she was at the White House, my role in providing psychological support in the daily political storms was yet more important."

Yellen and Ackerlof are aligned perfectly ... well, almost. Ackerlof has said "Not only did [Yellen's and my] personalities mesh perfectly, but we have also always been in all but perfect agreement about macroeconomics. Our lone disagreement is that she is a bit more supportive of free trade than I."

Of her husband, Yellen has said: ""It's wonderful to work with him. He's so original." 

If her nomination is confirmed, Janet Yellen will be taking the helm of an economy that has been battered by the coronavirus pandemic. Millions of people are still out of work and job growth is slowing. Economists are already predicting a slight economic slowdown during the first quarter of 2021 because of COVID-19 (via The Wall Street Journal).

But she maybe uniquely qualified for the position because she has spent her professional life studying the labor market and has an interest in the Great Depression. As The New York Times put it, Yellen has placed emphasis on the economic fallout that is triggered as a result of unemployment and a belief in the Federal Reserve's ability to stimulate job growth. Yellen is also a believer that a little inflation — or a spike in the cost of basic goods — can be tolerated if that is the price for boosting job numbers.

Janet Yellen is a believer in practicing what she preaches, too. When she and husband decided to hire a baby sitter, they decided to give more than the going rate, because they thought that a happy sitter would provide better care. They got what they wanted.