Janet Yellen Confirmed as Next United States Treasury Secretary

Business

Elizabeth McLaughlin, Staff

The Washington Post

Janet Yellen, pictured above, was recently confirmed by the Senate in a bipartisan, 84-15 vote, making her the 78th Secretary of the US Treasury and first woman to hold the position.

She got her undergraduate degree in Economics from Brown University and then a PhD in the same field from Yale. From there, she taught economics as a professor at Harvard. After that, she researched international monetary policy as an economist with the Federal Reserve’s Board of Governors. She taught at London School of Economics and University of California, Berkeley. She was confirmed unanimously by the Senate to chair the Council of Economic Advisers under Bill Clinton. Then, she became the president and CEO of the Federal Reserve Bank of San Francisco, as well as a voting member of the Federal Open Market Committee. From there, she graduated to the vice chair of the Federal Reserve Board of Governors and eventually the chair of the Federal Reserve — the first female to hold that position. As if that weren’t enough, she became a distinguished fellow in residence at the Brookings Institution. She holds nine honorary degrees ranging from a doctorate in science to a doctorate in philosophy. Her name is Janet Yellen, and her most recent accomplishment to be added to an already long list is being confirmed as the newest secretary of the United States Department of the Treasury.

Janet Yellen is the first female treasury secretary and the first person ever to lead the three most powerful economic bodies in the United States government: the Treasury Department, the Federal Reserve, and the White House Council of Economic Advisers. She was confirmed by the Senate on Jan. 25 in a bipartisan vote of  84-15. In her role as Fed chair, Yellen was well-liked by both Democrats and Republicans. Her ability to appeal to both sides of the aisle will likely bode well for the Biden administration, which begins amidst unprecedented partisan tension.

Yellen is a Keynesian economist and considered by many to be a dove, which is another way of saying she is generally more concerned with unemployment than with inflation. She received criticism for keeping interest rates too low for too long in her capacity as chair of the Federal Reserve. Some of her opponents admit that she can act more as a hawk by hiking interest rates if necessary.

As Yellen steps into her role as treasury secretary, she inherits a hefty to-do list: propose and pass another fiscal stimulus bill, advise President Biden on carbon tax policy, maintain the dollar as the world’s international reserve currency, provide insight on long-term economic recovery post-Covid-19…the list goes on. Some of these issues may appear more immediately pressing than others — Americans have been waiting months for much-needed and adequate stimulus. Regardless, Yellen will play a key role in bolstering a floundering economy.

On Jan. 20, Yellen appeared before the United States Senate Committee on Finance to persuade lawmakers to pass President Biden’s $1.9-trillion Covid-19 relief plan. The plan includes increasing the minimum wage and expanding family and medical leave — two policies that do not have strong Republican support. Yellen believes that “we have a long way to go before our economy recovers,” so Congress must “act big” to support millions of struggling American families.

Another item on Yellen’s agenda is climate action. For years, Yellen has opined that climate change poses a risk to global financial stability indicating that she will “act big” on climate action in her role as treasury secretary. Her support for a carbon tax goes all the way back to her time as chair of the White House Council of Economic Advisers under President Bill Clinton. In addition, she co-founded a nonpartisan, international think tank called the Climate Leadership Council (CLC), which advocates for a carbon tax of around $40 a ton and increases 5 percent each year. In turn, this tax would filter back into American pockets in order to offset the costs of increased energy prices. Moreover, the CLC advocates for penalties on carbon-intensive products in the form of border-adjustable taxes on imports. The plan has drawn some criticism from progressive climate activists and groups and, perhaps deservingly so; ExxonMobil and Shell were quick to sign on as “founding corporate members” of the plan. Beyond that, Yellen plans on pushing for emissions reductions. She does not believe that a carbon tax alone is enough to address climate change and ensure global financial stability. In her capacity as treasury secretary, Yellen could establish a national green bank to encourage investment in sustainable infrastructure. She could also pressure international financial institutions to divest from fossil fuels.

Yellen’s bipartisan confirmation by the Senate represents a marked shift in the political and economic cultures we have grown accustomed to for the past four years. An exceptionally qualified expert with a robust resume has been appointed to a cabinet-level position with support from both parties. Her appointment is uncontroversial, expected, and comforting; three adjectives we could all use a little more of these days. The only thing lengthier than her impressive curriculum vitae? Her to-do list.

mclaughline7@lasalle.edu

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