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Stiglitz and Over 350 Economists Write to Obama Backing Janet Yellen for Fed Chair Over Larry Summers

The country's top economic thinkers urge the President to appoint the best woman for the job.
 
 
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Editor's Note: As chatter about Obama's preference for Larry Summers as the next Fed chair heats up, more concerned Americans are weighing in to tell the President that this would be a huge mistake. Summers has multiple conflicts of interest, serves Wall Street over Main Street, favors austerity over jobs when he's in power, he's a sexist—and that's just the beginning of the list. Obama's apparent choice is all the more disappointing when there is a highly qualified woman, Janet Yellen, available to take the job. Summers' confirmation would likely cause a ruckus in the Senate, triggering bitter battles that would distract the country from other vital issues.

Nobel Prize-winning economist Joseph Stigltiz, along with letter-organizer Heidi Hartmann, president of the Institute for Women’s Policy Research and hundreds of top economic thinkers, explain why Janet Yellen is the best person to take the helm at the Federal Reserve. The full text of the letter is below. Click here to view full list of signatures, which include Alan Blinder, a former economic adviser to President Clinton and former Fed vice chair himself and Christina Romer, the former head of Obama's Council of Economic Advisers.

Dear President Obama:

We the undersigned economists, with both academic and practitioner interests in public policy, respectfully urge you to appoint Janet Yellen as the next Chair of the Board of Governors of the Federal Reserve System.

While there are many reasons to select Janet Yellen for this position, we would like to emphasize three of them.

Dr. Yellen is superbly qualified.  She has shown consistently good judgment in all her roles leading our nation’s financial institutions and economic policy, first as a member of the Board of Governors of the Federal Reserve System (FRB), then as Chair of the Council of Economic Advisers under President Clinton, President of the Federal Reserve Bank of San Francisco, and now as Vice Chair of the FRB.  While leading the San Francisco Federal Reserve Bank in 2005, she warned of an impending real estate meltdown as asset prices rose unrealistically. Dr. Yellen was one of the first members of the Federal Open Market Committee to realize that the financial sector’s difficulties in 2007 could cause a major recession, and she worked to focus her colleagues on the problems of the housing sector.  Her knowledge of how the Fed sets policy, her understanding of the relationship between monetary policy and economic growth, and her ability to see and propose solutions to emerging economic problems is second to none.

Dr. Yellen is willing to hear multiple points of view and to bring many voices into the policymaking arena.  She is not beholden to a single interest group, nor to a single industry. There is less and less room in modern public policymaking, especially at the FRB, for a single leader to dominate discussion.  Modern policymaking, in a world filled with uncertainties and complexities, must proceed through cooperation and consensus, led by effective leaders.  Dr. Yellen has demonstrated the ability to hear all points of view and then act effectively at the FRB.

In her public speeches and scholarly writings, Dr. Yellen demonstrates a clear and nuanced understanding of labor markets, including why they do not always generate enough jobs. As our weak recovery enters into its fifth year of slow economic growth, a continued commitment to expanding jobs through appropriate policy is a must for the next FRB Chair. Dr. Yellen has demonstrated this commitment and understanding in her recent public speeches and actions at the FRB.

In conclusion, we believe that Janet Yellen is an extremely effective leader who has demonstrated her capacity to work with the other FRB governors and to bring important perspectives of the American people to her leadership and decisions.  In our opinion, she is the best possible leader for the Federal Reserve Board at this critical time in our nation’s history.