Janet Yellen: Obama's Second Choice Hands Him a First-Rate Political Win
Yellen will be the first female chairman of the Federal Reserve, and her appointment is a landmark moment in the history of the Fed and theUnited States. Coming as it does now – in a time of Congressional petulance, government shutdown and negotiating impasse – Yellen's nomination today will show that Congress can agree on at least one thing.
Remarkably, Yellen is a lock. After years of grinding hearings for major positions, her confirmation is likely to be the easiest of Obama's nominees. Brian Gardner, SVP of Washington research at the investment bank KBW, crunched the numbers and expects Yellen to be "easily confirmed". Not only that, but Yellen is likely to face an even easier confirmation process than her boss, Ben Bernanke, did in 2010.
"We expect the vote on Yellen will lack the drama that preceded the 2010 vote on Bernanke when there was some thought that he might lose (the vote against him was the highest number of 'no' votes against a Fed chairman in history)," Gardner wrote.
Senate Democrats have already written a love letter to Yellen and sworn their fealty to her tenure. Over 300 of her fellow economists support her. Some Republican may oppose her, but not enough will bother.
The only thing standing in the way of Yellen's confirmation is the shutdown. As Garder predicted, "we expect the Senate Banking Committee will have a confirmation hearing on Dr Yellen by Thanksgiving and the Senate should be able to vote on her nomination by year-end. There is a small chance, in our view, that the vote could drift into January 2014."
Easy peasy lemon squeezy, as the political film In The Loop might characterize it.
In other words, Yellen is a godsend to Obama. His administration has logged almost no major wins on any legislative matters since the Dodd-Frank financial reform act passed in 2009. Gun control failed. Immigration reform failed. The farm bill and food stamp funding have been disastrous. The budget situation, which has dragged the country through three annual threats of default, is unspeakable. Economic stimulus has not even gotten off the ground.
The Affordable Care Act, once considered a win, now has a permanent asterisk next to it; it was challenged in the supreme court and is the legislation that Republicans have put at the root of the current government shutdown. Even if the ACA is popular – and all indications are that it will be – it is not a clear political win.
Yellen's nomination is, however, a slam dunk for Obama. It's historic, it's timely, and it's politically easy.
What makes this especially remarkable is that the president stubbornly fought the idea of nominating Yellen. His team, often speaking to the Washington Post's WonkBlog and others, were fully in support of Larry Summers far past the point at which it was practical.
When Summers was defeated in the race, the reaction from his supporters was not that the better woman with more support had won, but that Summers had been left out to dry by an administration who couldn't face opposition.
Some of Summers' supporters even told CNBC's Andrew Ross Sorkinthat they believed, incredibly, that he only lost out because they didn't launch a more aggressively negative smear campaign against Yellen.
There's a snarky saying about America that it's a country that does the right thing … eventually. The same could be said of the Obama administration's method of choosing Federal Reserve chairman. Yellen will forever be remembered as not Obama's first choice. To many other people, however, she is easily the best choice.