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Said to be the first woman to head the U.S. Treasury Department – former Fed Chief Janet Yellen even impressed Donald Trump with her expertise. In terms of economic policy, it follows a clear line.
By Arthur Landwehr, ARD-Studio Washington
“We have to spend more money!” Demands Janet Yellen, referring to the state. The 74-year-old economist is set to become Joe Biden’s Secretary of the Treasury. With the following sentence, in the summer of Corona with its collapsed economy, he also provides a reason that fits the economic and social concept of the future president: Because without additional government spending, “people who have become unemployed will not make it. “.
This prompted US economists to speculate whether the Biden administration will negotiate a new stimulus package with the newly elected Congress immediately after taking office. In any case, Wall Street is reacting to Biden’s selection for this publication with new all-time highs in the Dow Jones stock index.
“Wie Mary Poppins”
So who is this woman with the kind face and gray, medium-length, side-parted hair? “Someone who has broken one glass hood after another in his life,” writes the Washington Post. She is “like Mary Poppins: firm but personable, incredibly smart and always well prepared.” One of the world’s leading specialists in economics.
She would be the first woman to head a United States Department of the Treasury. Just as she was the only woman in her class to receive her Ph.D., she became the first economic adviser to a president and the first head of the Federal Reserve.
Yellen with a self-critical review
Christina Romer, an economics professor at the University of Berkeley, is excited. She organized the economic stimulus programs for Barack Obama herself during the great recession. When it got tough, he says, he always called Yellen. After all, Yellen, at the time at the Central Bank of California, had already warned in 2005 about the bubble in the housing market, which would eventually burst credit worldwide, crash banks and push states to the brink. of ruin. However, it did not assess the consequences as serious and therefore did not push for the policy to be changed, Yellen says self-criticizing in hindsight.
Janet Yellen’s path to politics led him through Bill Clinton, whose economic advisory group he led. There were jobs as a central banker in California. Barack Obama finally made her one of the most powerful women in the world in 2014: head of the Fed in Washington.
Low interest policy
There he played a special role in financial policy. The Republican majority in Congress denied President Obama the money he needed for sustainable economic stimulus packages, practically sabotaging his program to rebuild the economy. Yellen opposed this, helping the recovery with a specific low interest rate policy by the Fed to stimulate investment; the unemployment rate dropped dramatically during his tenure.
Trump traded them in as Fed chief
But there was only one term in office because new President Donald Trump no longer proposed it. “She is a great woman who did a great job,” he said when she said goodbye. He should have been impressed by her, but he was also upset. Trump accused her of actively supporting Hillary Clinton in the election campaign with her interest rate policy. He is also said to have repeatedly mocked employees for his small body size.
The advisers also advised Trump to pick a loyal, self-chosen cast. Yellen’s successor, Jerome Powell, turned out to be his own mastermind, who did not simply react to Trump’s demands. Now Trump would have another argument with Yellen, because she is pushing for another stimulus package that Trump and the Republicans have recently prevented.
Many economists consider that a trillion dollar package is necessary to get the US through the crown-related economic crisis and back on a sustainable growth path. They expect Yellen to tackle just that. In calm economic times, you are more likely to be seen as someone who pays attention to sound public finances and repeatedly warns against excessive public debt, even if you consider the debt to be generally acceptable. However, in his opinion, in a crisis, the state is tasked with using a lot of money to move the country forward for a long time.
Checks for Americans
Over the course of this year, the US has printed virtually $ 3 trillion, keeping businesses afloat, paying unemployment benefits and investing to get jobs. Most Americans even received a check for $ 1,200 in the president’s name. Yellen probably wouldn’t refuse to repeat that, even if the debt ratio in the US is now 100 percent of gross domestic product.
In the same way that Yellen thinks that the state should govern with its money. For example, he advocates for CO2 taxes to combat climate change. And he strongly believes that a cultural shift in economic policy can help combat inequality or racism.
