U.S. President-elect Joe Biden on Monday chosen former Federal Reserve Chair Janet Yellen as treasury secretary, a historic decision that could make her the first woman to lead the department. If confirmed by the Senate, Yellen would be the first woman to serve as U.S. treasury secretary in the department’s 231 years of history. She would also be the first person to have served as treasury secretary, chair of the Council of Economic Advisers, and chair of the Federal Reserve. Yellen, 74, is widely seen as a politically “safe” pick for the role, likely to garner support from Senate Republicans as someone capable of pursing bipartisan compromise during an otherwise fragile time for the economy. A graduate of Brown and Yale universities, the pioneering Jewish economist was also the first woman to serve as Fed chair after her Senate confirmation in 2014. Her four-year tenure at the helm of the Fed, marked by an improving jobs market and historically low interest rates, may also boost her odds for confirmation. U.S. President Donald Trump in 2017 chose to replace Yellen with current Fed Chairman Jerome Powell at the expiration of her first term at the central bank. Democrats may welcome Yellen as Biden’s Treasury pick thanks in part to her commitment on how economic policymakers could address climate change. She has in recent years voiced support for a carbon dioxide emissions tax. Yellen is currently an economist at the Brookings Institute. Before becoming Fed chair, Yellen was at the helm of the San Francisco Federal Reserve Bank and was the 18th chair of the Council of Economic Advisers under the Clinton administration. She will face a litany of unprecedented economic hurdles. The treasury secretary is the foremost navigator of the U.S. economy, managing the public debt and the execution of foreign penalties, monitoring the collection of taxes, and serving as the chief liaison between the administration and the financial markets and businesses large and small. But the current precarious state of the U.S. economy, coupled with the president-elect’s lofty taxation and equitability goals, will place an even greater spotlight on the Treasury Department and its leader. The Trump administration appears set to leave behind a fragile U.S. economy after the coronavirus and efforts to slow its spread caused a sharp, but brief recession in business activity earlier in 2020. Most economists, including current Fed chief Powell, say Congress’ early support and the US$2 trillion CARES Act helped soften the springtime recession and reignite the economy throughout the summer. U.S. gross domestic product fell 31.4 percent on an annualized basis in the second quarter of 2020. The government reported that output grew 33.1 percent in the third quarter. With daily COVID infections returning to records in the U.S., more and more forecasters are warning that GDP growth could decelerate in the fourth quarter and even turn negative in the first three months of 2021. Steven Mnuchin, Trump’s treasury secretary, has for months struggled to broker another stimulus bill agreeable to House Democrats and Senate Republicans. Biden has backed Democrats’ push for a bill that costs at least US$2.2 trillion. Though Yellen would no longer play a part in the direction of the nation’s monetary policy, a glance at her time at the Fed may suggest a cautious Treasury under her direction. As head of the Federal Reserve from 2014 to 2018, Yellen and other central bank officials raised the benchmark federal funds rate just five times over four years. By the time of her exit, the Fed had only just begun to shrink its massive US$4 trillion portfolio of bonds purchased during the Great Recession to stimulate the economy. Policymakers including Yellen had been eager to avoid a repeat of the so-called taper tantrum, the market volatility sparked by then-Fed Chairman Ben Bernanke’s remarks in May 2013 suggesting that the Fed could halt its asset purchases. That turbulence appeared to color Yellen’s time at the Fed and is likely responsible for the gradual increase in the federal funds rate under her watch, which critics incorrectly argued would hamstring the recovery. She was praised for achieving “near perfection” during her tenure, steering the central bank with steadfast pragmatism in a slow series of interest rate increases. Yellen’s track record as Federal Reserve chair speaks for itself. During her term of office, the unemployment rate fell from 6.7 percent in February 2014 to 4.1 percent in January 2018, inflation stayed low, and the economy built up a head of steam. Her policies are credited with helping to drive unemployment to its lowest level in 50 years before the coronavirus hit. The Dow Jones Industrial Average set more than 150 record highs during her tenure. Inflation remained modest, as the core inflation rate hovered near the Fed’s 2 percent target. Yellen began her career in academia before joining the board of governors of the Federal Reserve, the central bank that controls monetary policy, in 1994. She worked for President Bill Clinton as a member of the Council of Economic Advisers in the late 1990s. Then in 2004, the Bay Area resident — her Jewish husband and fellow economist George Akerlof taught at the University of California, Berkeley — became president of the Fed’s San Francisco branch. President Barack Obama appointed her as vice chair of the Federal Reserve in 2010, before elevating her to chair in 2013, replacing fellow Jewish economist Ben Bernanke. Her career has earned praise from all sides — for example, even though Trump declined to give her another term as Federal Reserve chief in 2017 (he told The Washington Post that he was partly “hung up” on the fact that she is only 5 feet [1.52 meters] tall), he called her a “wonderful woman who’s done a terrific job.” Elizabeth Warren, the progressive senator who wants more regulation of the economy, praised her at the time as well. That’s likely because inflation and unemployment declined during her tenure. She also spoke out early about the danger of subprime mortgages, which helped lead to the 2008 financial collapse. She’s a Keynesian — meaning she believes in taking proactive government action to combat market volatility — and is called a “dove,” which in economic terms means she is more concerned with unemployment than inflation and is less likely to hike interest rates. Yellen was born in 1946 to a Polish family in Brooklyn Borough, New York City. She is an Ivy League graduate, who graduated summa cum laude from Brown University with a degree in economics in 1967 and then went on to receive her Ph.D. in economics from Yale University in 1971. She is married to professor and economist George Akerlof, a Nobel Memorial Prize in Economic Sciences laureate. Yellen has served as an assistant professor at Harvard, a lecturer at the London School of Economics, an economist with the Federal Reserve Board of Governors, and taught and conducted research at the Haas School. Twice, she has been awarded the Haas School’s outstanding teacher award. In May 2015, Yellen received an honorary doctorate from the London School of Economics. This achievement made her and her husband “the first wife and husband team to hold honorary doctorates from the school.” In 2012, she was included in the Bloomberg Markets magazine list of “50 Most Influential.” Moreover, in 2014, Yellen was named by Forbes as the second most powerful woman in the world, the first being Angela Merkel, the German chancellor. This made her the highest-ranking American on the list. The Sovereign Wealth Fund Institute in 2015 ranked Yellen as number one in the Public Investor 100 list. In the same year, she was ranked first in Bloomberg Markets annual list of the 50 most influential economists and policymakers. In 1997, she received the Wilbur Cross Medal from Yale and then an honorary Radcliffe Medal in 2016. Yellen has been out front on the climate change policy, saying that the U.S. should implement a carbon tax to curb harmful emissions. “What I see is a growing recognition on both sides of the aisle that climate change is a very serious concern and that action needs to occur,” she told Reuters in October.(SD-Agencies) | 