Meet the most powerful woman in banking

Yellen is a distinguished academic, especially known for her work on unemployment. She has even written about out-of-wedlock child-rearing, gang behaviour and the brain drain; she cares about the real world and her work involves careful analysis of behavi

The nomination of Janet Yellen to be the next chair of the US Federal Reserve is an excellent one, especially with all the uncertainty over the US government shutdown and fears over breaching the debt ceiling. The US economy needs continuity in its monetary policy and Yellen, whom I supported for the job, guarantees a seamless transition from Ben Bernanke. Best of all, it’s one for the doves. She will have no trouble at all being confirmed by the US Senate, even though folks such as Rand Paul will vote against her because they don’t believe there should be a central bank. She needs only 60 out of 100 votes to be confirmed, and will be.

The appointment of Professor Yellen has been welcomed by economists no matter what their economic persuasion, Keynesian or monetarist, saltwater (Harvard) or freshwater (Chicago). There have been few if any dissenting voices. Her CV is second to none. She is definitely the number-one central banker in the world; Mark Carney was just the best central banker available in the banker draft when George Osborne chose him to lead the Bank of England.

Yellen, who is only five feet tall, obtained her PhD from Yale, where she was supervised by the Nobel economics laureate James Tobin. She taught at Harvard and the LSE before moving to the University of California, Berkeley. She first worked at “the Fed” as an economist in the 1970s and then returned as a governor from 1994-1997, when I met her as a feisty but “small lady with a large IQ”, as the New York Times has said. She was chair of Bill Clinton’s council of economic advisers from 1997-1999.

From 2004-2011 Yellen was the president and chief executive of the Federal Reserve Bank of San Francisco and, as the 12 bank presidents do, attended Fed rate-setting meetings. In 2010 she returned to the Fed as a governor and vice-chair. She is married to the Nobel economics laureate George Akerlof; they have a son who is an economist at the University of Warwick.

Yellen is a distinguished academic, especially known for her work on unemployment. She has even written about out-of-wedlock child-rearing, gang behaviour and the brain drain; she cares about the real world and her work involves careful analysis of behaviour.

The new Fed chief is especially concerned about long-duration unemployment and its consequences. Her view is that, for now, inflation can go on the back burner –which is music to my ears, given my recent work showing that a 1 percentage point increase in unemployment lowers well-being by over four times as much as an equivalent increase in inflation.

Yellen has been influential in developing the forward guidance on interest rates that the Bank of England has copied. There will be no rate rises any time soon on her watch unless something dramatic and good happens. I couldn’t ask for better than that.

Pint-sized engagement, going all the way to the top: Janet Yellen, the world's top central banker. Image: Getty

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

This article first appeared in the 17 October 2013 issue of the New Statesman, The Austerity Pope

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Commons Confidential: Dave's picnic with Dacre

Revenge is a dish best served cold from a wicker hamper.

Sulking David Cameron can’t forgive the Daily Mail editor, Paul Dacre, for his role in his downfall. The unrelenting hostility of the self-appointed voice of Middle England to the Remain cause felt pivotal to the defeat. So, what a glorious coincidence it was that they found themselves picnicking a couple of motors apart before England beat Scotland at Twickenham. My snout recalled Cameron studiously peering in the opposite direction. On Dacre’s face was the smile of an assassin. Revenge is a dish best served cold from a wicker hamper.

The good news is that since Jeremy Corbyn let Theresa May off the Budget hook at Prime Minister’s Questions, most of his MPs no longer hate him. The bad news is that many now openly express their pity. It is whispered that Corbyn’s office made it clear that he didn’t wish to sit next to Tony Blair at the unveiling of the Iraq and Afghanistan war memorial in London. His desire for distance was probably reciprocated, as Comrade Corbyn wanted Brigadier Blair to be charged with war crimes. Fighting old battles is easier than beating the Tories.

Brexit is a ticket to travel. The Independent Parliamentary Standards Authority is lifting its three-trip cap on funded journeys to Europe for MPs. The idea of paying for as many cross-Channel visits as a politician can enjoy reminds me of Denis MacShane. Under the old limits, he ended up in the clink for fiddling accounts to fund his Continental missionary work. If the new rule was applied retrospectively, perhaps the former Labour minister should be entitled to get his seat back and compensation?

The word in Ukip is that Paul Nuttall, OBE VC KG – the ridiculed former Premier League professional footballer and England 1966 World Cup winner – has cold feet after his Stoke mauling about standing in a by-election in Leigh (assuming that Andy Burnham is elected mayor of Greater Manchester in May). The electorate already knows his Walter Mitty act too well.

A senior Labour MP, who demanded anonymity, revealed that she had received a letter after Leicester’s Keith Vaz paid men to entertain him. Vaz had posed as Jim the washing machine man. Why, asked the complainant, wasn’t this second job listed in the register of members’ interests? She’s avoiding writing a reply.

Years ago, this column unearthed and ridiculed the early journalism of George Osborne, who must be the least qualified newspaper editor in history. The cabinet lackey Ben “Selwyn” Gummer’s feeble intervention in the Osborne debate has put him on our radar. We are now watching him and will be reporting back. My snouts are already unearthing interesting information.

Kevin Maguire is the associate editor (politics) of the Daily Mirror

Kevin Maguire is Associate Editor (Politics) on the Daily Mirror and author of our Commons Confidential column on the high politics and low life in Westminster. An award-winning journalist, he is in frequent demand on television and radio and co-authored a book on great parliamentary scandals. He was formerly Chief Reporter on the Guardian and Labour Correspondent on the Daily Telegraph.

This article first appeared in the 23 March 2017 issue of the New Statesman, Trump's permanent revolution