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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“Stop treating antibiotics like sweets”: the threat we face from antibioitic resistance

Currently, 700,000 people die per year from the resistance of microbes to medicine, and it is predicted that 10 million people will die per year by 2050.

Got a cold? Take some antibiotics. Feeling under the weather? Penicillin will patch you up. Or so the common advice goes. However, unless we start to rethink our dependency on antibiotics, a death every three seconds is the threat we potentially face from evolving resistance by microorganisms to the drugs. The stark warning was issued following a review which analysed the consequences we could face from needless administering of antibiotics.

The antimicrobial resistance (AMR) review was led by economist Jim O’Neill, who was tasked by the prime minister in 2014 with investigating the impact of growing resistance. Currently, 700,000 people die per year from the resistance of microbes to medicine, and the report predicts that 10 million people will die per year by 2050. An overwhelming global expense of $100trn will be the price to pay unless incisive, collaborative action is taken.

Antimicrobial resistance (as referred to in the title of the report) is an umbrella term for the resistance developed by microorganisms to drugs specifically designed to combat the infections they cause. Microorganisms include things such as bacteria, fungi, viruses and parasites. The report especially focused on the ramifications of increased resistance of microorganisms to anitbiotics.

Many medical procedures are dependent on the effectiveness of drugs such as antibiotics: treatments for cancer patients and antibiotic prophylaxis during surgeries, for example. All could be under threat by increased resistance. The continuing rise of resistant superbugs and the impotence of antibiotics would pose “as big a risk as terrorism”. A post-antibiotic world would spell dystopia.

Bacterial microbes develop resistance through evolutionary-based natural selection. Mutations to their genetic makeup are passed on to other bacteria through an exchange of plasmid DNA. Unnecessary prescriptions by doctors and inappropriate antibiotic usage by patients (such as half-finishing a course) also contribute. Over the years, a number of bacteria and viruses have found a way to counteract antibiotics used against them: E. Coli, malaria, tuberculosis and Staphylococcus aureus, to name a few.

The report employed the consultancy firms KPMG and Rand to undertake the analyses, and O’Neill outlines 10 different measures to tackle the issue. Key areas of focus include: global campaigns to expand public awareness, the upholding of financial and economic measures by pharmaceutical companies in the development of new medicines and vaccines as alternatives, greater sanitation to prevent infections spreading, and the creation of a Global Innovation Fund which will enable collective research.

O’Neill told the BBC:

“We need to inform in different ways, all over the world, why it’s crucial we stop treating our antibiotics like sweets. If we don’t solve the problem we are heading to the dark ages; we will have a lot of people dying. We have made some pretty challenging recommendations which require everybody to get out of the comfort zone, because if we don’t then we aren’t going to be able to solve this problem.”

In the foreword of the report, O’Neill states that over 1 million people have died from developing resistance since 2014. The urgency in tackling this issue is clear, which is why he has offered an incentive to companies to develop new treatments - a reward of more than $1 billion will be given to those who bring a successful new treatment to the market.

According to the report, the cost of successful global action would equate to $40bn over the next decade, which could result in the development of 15 new antibiotics. Small cuts to health budgets and a tax on antibiotics have been proposed as ways of achieving the financial quota for drug research.

Though the report has highlighted the severity of antibiotic resistance, some believe that the full extent of the matter isn’t sufficiently explored. O’Neill mentions that there are some secondary effects which haven’t been taken into account “such as the risks in carrying out caesarean sections, hip replacements, or gut surgery”. This suggests that alternative remedies should be found for non-surgical procedures, so that antibiotics aren’t made redundant in environments where they are most needed.

Since the analysis began in 2014, new types of resistance have surfaced, including a resistance to colistin, a drug which is currently used as a last-resort. Its affordability resulted in increased use, particularly as a component of animal feed, meaning greater opportunity for superbugs to develop resistance to even our most dependable of antibiotics.

Widespread drug resistance would prove to be a big issue for many charities tackling infections around the world. Dr Grania Bridgen from Médecins Sans Frontières told the BBC that the report addresses a “broad market failure”, which is important but isn’t enough.

Despite the mixed response to the report, it has had a seal of approval from the Wellcome Trust and the Department of Health. Speaking earlier this year, Chancellor George Osborne stated this issue “is not just a health problem but an economic one, too. The cost of doing nothing, both in terms of lives lost and money wasted, is too great, and the world needs to come together to agree a common approach.”

If antibiotics are to remain potent antidotes to infectious diseases in the future, we need to put a plan in motion now.