Who is Janet Yellen, Biden’s pioneering pick to lead the Treasury amid a deep crisis? – The Washington Post

Yellen, 74, has had a long career of breaking glass ceilings for women and handling big crises. If confirmed by the Senate, she would be the first woman to lead the Treasury Department since the institution was founded in 1789.

So who is Yellen? Born in Brooklyn, Yellen is a renowned economist who spent years as a professor before venturing into Democratic politics as head of President Bill Clinton’s Council of Economic Advisers in the late 1990s. She then took on a series of high-profile roles at the Federal Reserve that culminated in President Barack Obama’s nominating her as Fed chair. She was the first woman to serve in that top post.

Yellen led the Fed from 2014 to 2018, making her one of the most powerful women in the world and a key architect of the economic recovery. Unemployment fell more during her tenure than for any other Fed chair since World War II. Former colleagues often describe her as being like Mary Poppins: firm but kind, incredibly smart and always prepared. The question she asks often — of herself and her team — is: What are we missing? And what if we’re wrong?

Her constant questioning of whether economic models and forecasts are correct helped her become one of the first policymakers to foresee the 2008 financial crisis and the deep problems in the housing market. At the time she was serving as president of the Federal Reserve Bank of San Francisco.

“She was one of the people that was sounding the alarm before the financial system melted down,” said Christina Romer, who served as Obama’s top economist during the crisis. “When things were bad, Janet was first person I’d call.”

After an early stumble as Fed chair where Yellen misspoke and the stock market tanked, she garnered a reputation for being the most prepared in the room. She carried a thick binder of notes to news conferences, and she constructed her own dashboard of indicators to better understand the true health of the economy. As many conservatives pushed her to raise interest rates, Yellen went slowly, believing unemployment could go lower without triggering inflation. She turned out to be right, and she ushered in a sea-change in thinking at the Fed about how low unemployment could drop.

The U.S. unemployment rate was 6.7 percent when Yellen started as Fed chair. When she left, it was 4.1 percent. Despite her success, President Trump broke with tradition, opting not to reappoint her to the top Fed post, partly because he thought she was too short for such a big job. (Yellen is 5 feet 3 inches tall). Trump picked Republican lawyer Jerome H. Powell instead.

As treasury secretary, Yellen will again face a monumental challenge as the nation tries to bounce back from a widespread and deadly pandemic that has claimed more than 250,000 American lives, caused hundreds of thousands of businesses to close and left more than 20 million people on unemployment aid, with many fearing eviction.

Yellen testified before Congress this summer, urging more stimulus. She has continued to speak publicly about her fears of a “significant blow” to the economy from rising coronavirus cases and falling household demand.

“It’s urgent” to pass more relief, Yellen told The Washington Post in August. “I am particularly concerned about the fact that quite a few, especially low-income workers, stand to suffer permanent job losses.”

Those who have known Yellen for years say that alongside her expertise, her greatest skill is her ability to build consensus. Republicans and Democrats remain deeply divided about how best to help the economy. Yellen might be able to broker a deal — and work hand-in-hand with the Fed on aid.

While she has long been a Democrat — this year she donated $2,800 to Biden and $25,000 to the Democratic Party — she is respected across the aisle and on Wall Street. She remains close with Powell and other central bankers around the world.

“People call her not just because she’s smart but because she’s always thinking about people — the people we serve,” said Mary Daly, president of the San Francisco Fed, who credits Yellen as a mentor. “People feel a part of the process. People feel like they’ve been heard.”

Yellen has also walked a line between liberals and moderates in the Democratic Party, earning respect from both wings of the party, something Biden noted when he selected her for the Treasury job.

“I consider myself a pragmatic, mainstream economist with a strong policy orientation,” Yellen said in a 1995 interview. In many ways, it’s still her style.

Beyond the current downturn, the Biden administration is striving to rebuild an economy that is better for the environment and offers more equal opportunities regardless of where a person was born.

Yellen has experience handling difficult problems like inequality, racism, climate change and financial regulation. She has called loudly for a “culture change” in economics to make the field less hostile to people who are not White men. As president of the American Economic Association, she helped oversee a survey of thousands of economists that found widespread discrimination and sexual assault. She pushed for concrete changes.

To combat climate change, Yellen led a bipartisan group of economists to sign a letter endorsing a carbon tax. And while she defends capitalism, she believes strongly in government regulation. In her final days as Fed chair, she imposed one of the harshest penalties ever on Wells Fargo after the bank’s scandal involving sham accounts.

“She has consistently shown she is willing to stand up to Wall Street,” said Joseph Stiglitz, a Nobel Prize-winning economist who taught Yellen in graduate school and remains a friend. “She doesn’t believe in the magic of self-regulation.”

Some on the left fault her for not going far enough on climate regulations, breaking up big banks or doing enough to reduce racial inequality. During her tenure as Fed chair, people began protesting her decisions to raise interest rates, arguing that it hurt minority communities that had yet to recover.

“The Fed is talking about raising interest rates. And they said that the economy is stable enough to be able to handle it,” Dawn O’Neal told The Post in 2015 as she protested at the Fed’s annual conference in Jackson Hole, Wyo. “I don’t see that economic stability. I still see people struggling.”

The pandemic recession is already the most unequal in modern U.S. history. Yellen will once again have to reckon with how to ensure Blacks, Hispanics and women are not left behind.

On the flip side, some Republicans lawmakers accuse her of being too heavy-handed on regulations and too quick to pump more stimulus into the economy. Sen. Patrick J. Toomey (R-Pa.), the likely next chairman of the Senate Banking Committee, tweeted Tuesday to warn her not to restart certain financial lifelines for businesses and municipalities.

Yellen’s life has been a series of tests that many say make her well prepared to step into this role. She graduated first in her high school class and edited the school newspaper. She discovered economics at Brown University and earned a PhD in economics from Yale University in 1971, the only woman in her class. Her notes from Yale were used for years by other students because they were so thorough.

She taught at Harvard University for several years, initially as the only female economics professor, a period she has described as “very lonely and discouraging.” Harvard did not offer her a path to tenure. She ended up as a research economist at the Fed and met her husband, George Akerlof, in the central bank’s cafeteria. Yellen and Akerlof have co-written many research papers together and have one son, who’s also an economist. Yellen ultimately became a full professor at the University of California at Berkeley.

As the Fed’s vice chair from 2010 to 2014 and then chair until 2018, Yellen ate lunch most days in the Fed’s cafeteria. Staff say she often stopped them to ask about a forecast — or their children.

“She wanted to talk economics at a very, very deep level,” said Seth Carpenter, a former Fed economist who is now chief U.S. economist at UBS. But he also recalled that “when I came back from parental leave, she took the time to stop in the hallway and ask how it’s going and look at pix on my phone.”

When asked about her hobbies, Yellen often says people would be bored if they joined her for dinner, as her family typically has deep discussions about economics. Her husband won the Nobel Prize in 2001.

She is frequently spotted drinking Diet Coke in meetings and with the collar popped up on her suit jackets, a fashion choice that has become as iconic in economic circles as the late Supreme Court Justice Ruth Bader Ginsburg’s decorative collars were in the legal profession.

While Yellen sought to downplay her gender — even requesting that people refer to her as Fed chair, not “chairwoman” — she has nonetheless become an inspiration to many women in finance and economics. Tributes poured out on social media as news of her nomination broke on Monday.

It’s not Yellen’s first time in the spotlight.

Nearly a decade ago, Daly, the San Francisco Fed president, recalls having breakfast with Yellen in a Berkeley, Calif., diner when an older woman approached Yellen to thank her for her service to the country and say how inspired she was by Yellen, who was then Fed vice chair. Yellen took it in stride, grabbing the woman’s hand and asking about her life.

Yellen is known for keeping her cool, but one of the few people to ruffle her has been Trump. She famously told Marketplace Radio in 2019 that Trump has a “lack of understanding” about the Fed and economic policy.

While Trump ultimately nominated Powell to be Fed chair, he did tell his advisers he was impressed by Yellen and called her “a wonderful woman who’s done a terrific job.”

At the Fed, Yellen oversaw about 2,800 employees and a budget of about $750 million. As treasury secretary, Yellen would oversee nearly 87,000 employees and a budget of almost $20 billion. The Treasury is responsible for collecting taxes, issuing debt, printing money, supervising banks and advising the president on economic and financial policy.