Commentary Magazine


The Next Fed Chairman

The chairman of the Federal Reserve is, arguably, the second most powerful office in Washington. So who gets to occupy that office is always subject to politics and fierce lobbying. But since the Democratic Party holds the White House and the Senate, the arguments over whom to appoint are not about fiscal policy or basic economic philosophy, they’re about what sex the next chairman should be.

There has never been a female Fed chairman and so, feminists argue, the next one must be. Personally I wonder when, if ever, this first-X-to-be-Y obsession of the left (and journalists, but I repeat myself) will end. It is more than abundantly clear that one’s gender, ethnic background, race, etc. are no longer any impediment to gaining high political (or corporate) office. But I suspect that twenty years from now there will still be breathless headlines heralding the appointment—for the first time in history!—of a left-handed gay former dentist of Lithuanian descent to the office of third assistant deputy undersecretary of homeland security.

The feminist wing of the party wants Janet Yellen, currently the vice chairman of the Fed’s board and former president of the San Francisco Federal Reserve Bank. The Wall Street wing of the party, led by Robert Rubin, wants Lawrence Summers, former secretary of the treasury under Bill Clinton and former director of the National Economic Council under Barack Obama. Both have had distinguished careers as economics professors. In other words, both have first-class résumés for the job.

And there is not a whole lot of difference between them in terms of policy. Yellen has never met a monetary stimulus she didn’t like, and that would make Wall Street nervous. Summers is currently a consultant at Citibank (where Democratic financial politicians wait out their occasional exiles from Washington) but is hardly a fiscal conservative. Neither is likely to place a priority on getting the Fed out of the stimulus game and back to maintaining price stability.

The Wall Street Journal is not terribly impressed with either candidate. The New York Times (are you sitting down?) prefers the more liberal Janet Yellen. But, except to the gender-obsessed, it won’t make a lot of difference which one wins this fight.