Janet Yellen to #2 at Fed. I don't know enough about Janet Yellen to give an expert opinion, but there are two things I don't like about the choice. The first is her age -- 64 -- and no, it's not just because I'm biased against old people for important positions, although I do think that experience wins out over adaptability/intellect too much for positions such as this. I would rather they pick a younger, up-and-coming liberal Democratic economist who could use the position to augment her/his resume and gain experience for possible appointments to other offices later on, such as Fed Chair.
Second knock against her is that, in the past year or so, I don't recall her disagreeing with Fed policy in the minutes. I felt very strongly last summer that the risks between inflation and unemployment were unbalanced, with continued high unemployment being a significant risk, and inflation being low risk. Janet Yellen was apparently more worried about inflation. Unfortunately, I turned out to be correct and she turned out to be wrong.
Having said all that, she is known as an inflation dove, she is a Democrat, and she's married to George Akerlof, who's just awesome. The problem is that I'm not familiar with any of the evidence which suggests she's an inflation dove. She normally agrees with the rest of the FOMC. According to Larry Meyer: "The final question is whether Janet is really a dove. Let me tell you a story. Janet and I held very similar views when we were colleagues on the Committee, despite the fact that I was immediately viewed as a hawk and she was already viewed as a dove. (I thought of myself at the time as being a "hawkish dove.") In any case, when it comes to ensuring price stability and maintaining well-anchored inflation expectations, there are no doves on the Committee."
Maybe she'll surprise me, but at present, she doesn't strike me as the most inspired choice.
Friday Night Music: Warpaint, Elephants
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