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December 12, 2013 10:49 pm
The rise of some careers – those of Lawrence Summers and Barack Obama, for example – is meteoric. They speed, seemingly unhindered by any obstacle, towards the positions of highest power.
Janet Yellen belongs in a different category. Her rise was slow but implacable, and this year, at the age of 67, she overcame the president’s preference for his former adviser Summers to win the most powerful economic job of all: chair of the US Federal Reserve.
Accepting the nomination from Obama with the broadest of smiles, in her Brooklyn accent, the first woman to hold the post showed the determination to tackle high unemployment that has been her calling card as Fed vice-chair.
“While we have made progress, we have further to go,” she said. “Too many Americans still can’t find a job and worry about how they will pay their bills and provide for their families.”
Yellen grew up in a working-class area of New York but her family was well-provided for: her father was a doctor who worked from the ground floor of their terraced house. Academically, she excelled. It was traditional for the editor of the school newspaper to interview the student graduating top of the year so Yellen ended up interviewing herself.
She went to Brown University and then on to Yale for a doctorate. Her professor was James Tobin, the future Nobel laureate who refined Keynesian economics in the 1950s and 1960s but was also intensely interested in the real world of policy. “He encouraged his students to do work that was about something,” Yellen said of Tobin after he died. “Work that would not only meet a high intellectual standard but would improve the wellbeing of mankind.”
Her first tour at the Fed, working as an economist, came in 1977 where she also met her husband-to-be, George Akerlof, in the central bank’s cafeteria. “We liked each other immediately and decided to get married,” wrote Akerlof after he won the 2001 Nobel Prize in economics. “Not only did our personalities mesh perfectly but we have also always been in all but perfect agreement about macroeconomics.”
A successful, but not stellar, career in academia followed at the University of California, Berkeley. The couple collaborated on research and Yellen was a popular teacher at the university’s Haas School of Business.
Her destiny seemed to be that of any other university professor. But Yellen’s qualities – her interest in policy, the meticulous way she prepared and thought about problems and her social skills – had been noted by colleagues, some of whom were close to, or part of, the Clinton administration.
In 1994, aged 48, Yellen became a Fed governor and over the next 20 years there followed a succession of policy jobs: chairman of President Clinton’s Council of Economic Advisers, president of the San Francisco Fed and, finally, vice-chair of the Fed itself.
Her ascent has not been entirely smooth. The period in the White House was difficult, say colleagues from that time, as she ran up against political operators. But that experience also taught her steeliness. Good luck to any official who “forgot” to invite her to an important meeting.
Yellen’s arrival will improve the Obama administration’s dismal record of appointing women to top economic jobs. She will join Christine Lagarde, the head of the International Monetary Fund, at the helm of the global economy. The two are friends and can be spotted sitting next to each other at events such as the annual Kansas City Fed conference.
“I’m overjoyed,” said Lagarde, when asked about the selection of Yellen. The new Fed chair, she added, is “as good as you can get”.
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