It has been hard having a woman lead the world’s most powerful economic institution, the Federal Reserve. Federal Open Market Committee meetings have become giant cryfests, punctuated by breaks for emotional overeating. Interest-rate setting has started to align with the lunar cycle. Worst, Janet Yellen, with her small lady brain, has failed to grok that low interest rates harm savers. She’d better sit down with her husband so he can explain that to her!
That last bit — astonishingly, or maybe not so astonishingly — is a real-life, actual suggestion being made by Ralph Nader, who dings Yellen for hurting seniors, not helping payday-loan borrowers, being in the pocket of the big banks, and for playing politics, all in one fantastically sexist opinion piece.
Chairwoman Yellen, I think you should sit down with your Nobel Prize winning husband, economist George Akerlof, who is known to be consumer-sensitive. Together, figure out what to do for tens of millions of Americans who, with more interest income, could stimulate the economy by spending toward the necessities of life.
For heaven’s sake, you’re a “liberal” from Berkeley! That is supposed to mean something other than to be indentured by the culture and jargon of the Federal Reserve. If you need further nudging on monetary and regulatory policies of the Fed, other than interest rate decisions, why not invite Berkeley Professor Robert Reich, one of your long-time friends and admirers, to lunch on your next trip home?
For the record, Reich is firmly against the Fed raising interest rates, arguing that doing so would “slow the economy and impose a huge burden on Americans who remain unemployed or are working part-time or whose wages are still way too low.” Indeed, he helped a number of powerful progressive groups campaign against a Fed hike earlier this year.
Akerlof seems unlikely to disagree with his wife about the appropriate path for monetary policy, whether she ends up pushing for a rate hike or not.
“We liked each other immediately and decided to get married,” Mr. Akerlof wrote in a personal history after winning the Nobel Prize in 2001. “Not only did our personalities mesh perfectly, but we have also always been in all but perfect agreement about macroeconomics. Our lone disagreement is that she is a bit more supportive of free trade than I.”
And Yellen knows perfectly well that low interest rates hurt savers. Here’s from one of her press conferences earlier this year.
From the point of view of savers, of course this has been a very difficult period. Many retirees – and I hear from some almost every day – are really suffering from low rates that they had anticipated would bolster their retirement income. This, you know, obviously has been one of the adverse consequences of a period of low rates. The – you know, we have a good reason for having kept rates at the levels that we have. We – our charge from Congress is to pursue the goals of maximum employment and price stability. That’s what we’ve been doing. And obviously there are benefits from a strong economy to every household in the economy, including savers, from having a better job market and a more secure economy. But, yes, when the time comes for us to raise rates, I think there will be some benefits that flow through to savers.
Perhaps sometime Nader could sit down with a monetary economist to learn about the complexities of interest-rate policy, and maybe to learn a thing or two about gender politics too.