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Yellen Prepares to Face the Music on Capitol Hill

Robert Ottone
Nov 13, 2013

Janet Yellen, set to follow Ben Bernanke into the role as chairman of the Fed, is preparing to face an onslaught of questions from Republican Senators. Tomorrow, Yellen will appear before Senators to defend her nomination as head of the U. S. central bank. Yellen, hand-picked by President Obama after Larry Summers threw in the towel, is expected to receive her appointment rather easily, as the Senate Banking Committee is currently dominated by Democrats. Republicans have already stated that they plan to block the appointment in order to seek political concessions, however. Should Yellen receive the appointment without any kind of hindrance (a complete impossibility, many estimate), she would take Bernanke’s seat on Feb. 1st. “I continue to strongly disagree with the Fed’s use of quantitative easing, and am eager to learn Ms. Yellen’s vision for the direction of the Federal Reserve as we go through the nomination process,” said Senator Mike Crapo (R-ID). Breitbart posed a list of hypothetical questions that could be asked of Yellen on Thursday. Some choice cuts include: ►Describe your justification for current Fed policy, particularly near-zero interest rates and massive Fed purchases of Treasury debt and agency securities? Why do you think these policies will grow jobs and consumer purchasing power? ►Why do you believe that a two percent inflation rate is an acceptable public policy target? Won’t a two percent inflation rate, sustained over a period of years, destroy the real purchasing power of consumers and employers? How does this help to boost spending and job creation? ►To what extent is the Dodd-Frank law, Basel III and other new regulations meant to avoid future financial crises thwarting the Fed’s efforts to bolster growth and employment? Is excessive regulation thwarting credit creation and thus job growth? Yellen has been pretty tight-lipped regarding her appointment as Fed chair. While her critics focus on her lack of foresight going into the housing and financial crisis, others laud her academic approach to running the Fed. Many senators are still concerned over quantitative easing (QE), a concept Crapo and Warren have been harping on since early last month. “We should not accept a financial system that allows the biggest banks to emerge from a crisis in record-setting shape while working Americans continue to struggle,” said Senator Elizabeth Warren (D-MA). “And we should not accept a regulatory system that is so besieged by lobbyists for the big banks that it takes years to deliver rules and then the rules that are delivered are often watered-down and ineffective.”
Nov 13, 2013