Finally, President Obama appears poised to nominate Janet Yellen to replace Ben Bernanke as chairman of the Federal Reserve. Three immediate thoughts:
1. The process was embarrassing. The number of candidates under consideration was surprisingly low, with Yellen and controversial former Treasury Secretary Larry Summers as the only front-runners. As the months dragged on and backroom gossip leaked, it became clear that Obama’s first choice was Summers, with whom he was reportedly more comfortable. Once Democratic senators threatened to derail a Summers nomination and Summers withdrew his candidacy, Obama seemed desperate to find anyone other than the eminently qualified candidate he was left with. Obama will have some work to do to demonstrate his confidence and commitment to his new Fed chairman.
2. It never hurts to make history. Yellen is the first woman to serve as the most powerful economic policymaker in the world, and her nomination may help assuage critics who say that Obama has fallen short on his commitment to promote women in government—even though he diluted some of that goodwill with his foot-dragging.
3. Yellen, currently vice chair of the Federal Reserve, represents continuity, which the markets tend to like. She is highly concerned with the human toll of unemployment and is expected to continue Bernanke’s policies of ultra-low interest rates and other aggressive moves to support the economy and promote growth. This isn’t going to please everybody, but Yellen is a scholar and a diplomat, and is known for tactfully handling the Fed’s prickly personalities. In the end, Obama’s dithering on the timing may serve him well, as Republicans will have a hard time attacking his nominee when they’re busy defending their decision to drive the U.S. economy into the abyss.