Challenges Await Next Treasury Head

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Former federal reserve chair janet yellen has been at the forefront of us economic policy for decades. If she's confirmed as treasury secretary she'll be taking on a new role during a time of deep political division and significant economic challenges. Joining me now to talk more about yellen's career and the roadblocks she could face going forward his wall street journal senior writer john hills and wrath. Hi john thanks for being here her. They're great to be here. So john janet yellen if confirmed would make history here as the first woman to lead the treasury after also being the first woman to lead the federal reserve. Tell us more about her extensive resume and what's led up to this moment. I don't think that's the big history being made here. The big history is that she's the first human regardless of gender to be treasury secretary chairman of the council of economic advisers and federal reserve chairwoman. So she's had a tri factor. If you add in the fact that she's also a tenured professor from berkeley then. She's hit a grand slam. This is an achievement that no person regardless of gender has achieved and the realm of economic policy. Making you know. I compare her to george shultz the republican. Who served as secretary of state for ronald reagan and also treasury secretary secretary of labor and director of management budget under richard nixon. This is just a person with about as complete resumes. You can get so. Let's talk a little bit about her previous roles as opposed to what treasury secretary rigby much less political role than treasury secretary. What about her past experiences in washington have prepared her for that. And where might we see some challenges if for her taking on a more political role. The fed is a very close in academic place. They kind of pride themselves on not getting into the mix of political debates and being. I wouldn't even say bipartisan. But eighty partisan nonpartisan. Janet yellen did serve as the chair of the council of economic advisers in the clinton administration in the late nineteen ninety s so. She has had exposure to political debates with big personalities. It's interesting though. She's married to george echo off. Who is a nobel prize winning economist in his own right and when he won the nobel prize back in two thousand and one he wrote in his autobiography about the challenges that she faced kind of managing the point ical heat waves of washington the role. He played in supporting her so she's walking in to an environment right now. That is going to be very heated in very point ical. There's gonna be a lot of fights over how much spending the government should do to get the economy out of recession and how much debt it should take on in the process. And she's going to be right in the middle of it. She's a very highly credentialed individual. And i think our challenge is going to be managing the human part of it the political part of it with republicans on capitol hill and the inevitable divisions that are gonna show up inside the biden administration itself. How do you think she will work with congress. She has support among democrats and republicans. Well you know. She knows her way around washington. That's clear and as fed chair. She did have to deal with congress. She had to go up there and testify on a regular basis to give reports on the economy and monetary policy and regulatory policy. So she knows her way around capitol hill one of the reasons that i think that president elect biden chose her is a because it does seem like she's going to have buy in from the progressive wing of the democratic party. She's actually very close to elizabeth warren and also moderates among democrats and then i would say she has a chance with some moderate republicans to try to win them over republicans in the senate in particular to try to win them over on some big debates. And that's where. I think she's going to end up focusing a lot of her attention. You know if she can hold the democratic party if i should say biden can and then win a couple of middle of the road republicans than they might be able to get their way on really big questions about fiscal policy and stimulus and driving this economy out of recession. That was really devastating and twenty twenty and that brings us to some of the key challenges. What do you think some of her first actions will be treasury secretary. And what are those big challenges. She'll be facing from the start. There's so much and this is one of the issues where the job. The treasury is much different than the job at the fed. The job at the fed comes down to two or three things. They gotta make a decision. Every eight weeks about whether interest rates should stay the same or go up a little or go down a little. And then they've got to be they're very involved in the regulation and oversight of banks and then they've got to be ready to deal with crises financial crises at the treasure. You have the tax portfolio you have sanctioned portfolio with international sanctions against countries like north korea and iran. You have the debt portfolio. You have some say in the budget. Portfolio is just a very wide and expansive portfolio. I think the first thing that she's going to confront is a decision that her predecessor will have made. Steven mnuchin called on the fed just a few days ago to end some rescue programs that were aimed at small and medium-sized businesses related to corona virus. The treasury had been designated some money to contribute to the fed program and secretary mnuchin said. The program had expired in the feds gutter return. What's left of the money but you know the new treasury secretary is going to have to decide whether the end that program as mnuchin has set out to do or renew it when that gets to the bigger issue. which is the economy itself. Is it a major crossroads right now. We had a devastating downturn the economy effectively shut in march and april it reopened. We had a very large bounce back in the summer. But it shows signs of slowing. And it's incomplete this recovery at a time when the corona virus is spreading again. Some states are putting in new restrictions on economic activity and there is a race for a vaccine to control the virus. So there's just so much happening right now and it's gonna be yelling role to guide. President elect biden on how hard the government should push to help the economy through a period where it can go one of two directions. It could go back into recession. Or if we get to vaccine quickly enough we could be into. You know a really strong extension of the recovery that we had earlier this summer. So there's just a lot of uncertainty and a lot hard choices to

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