The Remarkable Janet Yellen

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WASHINGTON, DC – SEPTEMBER 15: Treasury Secretary Janet Yellen speaks on the Biden administration’s … [+] proposed investments in childcare. (Photo by Drew Angerer/Getty Images)

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The economics profession continues to struggle with gender inequality, with data showing “the gender gap in economics is the largest of any academic discipline.” So what can we learn from a new biography of a remarkable pioneering woman economist—Janet Yellen?

In Empathy Economics, Owen Ullmann shows us a highly competent economist, but also someone with empathy for everyone, especially the disadvantaged. Ullman argues this perspective has fueled Yellen’s life and career. He backs it up with extensive interviews, not only with Yellen, but with academic and political colleagues, her lifelong friends, and even her husband and son, both academic economists. (Her husband is George Akerlof, a co-winner of the 2001 Nobel Prize in Economics.)

Yellen’s accomplishments are staggering. She was the second woman to win tenure at UC Berkeley’s Hass Business School, Chair of the President’s Council of Economic Advisers (CEA), President of the Federal Reserve Bank of San Francisco, and a governor, vice-chair and then chair of the Federal Reserve, and she currently serves as Secretary of the Treasury.

There are several major “firsts” in that list. First woman to head the Fed; first woman Secretary of the Treasury; second woman chair of the Council of Economic Advisers; and the only person—of any gender—to have held all three of those positions.

Ullmann shows us someone always highly regarded by teachers, peers, and later by people who worked for her. Over and over again, we hear about Yellen’s calm and friendly demeanor; her attention not only to powerful associates, but to students and staff; her analytic and communication skills; and her unflappability in a crisis.

The book’s website calls Yellen “the Ruth Bader Ginsburg of economics,” and as a trailblazer, that’s certainly true. But unlike Ginsburg, whose legal career prior to the Supreme Court focused on gender discrimination, Yellen didn’t rock the boat in her career. Economist Laura Tyson is quoted as saying “Janet never thought of herself as someone breaking glass ceilings,” a conclusion reflected in many of the interviews.

Like other women, Yellen certainly faced, and still faces, sexism. The economics profession today is no advertisement for women’s equality, and it was even worse when Yellen was coming up. Women were rarely in elite graduate programs, and they often were subjected to degrading intellectual treatment and overt sexual harassment. (Yellen studied with Nobel laureate James Tobin at Yale, remembered as a fair and supportive mentor.)

She taught at Harvard after getting her Ph.D, but wasn’t offered tenure, and left to work at the Federal Reserve. When Yellen taught there, Harvard had around 750 faculty members, 2% of them women, with half of those in either public health or education, and none in economics. Harvard didn’t offer tenure to a woman economist, Claudia Goldin, until 1990. Those experiences were surely on Yellen’s mind when as President of the American Economic Association she championed efforts for greater diversity and inclusion in economics.

But even with her deeply felt concerns about economic inequality, Yellen wasn’t at the cutting edge of public policies to address it, unlike Ginsburg’s work in gender discrimination. Yellen is a moderate Keynesian who holds generally mainstream economic views. At her CEA hearing, she described herself as a “non-ideological pragmatist,” a pretty good description.

Like many mainstream economists, she then supported “unwinding” the Glass-Steagall Act, deregulation that later helped plunge the economy into a severe crisis. She favored reducing cost-of-living adjustments on Social Security, and supported greater free trade, again in line with many economists but opposed by more leftist Democrats.

Indeed, Yellen wouldn’t have been a candidate for the high positions she’s held without mainstream views. American economic policy, at least for Democrats, wasn’t supporting ideas much out of the mainstream during the Clinton and Obama presidencies. (Republicans are much more accepting of unorthodox ideas, often from a fringe with little or no intellectual standing.) So Yellen’s competence, economic smarts, and emotional intelligence and interpersonal skills, coupled with mainstream views, made her a strong candidate for these high-level jobs.

Pressure for diversity also helped; Ginsburg used to note she wouldn’t have succeeded without affirmative action, even though her skills were unquestionable. Democratic support for diversity helped Yellen become Fed chair over President Obama’s favored candidate, Larry Summers. Some viewed Summers as a more brilliant academic economist, with substantial policy experience, but also with an abrasive personality. He drew heavy fire from Democratic progressives, on both personal and policy grounds, including his advocacy of financial deregulation. As his nomination went down in flames, Yellen was a clear and non-controversial alternative.

There’s a lot to cover in Yellen’s career, and the book’s author works hard (not always successfully) to balance economics, details of public policy (how the Federal Reserve works, international tax treaties, etc.), and personal stories. There are long blocks of interviews, which could have been edited down, and sometimes excessive detail (an entire chapter about Yellen’s nomination for Treasury Secretary includes many details from her financial disclosure statement, etc.)

But it’s very rare to read a biography of someone so smart and accomplished, in so contested a field, where virtually everyone says how decent and nice the person is. It’s a fascinating story, and one that gives due credit to a remarkable economist, policy leader, and woman.