Thursday, August 15, 2013

New Fed Chair

The debate is a little odd to me.  Picking Summers over Yellen seems monumentally pig-headed.  Still, for David Atkins to be this upset seems odd to me.  At some level, there just isn't likely to be any difference in desired monetary policy between them.  Style, yes, history, yes, qualifications, yes and all those things favor Yellen (which is why Summers is a stupid pick), but both are supporters of quantitative easing, and neither sees inflation as a problem (right now).  Summers may be a bit more likely to see asset bubbles as forming (now, not in the past) and Yellen has indicated in the past that she may be happier with a lower inflation target.  Both of those things are bad, and would imply too early cutoff of QE.

In the end, David's piece is just weird.  For all the reasons he gives for being disappointed in Obama about this pick could equally apply to Yellen.  If he really wants a different (more progressive) attitude at the fed than Summers would bring, then he should be talking up someone other than Yellen (maybe Christy Romer--though she's probably not very differnt from Yellen on monitary policy either--maybe one of the even more dovish Fed board members).

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