What Janet Yellen will do with the nation's purse
How she will run the world's largest central bank differently than Ben Bernanke and what has shaped her views.
When Janet Yellen was declared valedictorian in high school, a profile of her in the student newspaper told of her accomplishments. But it also revealed a seemingly tension-filled interview. The article describes the young Ms. Yellen both interrupting, and being interrupted by, a reporter from the school paper, The Pilot.Skip to next paragraph
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"Come now ... you're letting The Pilot go to your head!" Yellen snaps at the interviewer at one point. At another, Yellen reverses roles by becoming the questioner, to which the reporter replies, "No comment!"
Not perhaps normal fare for a 1963 high school newspaper, in which such a story might typically emerge as a prosaic recounting of a top student's academic achievements. But Yellen was not ordinary, even as valedictorians go. For one thing, she was the editor in chief of The Pilot at the time and in that role had opted to write the story. The tension in the room, it turns out, was actually Yellen being interviewed by ... herself.
The relatively short article, viewed in hindsight, hints at several traits that friends and colleagues say are defining ones for Yellen, who is poised to become the next chair of the Federal Reserve, the world's most prominent central bank.
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The verbal sparring between Yellen the reporter and Yellen the student was an engaging – and humorous – literary device. But it also shows how Yellen is inclined to ask probing questions and to be interested in people even as she grapples with abstract ideas. Saying "come now ..." and interrupting herself, Yellen revealed not so much a combative personality as someone prone to get to the point and to avoid becoming too proud of her own intellect.
In fact, many people who know her say those points sum up a prominent part of Yellen's persona: She's ultrasmart but also ultramethodical – wanting to think through problems from every angle and with an open mind.
"She was brilliant and a hard worker," says Lois Hedberg, a classmate and friend from those days at Fort Hamilton High School in Brooklyn, N.Y. "I don't think she ever just got along on brilliance."
Her thorough, skip-no-detail approach will be tested in the years ahead as Yellen begins a four-year term scheduled to start at the end of January. Arguably no individual will have more influence over financial conditions for American families. She can't pull the levers of monetary policy all alone, but Fed chiefs traditionally have wielded substantial influence guiding the course of everything from interest rates to the regulatory climate for US banks.
And Yellen, appointed by President Obama to succeed Ben Bernanke, arrives at a crucial time. The central bank today is playing an unusually large role in efforts to revive the economy, because the rest of Washington is mired in partisan gridlock.