Janet Yellen: Where she stands on five key economic policy issues

If confirmed as Fed chairman, Janet Yellen would influence the trajectory of the economy going forward. Here's where she stands on five key policy issues facing the world's most powerful central bank. 

5. Housing

Kevin Lamarque/Reuters/File
Yellen speaks at the AFL-CIO in Washington in February.

Unlike many of her colleagues, Yellen proved prescient about a potential housing bubble and resulting financial crisis. Just as the recession was taking hold in December 2007, she warned at a Fed meeting in Washington that “The possibilities of a credit crunch developing and of the economy slipping into recession seem all too real,” and that the economy could begin to slow. 

In a February 2013 speech at a macroeconomics conference in Washington, Yellen outlined three "economic tailwinds" that usually help the economy bounce back from recessions. Housing was among them.  "Before the Great Recession, housing investment added an average of 1/2 percentage point to real GDP growth in the two years after each of the previous four recessions, considerably more than its contribution to growth at other times," Yellen said. "During this recovery, in contrast, residential investment, on net, has contributed very little to growth since the recession ended."

One reason for the sluggish recovery, critics say, is that while Yellen recognized the housing bubble, she (and many others) didn't realize how severely the bursting of that bubble would hit the financial system or the huge impact of household debt.

Since then, however, Yellen has called attention to the lag in the rebound in housing prices, especially for low- and moderate-income households where the bursting of the bubble was particularly severe.

"In light of this experience, it makes sense to think about the development of wealth-building vehicles for low- and moderate-income households that have some of the desirable qualities of homeownership as an investment, but perhaps have less of the risk," she said in a 2011 speech in Cleveland. "Such instruments should be simple and transparent and might include a savings commitment component."

5 of 5

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

You've read  of  free articles. Subscribe to continue.