The Federal Reserve insists that its policies are non-partisan. However, to maintain that image the Fed, like Caesar’s wife, must be above suspicion. Unfortunately, major public appearances by Fed Chair Janet Yellen since her term began raise doubts about the tilt of Fed policy.
In her first major appearance in Chicago back in March Yellen donned a welding mask on a trip to a trade school in the southwest area of the City. In her speech she mentioned the stories of three specific long-term unemployed workers, two of whom just happened to have spent time in jail. A Fed spokesperson confirmed that Yellen had met each and knew of the individuals’ pasts before the speech.
It’s reassuring to know that the Fed Chair is concerned with unemployed people, but her choice of photo-ops and examples are curious. There are a great many middle class white-collar workers having a hard time finding jobs. What about the plight of the over 50 year-old unemployed facing age discrimination? That problem always seems to escape close attention. Such examples would have equally illustrated her concern, but in non-political terms. There was no need for the appearance of supporting trade unions or those with criminal records. Unless the purpose was to appease those who cheered her nomination.
More recently, Ms. Yellen has waded into the hot political topic of income inequality. Speaking at a Boston Fed conference, she not only expressed concern for income inequality, but stated that “social safety-net spending” and “public funding of education” are ways “those governments can help offset the advantages of some households.” Such statements could be interpreted as endorsing income redistribution. Moreover, that speech was preceded the day before by a visit restricted to a low-income neighborhood of Boston.
As if that were not questionable enough, the speech was followed by an unusual meeting with what Bloomberg.com reported were “labor and community organizers.” It even included one person from Ferguson, Missouri, the black community near St. Louis that has media focused on the politically charged issue of racial inequality. These groups had only gained attention by protesting at the Kansas City Fed Jackson Hole Conference a full three months before, and they used the occasion to promote their political ends. Do groups now have to protest outside Fed meetings to be heard?
“I love that Chair Yellen and three Fed governors actually had public meetings,” said Sen. Sherrod Brown of Ohio, an outspoken member of the Senate Democrats’ liberal wing, commending Yellen and her colleagues for meeting with “community organizers” representing the far left faction of the Democratic Party. The question that should be on everyone’s mind is, will Madam Yellen open her conference room — and mind — to the free-market think tanks and grassroots activists that represent the center right of economic thought?
To some, Madam Yellen often acts like a candidate running for president rather than a discreet non-partisan Fed Chairman, but each of her public appearances could be justified individually. The problem is the trend. The left has no monopoly on the unemployed or concern for unemployment. Groups of all persuasions have spoken out on these issues over the last few years. Why isn’t she meeting with them?
Republicans now have the ability to hold the Fed accountable and question this new venture into left-wing politics. Chair Yellen would be well served to exercise balance and provide equal opportunity to those who offer a different perspective. The current public trend creates a slippery slope. If the Fed Chair and other board members do not broaden the political scope and content of their public appearances, the Fed’s non-partisan image will be shattered and Republicans would be right to rein in the Fed.
American Principles in Action has organized a representative coalition of center right organizations ready, willing and able to share concerns and solutions for confronting the stagnant wages, rising cost of living and widening income gap that is confounding Fed policy makers. We wait in eager anticipation for Madam Yellen’s response.
Steve Lonegan is Director of Monetary Policy at American Principles in Action.