When it comes to economic policy in the United States, there are few people -- elected or appointed -- who have more influence than the person at the helm of the Federal Reserve.
Current Fed Chairman Ben Bernanke, like Alan Greenspan and Paul Volcker before him, did not become a household name until after being appointed chair of the Federal Reserve.
The Fed chair has subtle but far-reaching influence on the nation's monetary policies as well as playing a pivotal role in the overall strength and health of the economy.
As Bernanke prepares to exit, it was expected that President Barack Obama would appoint former U.S. Treasury Secretary Larry Summers to succeed him. But, fearing a nasty and ugly confirmation fight in the U.S. Senate, the controversial Summers recently withdrew from consideration.
That decision thrusts Federal Reserve Vice Chairwoman Janet Yellen into the role as the front-runner. She is well-respected in the Bay Area. Among many other accomplishments, Yellen served as president of the San Francisco Federal Reserve Bank and as a distinguished professor at UC Berkeley.
Although the product of an education at high-powered East Coast schools, Yellen has been associated with UC Berkeley for more than 30 years and we think she would be an excellent choice to become the nation's 15th chair of the Federal Reserve.
Yellen would be the first woman to hold the post that has existed since President Woodrow Wilson appointed Charles S. Hamlin in 1914.
By all accounts, Yellen has a sharp mind and is exceptionally focused, detail-oriented and organized. While her first choice is to build consensus, those who have worked with her say she is not at all afraid of conflict when consensus clearly is impossible. Most agree that her style would probably be a departure from the low-key Bernanke, but also much more nuanced than Summers' legendary combative nature.
The new leader of the Fed will need a full measure of all such attributes in what is likely to be an exceptionally difficult tenure.
Whereas Bernanke spent the last five years grappling with domestic issues such as the recession, a surge in unemployment, massive instability among U.S. financial institutions, to name a few; we believe that the next chair must turn attention to international issues such as an apparent growing weakness in emerging markets like China, among others.
The U.S. is clearly gravitating toward a policy in which it must become more a part of the global economy. Yellen has been traveling the globe during the last three years helping to understand and stem international crises.
That experience should stand her in good stead, if she is selected for the job. We hope Obama will do so.