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Why Yellen is a poor choice

Jeff Brown Contributing Columnist

January 14, 2014

On Monday morning January 6, 2014 I sent Sens. SaxbyChambliss and John Isakson the following email:


I am writing to tell you why I think Janet Yellen as Chair of the Federal Reserve would not be good for this country. Further her track record and basic economic principals are very liberal and therefore contrary to those espousing conservative views of free enterprise, less government and personal responsibility. I say this because:


· She supports the basic tenants of economist John Maynard Keynes which have largely been disproven.


· Her long term goals of zero interest rate and 2percent inflation are unsustainable and would seriously erode retirement savings.


· Yellen is diametrically opposed to laissez-faire and individualism in deference to more government


· In regard to the last point President Obama said in a recent speech in Kansas City that over the past several decades free enterprise and laissez faire have failed. However if you consider the results of the New Deal and the Great Society plus a myriad of other government programs costing trillions it is reasonable to assume that instead of the president’s contention just the opposite is true. The problem is Yellen agrees with the president. Given the almost unchecked authority of the Federal Reserve and with Yellen as chair this could exacerbate our VERY anemic recovery from the “Great Recession.”


· Many of us believe present chair Bernanke has used Qualitative Easing (QE) far too long but at least he has started to ease off of it. However with Yellen as chair who is a very strong advocate of QE it is reasonable to assume she will substantially add to the trillions of printed money that Bernanke’s policy created; some day we must “pay the piper.”


· Her plans to address unemployment are basically more of the same in terms of government solving it versus understanding our serious problems of high unemployment and underemployment are structural. Therefore it must be addressed very differently; something President Obama hasn’t understood for the 5 years he has been president.


· In 2009 Yellen, who at the time was president of the San Francisco Federal Bank, petitioned Congress to allow the Federal Reserve Bank to issue its own bonds like the Treasury has done for decades. James Rickards, author of the book, “Currency Wars: The making of the next global crisis”, said, “This bond scam was shot down on Capitol Hill.”


I could go on but I hope you agree that this is a very dangerous nominee whose nomination needs to be blocked. However, due to the unconscionable act by Senate Majority Leader Harry Reid of only requiring a majority vote versus 60 votes as had been the practice for decades she will most likely be confirmed. Nonetheless I hope you will vote NO for the reasons stated above.


Rep Jeff Brown (Ret)


Within hours of sending this Senate Majority Leader Reid called for the vote despite 18 Senators being unable to get to Washington due to the Polar Vortex. The vote was 56 for confirmation and 26 against. Had Reid not recently railroaded the above change as to how the Senate votes on confirmations Yellen would not have been confirmed; at least on this vote. Regardless this is the smallest margin of victory for a confirmation of the Chairman of the Federal Reserve in its 100 year history.


Shortly after sending the above to our senators I received an email from a key staffer of Isakson saying he would make sure Isakson got my email before he voted. Isakson voted against the confirmation. I have yet to hear from Chambliss’ office but not surprisingly, he voted for Yellen’s confirmation.


When you look at the value of a dollar over the 100 years we have had the Federal Reserve today’s dollar is worth only a few percentage points of its 1913 value but from 1813 to 1913 without a Federal Reserve the value of a dollar gained slightly. Additionally many knowledgeable people feel the Federal Reserve has failed in its primary responsibilities of maintaining price stability, being a lender of last resort, maintaining full employment, acting as a bank regulator and preserving the integrity of its balance sheet. Do you begin to wonder that those advocating for significant changes to the Federal Reserve have a valid point?


A recent Gallup poll reported that 72 percent of Americans named big government as the greatest threat to the country. In 1964, when Gallup first did this poll only 35 percent named big government. With Yellen and Obama it is abundantly obvious that they support big government. What is scary is that both have immense power to make big government even bigger!