Janet Yellen wants to be the Fed chair for all
Chelsea is the last place you would ever expect to find Janet Yellen, one of the most powerful people in the world.
But there she was Thursday, our Federal Reserve chair, a woman who so much as whispers and the stock market swoons. She stepped off a plane at Logan on a dreary, rain-soaked day and headed straight to one of the poorest cities in the Commonwealth.
She wasn’t there to use Chelsea as a backdrop to deliver a dry policy speech like so many opportunistic politicians before her. She was there to listen to ordinary Americans, about the struggles they have, about the jobs they can’t find, about the bills they need to pay.
Yellen is the first woman to be in charge of our monetary system, and when she took the reins in February, she made it clear she wanted to be the Fed chair for all. That contrasts sharply with her predecessors, from Ben Bernanke to Alan Greenspan to Paul Volcker — none were exactly men of the people.
It would have been more of the same if President Obama had given the Fed head nod to Larry Summers, the bombastic former Harvard president, Treasury secretary, and White House economic adviser.
The president came to his senses after Senator Elizabeth Warren and Sheila Bair, the former FDIC chair and University of Massachusetts Amherst professor, put up a stink about not promoting Yellen, Bernanke’s steady and savvy number two.
Chelsea was the first stop on a two-day visit to the region, which culminated Friday in a keynote address at the Federal Reserve Bank of Boston on income inequality.
Yellen visited an area of Chelsea that decades ago hummed with cardboard box manufacturers.
When that business went away, the neighborhood became so desolate that city manager Jay Ash, who grew up three streets away, recalled how his parents warned him not to go out after 5 p.m.
Today, the so-called Box District is being redeveloped as a residential neighborhood.
The people of Chelsea, Yellen learned, want a second chance, too.
She spent an hour with more than a dozen community leaders and area residents who gathered at the office of the Neighborhood Developers, a nonprofit aimed at lifting people out of poverty.
“It felt like a family affair, and we were all catching up,” said Ash, who sat in one of the chats.
Acting like the petite grandmother she resembles, Yellen peppered people with questions: What’s the job market like? Do you have the right skills? Can you get training?
At one point, during a tour of the center, she blew kisses to a little girl playing in an on-site day care. Afterwards, she let people take selfies with her.
“It’s easy to find out what’s going on in the bigger cities,” said Ash, explaining how those places have departments to carry out fiscal analysis. “To find out what’s going on in Chelsea, you have to come here.”
Yellen wasn’t done talking about why so many Americans are left behind. During her speech Friday morning at the downtown office of the Boston Fed, the Yale-educated economist delivered her first major address on income inequality.
Not wanting to rock the markets, which have been in turmoil, she kept close to her script, warning that she is “greatly” concerned about America’s growing inequality, which is nearing the highest levels in a century.
She also is worried about the “Great Gatsby curve,” which she described as “the finding that, among advanced economies greater income inequality is associated with diminished intergenerational mobility.
In such circumstances, society faces difficult questions of how best to fairly and justly promote equal opportunity.”
Yellen said early education — including prekindergarten — and other programs targeted to children, affordable college educations, increased business ownership, and inheritances could break the cycle of poverty.
Boston Fed president Eric Rosengren told me the two-day conference has attracted the leading scholars on the topic, and that he wants the conversation to not just be about income inequality, but also what he calls “inequality of opportunity.”
He also wants to start looking at the role communities, government, and nonprofits play in creating opportunities for those at the bottom.
The gap between the rich and poor is a topic du jour, but it has been one the Boston Fed has studied for more than a decade. In Yellen, Rosengren sees a powerful new voice.
“It’s really important for a person of her stature to be asking these kinds of questions and listening very attentively to those answers,” Rosengren said. “Not everybody in her position would necessarily choose to do that.”