Janet Yellen will champion Main Street, not Wall Street

President-elect Joe Biden’s pick for Treasury secretary has long worried that the middle class keeps falling behind in today’s economy.

Owen Ullmann
Opinion contributor

Janet Yellen, President-elect Joe Biden’s choice to become his Treasury secretary, brings some notable “firsts” to the job. She will be the first woman to occupy a post that dates back to Alexander Hamilton in 1789. She was the first woman to chair the Federal Reserve. And she also will be the first person of either gender to achieve the government’s economic trifecta: someone who served as chair of the Council of Economic Advisers, Federal Reserve chair, and now, Treasury chief. 

Even so, as a journalist who covered her for three decades and interviewed her dozens of times, I believe that what distinguishes her most in the job is her empathy for the plight of the average working man and woman, a compassion Biden shares. In her background and comments, she has shown a deep concern that today’s economy is no longer helping the bottom half of the income ladder achieve the American Dream.

Yellen understands the needs of the middle and lower classes

Most occupants of the Treasury post, one of the most important in government, have come from Wall Street or corporate America. Their focus traditionally has been to keep the U.S. economy sound by making sure the financial markets and big business are healthy and happy. They have known to two decimal points the value of the dollar relative to the Japanese yen, but likely hadn’t a clue what a week’s worth of groceries cost the typical American family.

Yellen surely has the skills to deal with the world of high finance. She proved that amply as Fed Chair from 2014 to 2018. But her background as a child growing up in a middle-class family in Brooklyn and later as a labor economist has given her a front-row seat to observe the struggle of average working Americans trying to make ends meet.

I remember one interview with her several years ago when the economy was growing and unemployment was falling. I asked what worried her most. She replied immediately that even a healthy economy was no longer working to the benefit of the bottom half of Americans, who kept falling behind because of stagnant wages; rising costs for health care, housing and education, and an inability to save money.

Janet Yellen on March 15, 2017, in Washington, D.C.

That is a theme she has echoed throughout her career, including as Fed chair in a speech to a conference sponsored the Federal Reserve Bank of Boston in 2014. “The … continuing increase in inequality in the United States greatly concern me,” she said. “I think it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.” 

That is classic Yellen but a politically charged topic traditionally taboo for Fed chairs, whose mandate is to keep inflation and unemployment low, and leave such issues as income inequality to those in more political positions.

Now, Yellen will have an opportunity to do something about the problem as Treasury secretary.

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Numerous studies, including recent ones by the Congressional Budget Office and the Peterson Institute for International Economics, show income inequality has been growing in the United States for decades and is being exacerbated by the COVID-19 pandemic. That’s because employment among high-income workers has remained relatively unscathed while joblessness among lower-paid workers has soared, particularly in the service industry. On top of that, a stock market near record highs is increasing the wealth of the more affluent sector of Americans with financial investments.

Yellen is prepared for what may be ahead

Come Jan. 20, when the Biden administration commences, the economy will be at risk of a new, harsh downturn, as supplemental unemployment benefits end, along with a moratorium on evictions and student loan defaults.

Talks on a new stimulus plan between the outgoing Trump administration and Congress have stalemated. Whether the Biden administration can break the logjam may depend on two Senate runoff races in Georgia in January that will determine whether Republicans keep control of the chamber.

But one thing is certain: average Americans will have a champion in their corner, fighting to make sure the American Dream doesn’t turn into a nightmare for millions of families this coming winter.

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Janet Yellen is no wild-eyed liberal trying to upend the established order. She proved that repeatedly in her previous posts, and even was criticized by liberal Democrats when she pushed through modest interest-rate increases during her tenure as Fed Chair to ensure inflation remained in check.

Rather, Yellen will come into the job as someone with a superlative record for economic forecasting, a reputation for being the most prepared person in the room, and a deep compassion to do the right thing for those most in need.

Working Americans, you have something to be thankful for this Thanksgiving: a Treasury secretary who will have your backs.

Owen Ullmann, a former managing editor at USA TODAY, is currently executive editor of The International Economy magazine.