Washington Secrets

AFL-CIO breaks silence, declares for Janet Yellen as Fed chair

By |
Paul Bedard,Washington Secrets,Federal Reserve,Ben Bernanke,AFL-CIO,Janet Yellen,Larry Summers

AFL-CIO President Richard Trumka on Thursday sided with Janet Yellen over Larry Summers as labor's choice for the next Federal Reserve chair, claiming she is more focused on adding jobs than the inflation-obsessed Summers.

"History would indicate that she is for a much more balanced approach ... than Larry," said Trumka, weighing in on the heated race to replace outgoing Fed Chairman Ben Bernanke.

With unemployment staying high for years, the labor boss said that the nation needed to break a three-decade-long trend of hiring Fed chairs who have ignored employment as they focused on keeping inflation down. It's a trend started by former President Jimmy Carter, during sky-high inflation, when he appointed Paul Volcker in 1979.

Emphasizing that the nation's largest union hasn't officially declared for a candidate, Trumka repeatedly cited the "history" of Yellen bringing to the Federal Reserve a "balanced approach" including an equal focus on full employment and inflation while Summers hasn't.

Both are President Obama's top picks to replace Bernanke. Labor's opinion is influential in the president's decision.

He said that if Summers says "we're only going to deal with inflation, then we would not support" him. Trumka called such an approach "bad for the economy."

He did, however, hold out the possibility that Summers could change his approach. "If he is sincere about that and he is honest about that, that is a whole different story."

But Trumka, hosted at a pre-Labor Day media breakfast by the Christian Science Monitor, said that Yellen has pushed equal emphasis on jobs and inflation "forever." And, he added, "she's been right on predicting what would happen in the economy."

Yellen has long argued that the Fed should do more to create jobs and has indicated that she might let inflation increase if it helped create jobs.

Paul Bedard, The Washington Examiner's "Washington Secrets" columnist, can be contacted at pbedard@washingtonexaminer.com.

View article comments Leave a comment