Republican lawmakers are balking at President Obama’s choice of Federal Reserve chairman, Janet Yellen, worried she will favor enhanced government intervention in the economy, including flooding the market with more dollars.
A review of her previous work finds she divined a theory that was a precursor to the current progressive campaign for the government to ensure “fair” pay to employees.
Sen. Marco Rubio, R-Fla., announced he plans to vote against Yellen, citing fears she will enact policies to the detriment of long-term economic growth.
“Altogether, she has championed policies that have diminished people’s purchasing power by weakening the dollar, made long-term savings less attractive by diminishing returns on this important behavior and put the U.S. economy at increased risk of higher inflation and another future boom-bust,” he concluded.
The inflation fears may be warranted in the case of Yellen.
As WND reported, Yellen is widely regarded as a New Keynesian, meaning she favors government or central bank intervention in the economy.
Together with her husband, Nobel Prize-winning economist George Akerlof, Yellen co- authored a theory on “fair wages” that was a precursor to a later progressive campaign for the government to ensure “fair” pay to employees.
Yellen previously served as chairwoman of President Clinton’s White House Council of Economic Advisers and taught economics at the Haas School of Business at the University of California, Berkeley.
During her tenure at the Clinton White House, Yellen was commonly referred to as a leader in the New Keynesian movement, named after 20th century British economist John Maynard Keynes, whose theories influenced the New Deal
The Boston Globe reported Yellen was among a “whole generation of economists [who] made their reputations during the 1970s devising these New Keynesian doctrines of wages, prices and market failures.”
Yellen’s most prominent theory was called the Fair Wage-Effort Hypothesis and Unemployment.
The theory posited “workers proportionately withdraw effort as their actual wage falls short of their fair wage.”
At the University of Chicago, professors Edward P. Lazear and Kathryn Shaw explained Yellen’s definition of “fair”: “A wage is generally considered as fair if the pay spread is lower than the performance differential.”
The theory helped lead to progressive policies of economic “fairness,” including the concept of a “living wage,” in which the government determines what is a fair wage.
Obama has previously supported the “living wage” concept, originally a pet project of the controversial Association of Community Organizations for Reform Now, or ACORN.
Full article: Brand-New Fears for U.S. Dollar Disaster (WND)