Senate Confirms Janet Yellen as New Fed Chair; Expect More of the Same, Says Filmmaker Who Interviewed Her

The Senate has confirmed Janet Yellen as the new chair of the Federal Reserve in a 56-26 vote. While some media outlets are quick to celebrate the first female appointee to this position, Reason TV talked to at least one person who sees little to celebrate when it comes to Yellen's views on monetary policy and quantitative easing.

Jim Bruce interviewed Janet Yellen while producing the documentary "Money for Nothing: Inside the Federal Reserve," and says the following in an interview with Reason TV (featured below; relevant bite starts at 7:30 mark):

I'm concerned that Janet Yellen is going to follow the policies of Ben Bernanke. It's going to be more of the same. I think she really has all the intentions you want. She wants to help the average person. But I think that her idea is that more quantitative easing, more periods of zero percent interest rates, is going to do that.

Yellen has said as much throughout her confirmation hearings, stating that near-zero interest rates remain a necessity until capital investment has strengthened, while also arguing that high interest rates would be, in a sense, just as "artificial" as current interest rates. Via the Washington Post:

"Isn’t the zero lower bound in some ways also artificial?" asked [Sen. Chuck] Schumer (D-N.Y.). "Isn’t QE2 just another way to influence interest rates. If you didn’t do QE, wouldn’t interest rates be artificially high?"

Yellen clearly agreed, and offered what is surely the wonkiest answer in the entire hearing.

"If you judge what’s high or low by the needs of the economy, people sometimes talk about a concept called equilibrium real rate," Yellen said. "When there’s a lot of saving and not very much investment, which is where we are now, the natural forces of the economy are pushing interest rates down. It is these forces we're trying to cope with."

Against that backdrop, what would happen if the Fed hiked interest rates?

"If we were to try to push rates up when the economy has that much saving and such weak investment, we would truly harm the recovery. Having pushed rates to zero, by many estimates we would want to have negative interest rates. Of course we can’t achieve that. As you indicate, that's why we’re trying to push down longer-term interest rates."

Watch Reason TV's interview with Jim Bruce below, and check out Bruce's film here.

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  • ||

    But but but FURST WOMANZ CHAIRMEN IS TEH HISTORIC!!!

  • Rich||

    "Having pushed rates to zero, by many estimates we would want to have negative interest rates. Of course we can’t achieve that. "

    Oh, come on, Janet. Think outside the box!

  • anon||

    "Having pushed rates to zero, by many estimates we would want to have negative interest rates. Of course we can’t achieve that. "

    You sure can't with an attitude like that!

  • Rich||

    "When there’s a lot of saving and not very much investment, … the natural forces of the economy are pushing interest rates down. It is these forces we're trying to cope with."

    Just ban saving and mandate investment. How hard was that?

  • anon||

    Kinda what a 401k and IRA's are.

    So, yeah, you're late to the party on that one!

  • Rich||

    So, what is the new Fed Chair whining about?

  • anon||

    How Bernanke drove interest rates so far negative that she can't make them even more negative, I guess?

    Not really sure, but I bet it's something about how she can't fuck us over more than we've already been fucked.

  • prolefeed||

    "If you judge what’s high or low by the needs of the economy, people sometimes talk about a concept called equilibrium real rate," Yellen said. "When there’s a lot of saving and not very much investment, which is where we are now, the natural forces of the economy are pushing interest rates down.

    She uses a lot of words to not-say "I'm gonna counterfeit a lot of money and destroy the value of the dollar to pay for Congress spending twice what it steals."

  • Sudden||

    FFS, saving IS investment. Unless they're putting cash into their mattress (not entirely unreasonable given current interest rates) or doing what leftists were raised to believe TEH EVUL RICH do, swimming in a money bin a la Scrooge McDuck, that money is in a bank yielding an absurdly low interest rate but being lent out by said bank to investors chasing returns.

  • Sudden||

    Think outside the box!

    SEXIST!!1!!1!!!! MALE GAZE!1!!!!1!!!

  • pan fried wylie||

    I thought it was called inflation.

  • ||

    Her analysis of interest rates seems hella retarded to me. People are saving because they don't know what's going to happen. Having incredibly shitty interest rates is not in any way driving that, and if it was going to have an effect on it, you would expect it to drive investment, because the interest rates are fucking abysmal so you make almost nothing saving.

    Her answer basically sounds like the equivalent of of a Star Trek technology explanation. "If we just reroute the primary engine coolant through the tachyon dish, it'll restructure their shields!" Wave hands, walk away.

  • Raven Nation||

    " People are saving because they don't know what's going to happen"

    Agree. I have "emergency" money in a savings account. And some of my 401(k) is going into MM accounts solely out of "preservation of capital" fear. Which, of course, is costing me w.r.t. inflation.

  • ||

    I just checked average rates for 12-month CDs with a minimum of $25,000. It's one percent. Back in 2006-2007 I remember it being something like six percent.

    What the Fed is doing to interest rates is fucked.

  • Raven Nation||

    I had $2k in a MM fund. Basically just there as a rainy day fund. Took me three years to realize they hadn't been paying interest at all.

    So, decided to close it out and pay off a credit card. Interestingly, the company didn't even ask me once why I was closing. Tells me that it's not worth their while to maintain many of those accounts.

  • ||

    I think interest-bearing checking accounts that have minimum balances are running at something like 0.15%. It's just laughable. The entire interest system has been reversed. Instead of making money off your saved liquidity, having liquidity gets you almost nothing (except being somewhat nimble).

    And I have no idea what the interest rates on credit cards are as I never have a balance, but I imagine it's actually really high.

  • Scruffy Nerfherder||

    Its almost like they want a debt driven society....

  • ||

    Its almost like they want a debt driven society....

    Ya think?

  • Raven Nation||

    And that's one of the things that works against people close to, or in, retirement. They can't afford to convert investments into savings.

  • JW||

    My savings account went to 0% a few weeks back. They're not even trying to hide it any longer.

  • JW||

    My savings account went to 0% a few weeks back. They're not even trying to hide it any longer.

  • JW||

    My savings account went to 0% a few weeks back. They're not even trying to hide it any longer.

  • JW||

    My savings account went to 0% a few weeks back. They're not even trying to hide it any longer.

  • JW||

    Oh, fuck you very much, squirrels. Double-double posting. That's a new one.

  • anon||

    Her answer basically sounds like the equivalent of of a Star Trek technology explanation.

    There's a reason for that: because it's exactly the equivalent of a Star Trek technology explanation.

    When you've made shit up for this long, you just can't stop making shit up.

  • Dweebston||

    The Klingons and the Romulans pose no threat to us
    'Cuz if we find we're in a bind we'll just make some shit up

  • ||

    Well, at some point making up shit isn't going to fly any more, and unfortunately The Bernank looks like he's going to get away and she or someone else is going to pay. Fuck 'em all, but man it would have been nice to see The Bernank get pilloried.

  • anon||

    I agree, if for no other reason than Bernanke reminds me of Krugabe, and I really wouldn't mind shitting on either of their faces.

  • TheZeitgeist||

    Like heroin, monetization of debt needs an ever bigger dose for an ever shrinking high. It's why the 'recovery' has been, ahem, 'anemic' as they say.

    And when you think about it, it's pure Newspeak calling the high part of addiction 'recovery' and the (ever more severe) crash a 'crisis' needing a 'fix' via 'infusion.' The irony is, sadly, hilarious.

  • Austrian Anarchy||

    I would go with the phrase "delayed spending" rather than saving right now.

  • pan fried wylie||

    If she just reversed the neutron flux...

  • Smilin' Joe Fission||

    OT: Trying to get into hunting up her in Canada. Just looked up how to get a hunting license in Ontario, which is required to hunt here.. Another fucking 12 hour course and written exam.. What.The.Fuck. Just to go hunting. This bullshit is making me go bananas. I had to take a 13 hour course and pass a written and practical test just to be able to buy rifles (still can't buy handguns and scary military rifles).

    Anybody have any ins with nuclear utilities in the southern US? I am getting more and more sick of this shit. I gotta get outta here.

  • Rich||

    Sheesh, Joe! 8-( What does Canada require from you in order to be allowed to legally *shoot* those rifles you were finally permitted to buy?

  • Smilin' Joe Fission||

    There is a bunch of regs for shooting ranges and shooting on your own property but I doubt they are too different from the US.

    Gun stores are a rarity though. I'm almost restricted to only being able to order via Cabelas. Within the last few years the government got rid of the long gun registry though, which was at least some movement in the right direction. But I have no hope for gun laws ever getting much better up here. A lot of people think that the US is a crazy gun paradise and that people should never be allowed to own scary military weapons. I haven't met one person other than my father who disagrees with the firearm laws in the direction of more liberty.

  • anon||

    There is a bunch of regs for shooting ranges and shooting on your own property but I doubt they are too different from the US.

    Depends on the state. In NC, you're free to do what you want on your property outside of city limits. Inside the cities they get a little pissy about it.

  • Smilin' Joe Fission||

    Pretty much the same here.

  • ||

    Gun stores are a rarity though.


    Up until the early seventies there were about six gun stores on Yonge St in
    Toronto just between Dundas and Bloor (about one mile).

  • Dweebston||

    Wait, they permit scary nuclear technologies in People's Republic of Canada?

  • Smilin' Joe Fission||

    The government designed an entirely novel reactor design using natural uranium and heavy water: CANDU. Currently, 50% of Ontario's electricity is generated through nuclear fission. I don't see how CANDU continues though. Westinghouse is offering an AP1000 for cheaper upfront costs and operational costs with soon to be large amounts of operational experience to be shared once the Chinese AP1000's go online and the 4 US AP1000's go online.

  • The Rt. Hon. Serious Man, Visc||

    The government designed an entirely novel reactor design using natural uranium and heavy water: CANDU.

    Is security for CANDU provided by Dudley Do-Right?

  • Smilin' Joe Fission||

    Obviously only us proles are forbidden from operating military style firearms. Nuclear plants basically have small armies (they actually are a lot of ex-military).

  • Death Rock and Skull||

    "I don't see how CANDU continues though."

    With protectionism! "Built here to run here!"

  • Smilin' Joe Fission||

    Pretty much. Ontario Power Generation (government utility) was looking at either building two new CANDU's or two new AP1000's. Apparently the rumour around the water cooler at the industry regulator (according to my buddy who works for the regulator) is that OPG was going to go with the AP1000 for the economic benefits over the CANDU. When the Ontario Liberal government got word of this, they swooped in and cancelled the entire new build.

  • Death Rock and Skull||

    Do nuclear companies hire a lot of foreigns? You should probably just go in on an upstart brewpub or something.

  • Smilin' Joe Fission||

    I'm a US citizen so I wouldn't exactly be foreign even though I have gotten all my training and am currently living in Canada.

  • Generic Stranger||

    Another fucking 12 hour course and written exam.. What.The.Fuck. Just to go hunting.

    It's not that different down here. I think I had to take an 8 hour course and pass a written test.

    It does vary from state to state, though.

  • ||

    Florida requires a hunter safety course for anyone born on or after June 1, 1975, so eventually it will be universal.

  • mad libertarian guy||

    Just take the hunter safety course online. I did the 8 hour course in about 45 minutes, and took the exam the following day.

  • db||

    What types of units are you working with? I have a contact with a midwestern US utility that has Westinghouse, CE, and GE units. Don't know if I still have any pull with him though.

  • Austrian Anarchy||

    Of course, my Commie-assed Senator Alexander had to vote for that woman. No word yet if Corker joined him in another round of Obama sucking up.

  • Tman||

    Gawd I hate Alexander, and Corker too. Such an embarrassment to Tennesseans.

  • Austrian Anarchy||

    The biggest embarrassment is Kentucky having the best Senator in the neighborhood.

  • The Knarf Yenrab||

    The best senator in any neighborhood for about a century or so. Which says something good about the Overton window in the Old South even with all our crazy socons.

    And Kane might still run for office one of these years; Alexander has to retire or die eventually.

  • Austrian Anarchy||

    That Corker jackass voted for her nomination too.

  • Jordan||

    Congratulations, Janet. You get to be the one stuck holding the bag when Bernanke's bubble finally bursts. Not that you won't do everything in your power to keep blowing that bubble up to stratospheric proportions. Monetarist clowns gonna clown.

  • Dweebston||

    Perhaps that's the idea: just like the media can't hold the country's first black president accountable for the economic malaise his policies perpetuate, Janet Yellem's historic nomination will deflect all blame from the Fed if the economy spirals under Bernanke's policies.

  • Count Negroni||

    Has anyone caught an article/tweet/whatever indicating opponents of her/the federal reserve are sexist? Bets on how soon one hits?

  • Raven Nation||

  • RishJoMo||

    lol, US POlitics. Best politics money can buy!

    www.GetzDatAnon.tk

  • Count Negroni||

    "If you judge what’s high or low by the needs of the economy, people sometimes talk about a concept called equilibrium real rate," Yellen said. "When there’s a lot of saving and not very much investment, which is where we are now, the natural forces of the economy are pushing interest rates down. It is these forces we're trying to cope with."

    Personal savings rate is, what, 4.5%? That's high?

  • Rich||

    President Obama said, "She calls it like she sees it."

    Bets on when she sees it as "an enormous clusterfuck"?

  • db||

    Never. If she saw that, why would she have appliex for the.job? Anyone who really thinks it is as fucked as it could be is staying far away from positions of reaponsibility.

  • SIV||

    tReason cover-boy Jeff Flake votes to confirm

  • Austrian Anarchy||

    Wow, just like Alexander and Corker. Why is it Reason loves Flake so much?

  • From the Tundra||

    Past-tense. For awhile, he talked a good game and Reason swooned. Lots of positive articles and hopeful projection. Then the senate elections and, apparently, some kind of implant that turned him into McCain's Mini Me.

    Fuck him.

  • Death Rock and Skull||

    Give me a C. C. Give me a U. U. Give me a N. N...

  • Sudden||

    As long as it doesn't end with T.Y. Hilton, we're straight.

    /still angry.

  • The Rt. Hon. Serious Man, Visc||

    Hey, what's all this Yellen about?

  • Austrian Anarchy||

    She thinks the printing press is the machine gun that will end Capitalism.

  • Scruffy Nerfherder||

    I had this discussion with my brother in law the other day. Our conclusion was that collapse is inevitable at this point, we're beyond the point of no return. The only way to unravel the Gordian knot is to cut it in half.

  • ||

    You know this whole government buying government debt has worked so well we should have the government buy the government debt on the debt that it bought.

  • Rich||

    It's government debt all the way down!

  • The Knarf Yenrab||

    "Isn’t the zero lower bound in some ways also artificial?" asked [Sen. Chuck] Schumer (D-N.Y.). "Isn’t QE2 just another way to influence interest rates. If you didn’t do QE, wouldn’t interest rates be artificially high?"

    When he's not offending decent Americans and gun owners, Schumer enjoys spending his time destroying the meaning of words like artificial.

    The zero bound isn't artificial because no one is going to pay you for the honor of loaning you his money, you inbred, jazzercising nitwit.

  • JW||

    On the plus side, his rainbow bitch-titties have never been perkier.

  • Anvil||

    The official song of the Federal Reserve is "Won't Get Fooled Again" by The Who.

    "Meet the new boss, same as the old boss"

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