The Yellen era has arrived, and it is already refreshing. The visual of her, and her presence and bearing … this is Yoda as Fed chair. Diminutive, deeply wise, and all eyes.
She writes clearly and with great force, but her spoken words break a tradition going back through Greenspan to Volcker: the Fed Chair as a celebrity. Yellen’s halting and awkward cadence does not make good television, so we will see less of her. Even if she is tempted to stardom (she shows no sign), we’ll have at least four years of a lower Fed profile than we’ve seen in almost 50 years.
And that is the proper role of the central bank: somewhere between anonymous and invisible. The Fed can execute its duty to make policy adequately transparent without spending time on the grandstand. Ben Bernanke would have been much the same, but didn’t have the chance — a wild emergency brought him farther forward than he would ever have chosen, and he rose to the occasion. Let’s hope Yellen won’t have to.
Yoda as Fed chair.
Her definitive line: “I consider it imperative that we do what we can to promote a very strong recovery.” Not just sustainable recovery, not just a strong one, but imperative … very strong. She gets it. We must get GDP growing faster than debt, and we must get incomes growing faster than the inflation rate. Half won’t do.
Many have noted that Yellen is the best-qualified person ever to take the job. We know a lot about management, and about the traits of chief executives and their paths to success and failure, and no matter what their skill, their need to be a little bit lucky, and to have some black-art talent that cannot be learned.
No matter how well-qualified, she is a rookie CEO. Wish her well, be patient, and keep your fingers crossed.
To write anything now about the Affordable Care Act is unsportsmanlike. Piling on. A late hit. So write with extreme politeness and detachment.
Our president is the CEO of the executive branch. Its duty is to execute, to get things done. Suspend your feelings about President Obama’s political tilt. Grant him the difficulty of overdone Republican opposition, and of the job itself. Jack Kennedy once fairly wailed at how hard it was to get his orders followed. Set aside animosity.
Examine only performance as CEO. Obama has had two major legislative achievements: the Affordable Care Act and Dodd-Frank. All good executives know instinctively that a poor plan well-executed is better than a great plan poorly done. Every good CEO relies on staff but makes certain that information, especially bad news, flows to the top; demands constant accountability, and reaches out to find hard decisions to be made.
Our words have meaning. The more pressure we’re under, the more meaning leaks unintended.
Obama’s answer to the second question at Thursday’s presser: “I was not informed directly that the website would not be working as — the way it was supposed to. Had [sic] I been informed, I wouldn’t be going out saying, boy, this is going to be great. You know, I’m accused of a lot of things, but I don’t think I’m stupid enough to go around saying, this is going to be like shopping on Amazon or Travelocity, a week before the website opens, if I thought that it wasn’t going to work.”
Capable executives never think in the passive tense. They never, ever wait to be informed; they know that if they don’t find out — constantly, daily pressing downward for good information and results — disaster awaits. Every time.
Ahead for “Obamacare” lies more administrative chaos, and worse: Sometime next year we’ll know that the expense/income forecast is off by hundreds of billions annually.
Tie the two CEOs together. The executive deficiencies visible in “Obamacare” have under the surface for three years been at least as bad in the execution of Dodd-Frank and re-regulation of the financial system. The markers all the same: intent presumed to deliver result; disinterest in unintended consequence; incompetent and disempowered staff; and constant puzzlement at the disconnect between plan and world.
No matter how effective Yellen, she will labor beside an ineffective executive branch. Hope for her own performance and development, hope also that Obama can learn on the job. So far he shows no sign.
Lou Barnes is a mortgage broker based in Boulder, Colo. He can be reached at lbarnes@pmglending.com.
