Donna Borak of CNN Money interviewed me early in February for her piece on outgoing Federal Reserve chair Janet Yellen.The piece is “Yellen’s historic legacy: Wise caution and a successful recovery,” CNN Money, February 3, 2018.
Here’s the one sentence she used, which is right at the end of the article:
“Time won’t tell,” said David Henderson, a research fellow with the Stanford University’s Hoover Institution. “Those are accomplishments.”
That’s accurate. Ms. Borak had asked me more than once if I would say, in evaluating Yellen’s time in office, that “time would tell.” I sensed that she was looking for someone to say that. But I didn’t think that about her two major accomplishments: presiding over an economy without a recession and with low and falling unemployment and keeping inflation low and steady. So after she asked me again whether time would tell, I said that on those two issues, time won’t tell. We have the evidence.
By the way, one thing I think I said is that it’s technically incorrect, as I understand the terminology, to describe the growth of the economy during Yellen’s watch as a “recovery,” as the CNN title suggests. What I learned while working as a senior economist under Council of Economic Advisers chair Martin Feldstein is that once real GDP (we used real GNP back then) has reached its old level after a recession, the terminology switches from recovery to expansion. When Yellen came along, we were well into an expansion.
READER COMMENTS
Thaomas
Feb 15 2018 at 8:12am
While I agree that Yellen did a pretty decent job, not plunging the economy into deep recession (as Bernanke’s Fed by omission did), I’d say that “time will tell” how damaging it was for the Fed under her leadership not to have demonstrated that it DOES TOO have an inflation target and not an inflation ceiling.
Tiago
Feb 15 2018 at 11:05am
Congrats to Borak for not getting the quote she wanted but still printing it. One might think that it should be obvious she should do it, but I think most often reporters don’t.
Jon Murphy
Feb 15 2018 at 2:35pm
I’m always wary of giving central planners too much credit for economic changes that occur under them. I’ll be honest and I suspect some, if not much, of this weariness comes from my libertarian biases.
So let me ask point-blank: how much credit does Yellen deserve? How much of this was her just lucking into it?
David R Henderson
Feb 15 2018 at 4:42pm
@ Tiago,
I agree that she deserves credit. My experience with reporters has been similar to what you say.
@Jon Murphy,
I’m always wary of giving central planners too much credit for economic changes that occur under them.
I am too.
I’ll be honest and I suspect some, if not much, of this weariness [sic] comes from my libertarian biases.
Ditto, although it’s a pretty good bias to start out with. I think that’s probably why I gave her as much credit as I did. I wanted to lean against my own bias.
So let me ask point-blank: how much credit does Yellen deserve? How much of this was her just lucking into it?
I don’t think there’s any way to know that and that’s where the reporter was hinting for the “time will tell.” Probably some luck, but probably some skill and knowledge, plus a calm temperament, too.
Mark
Feb 15 2018 at 8:34pm
Perhaps one can credit a central planner good economic performance inasmuch as they were generally restrained in their deployment of central planning.
But this brings up the awkward question of what constitutes’doing nothing’ for a central bank. Not changing the interest rates, or not changing the inflation rate, or not changing the money supply? Or not doing anything different from one’s predecessor?
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