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Fight for Fed chairmanship is a battle of the sexes

WASHINGTON — President Obama's choice of a replacement for the Federal Reserve chairman, Ben S. Bernanke, is coming down to a battle between the California girls and the Rubin boys.

Janet L. Yellen, the Fed's vice chairwoman, is one of three female friends, all former or current professors at the University of California, Berkeley, who have broken into the male-dominated business of advising presidents on economic policy. Her career has been intertwined with those of Christina D. Romer, who led Obama's Council of Economic Advisers at the beginning of his first term, and Laura D'Andrea Tyson, who held the same job under President Clinton and later served as the director of the White House economic policy committee. But no woman has climbed to the very top of the hierarchy to serve as Fed chairwoman or Treasury secretary.

Yellen's chief rival for Bernanke's job, Lawrence H. Summers, is a member of a close-knit group of men, proteges of the former Treasury Secretary Robert E. Rubin, who have dominated economic policy-making in both the Clinton and the Obama administrations. Those men, including the former Treasury Secretary Timothy F. Geithner and Gene B. Sperling, the president's chief economic policy adviser, are said to be quietly pressing Obama to nominate Summers.

The choice of a Fed chair is perhaps the single most important economic policy decision Obama will make in his second term. Bernanke's successor must lead the Fed's fractious policy-making committee in deciding how much longer and how much harder it should push to stimulate growth and seek to drive down the unemployment rate.

Yellen's selection would be a vote for continuity: She is an architect of the Fed's stimulus campaign and shares with Bernanke a low-key, collaborative style. Summers, by contrast, has said that he doubts the effectiveness of some of the Fed's efforts, and his self-assured leadership style has more in common with past chairmen like Alan Greenspan and Paul A. Volcker.

Summers' supporters dismiss the idea that gender is a factor in the decision. They say that they simply regard him as the best person for the job. They point to the fact that he has served in both of the other top economic policy positions — as Treasury secretary in the Clinton administration and as chief economic policy adviser to Obama — which makes him a known quantity who has demonstrated an ability to respond effectively to financial crises.

Yellen declined to comment through a Fed spokeswoman. Summers did not respond to a request for comment.

Summers, 58, returned to his job as an economics professor at Harvard after leaving the Obama administration, but he has visited the White House at least 14 times in the last two years. The logs record only one visit by Yellen, who is 66. That is not unusual for a top Fed official in Yellen's position — her predecessors also spent little time at the White House — but it is significant for a president who has often placed a premium on nominating people he knows.

It also suggests that the administration has not tried to groom Yellen for a promotion. Bernanke, by contrast, was plucked from his job as a Fed governor to work as chairman of President Bush's Council of Economic Advisers before being nominated as Fed chairman.

Women have held a number of top economic policy positions within the administration during Obama's tenure. In addition to Romer, Lael Brainard is currently the country's top financial diplomat, and Sylvia Mathews Burwell is the White House budget chief.

Neera Tanden, president of the Center for American Progress and a former administration official, said she saw a general problem, not a particular one. "I think there should be more women across the board, but I wouldn't select out economic policy making," she said.

For years, economic policy making has been dominated by a small, close-knit group of men who have known one another since the Clinton administration, if not before. In addition to Summers, Geithner and Sperling, the group includes Treasury Secretary Jacob J. Lew; Daniel Tarullo, a Fed governor who has taken a leading role on financial regulation; and Jason Furman, currently nominated to be the head of the Council of Economic Advisers.

Numerous current and former administration officials have described the world as cloistered. A series of women who have worked alongside those men have ended their tenures saying that they felt excluded and ignored.

"I was always officially where I should be," Romer said of her White House experience. "When there was a quick meeting on the phone, or the side meeting, that's when you felt like maybe business was being done or maybe I was being left out of things."

Similarly, Yellen clashed with Sperling during the Clinton administration, when she ran the Council of Economic Advisers and he the National Economic Council, with the two engaging in turf battles and Yellen at times feeling pushed out of important decision-making, colleagues at the time said.

Several former administration officials, who spoke about personnel policy only on the condition of anonymity, strongly disputed the idea that the White House was institutionally sexist, that Obama did not value the promotion of women or that women were excluded because of their gender.

But they acknowledged that women on the economic team had tended to hold advisory roles, rather than policy-making roles. They also said that women tended to be further to the left than the more centrist Rubinites that have generally prevailed in policy debates.

The debate about the role of gender has spilled out well beyond the White House. Richard W. Fisher, president of the Federal Reserve Bank of Dallas, said this year that if the president chose Yellen, the decision would be "driven by gender."

Her supporters counter that being a women appears to be hurting her chances.

But concerns about gender would not be determinative in the White House's mind, officials with knowledge of the process said. The president's comfort with the candidate, concerns about how well he or she would manage the Fed's powerful Open Market Committee and deal with the market and Wall Street would be most important. Not to mention the likelihood of a candidate winning Senate confirmation.

"It's an embarrassment of riches," said Jared Bernstein, a former Obama administration economist who spoke at length of the brilliance of both candidates. "He's weighing who would do the best job at a sensitive time, and the differences here are nuanced."

Fight for Fed chairmanship is a battle of the sexes 07/26/13 [Last modified: Friday, July 26, 2013 6:09pm]
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