A Seven-Step Guide to help Janet Yellen find Success…


The ‘global economy’ has a new manager – Janet Yellen. Or at least she’s been nominated by the 44th president of the United States.

For various reasons, the previous 14 Federal Reserve chairmen failed to solve all the world’s problems. In some cases, new problems arose. But maybe now that a woman has been appointed…the world’s problems will be solved once and for all.

Here’s hoping Ms. Yellen starts off the Fed’s second century with an omniscient bang, eh?

Yellen is the QE candidate…keeper of the status quo…proud poster-lady of the Ph.D. standard. But she does have one leg up on her competition.

According to The Wall Street Journal, Yellen has consistently been a more accurate forecaster of doom than all her colleagues. After reviewing over 700 statements, the Journal ranked the current Fed’s 14 board members by how well they forecasted growth, inflation and labor markets. Yellen was No. 1 overall. The hapless Ben Bernanke? Well, he came in 10th.

If we’ve done our math correctly, Yellen should be 10 times more effective manning the spigot.

Even so, we’d like to give the soon-to-be chairwoman some friendly advice…

[Sound of desk drawer sliding open…editor shamelessly pulls out a copy of ‘7 Habits for Highly Successful Central Bankers’, by The Daily Reckoning.]


Janet, you’re in a hairier situation than some of your predecessors who took their place at the helm of the committee…

[Thumbs through a few pages.]

Accordingly, since you’re inheriting a pent-up crisis, you might have to go through these motions faster than others before you. Maybe even duck out before your first term ends. But let’s start from the beginning:

First, ride the wave in the good times. Take direct credit for all positive economic developments. At the same time, when faced with low growth or high unemployment, claim that monetary policy’s not a panacea. It’s important to keep a straight face while doing this (it might be hard at first, but keep trying. It gets easier. Practicing in front of a mirror helps).

Next, endear yourself to the media by holding too many press conferences. That way, they’ll give you a nifty nickname like ‘The Maestro’ or ‘The Hero’. (Here, we make our own forecast…yours will be the ever imaginative ‘Wonder Woman’…or some reference to The Rocky Horror Picture Show…depending, of course, on how the economy fares early under your direction.)

Third, locate your ‘good side’ before you accept Time magazine’s Person of the Year award. You’re going to want to frame that issue. All the while, mind you, you should be keeping one eye on the warning light.

That’s step four. After all, the economy will only go downhill the week after Time hits newsstands. You don’t want to stick around for any of that.

The fifth step, then, is to realise exactly when your policies are about to backfire (i.e., your cue to jump ship). Announce that you think the Federal Reserve is best served by someone else. Make it about ‘the economy’, not you. Then, once you’re free and clear, lay low for a year.

When it feels right, follow step six: Begin writing the book about all the ways your successors should fix the problems that arose under your guidance.

[Flips the book closed…and looks up.]

Once you finish steps one-six, step seven is easy: Collect the multimillion-dollar advance from your publisher, pop open a glass of bubbly and…(Bonus, step eight: crack a wry smile and wink at yourself in the mirror)…toast the world to a job well done.

Oh, and one more thing, Janet. Remember your Shania Twain… ‘The best part of being a woman is the prerogative to have a little fun.‘ If the Fed needs any institutional change right now, it’s to loosen the tie a little bit.


Peter Coyne
for The Daily Reckoning Australia

Join The Daily Reckoning on Google+

The Daily Reckoning
The Daily Reckoning offers an independent and critical perspective on the Australian and global investment markets. Slightly offbeat and far from institutional, The Daily Reckoning delivers you straight-forward, humorous, and useful investment insights from a world wide network of analysts, contrarians, and successful investors. Founded in 1999, The Daily Reckoning is published in 7 countries with a worldwide readership of almost 1 million people.

Leave a Reply

1 Comment on "A Seven-Step Guide to help Janet Yellen find Success…"

Notify of

Sort by:   newest | oldest | most voted
slewie the pi-rat
slewie the pi-rat
3 years 18 days ago
speaking of The Maestro, this is from yest’s FED ‘release’: … the announcement of a reduction in asset purchases at this meeting might trigger an additional, unwarranted tightening of financial conditions, perhaps because markets would read such an announcement as signaling the Committee’s willingness, notwithstanding mixed recent data, to take an initial step toward exit from its highly accommodative policy… the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market… it was noted that if the Committee did not pare back its purchases in these circumstances, it… Read more »
Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to letters@dailyreckoning.com.au