Janet Yellen must have Ralph Nader yellin’ at his assistant, am I right?
At the end of October, failed presidential candidate Nader published an open letter to Federal Reserve chair Janet Yellen as a Huffington Post blog. (Is that the most depressing sentence you’ve ever read? Same.) In the letter, Nader criticizes Yellen and the Fed for what he argues are bad monetary policies that hurt savers, and condescendingly recommends that Yellen, the first female leader of the bank, “sit down with your Nobel Prize winning husband, economist George Akerlof, who is known to be consumer-sensitive.”
“Thank you for your recent letter,” she writes. “It may help to review a few basic facts.”
In the letter, Yellen argues that low interest rates actually helped the economy majorly rebound:
Would savers have been better off if the Federal Reserve had not acted as forcefully as it did and had maintained a higher level of short-term interest rates, including rates paid to savers? I don’t believe so. Unemployment would have risen to even higher levels, home prices would have collapsed further, even more businesses and individuals would have faced bankruptcy and foreclosure, and the stock market would not have recovered. True, savers could have seen higher returns on their federally-insured deposits, but these returns would hardly have offset the more dramatic declines they would have experienced in the value of their homes and retirement accounts. Many of these savers would have lost their jobs or pensions (or faced increased burdens from supporting unemployed children and grandchildren).
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