Opinion: The Trumpist case for Janet Yellen

Chaos everywhere, except the economy. View in [Browser]( | Add nytdirect@nytimes.com to your address book. [The New York Times]( [The New York Times]( Thursday, October 19, 2017 [NYTimes.com/Opinion »]( [David Leonhardt] David Leonhardt Op-Ed Columnist Janet Yellen, the Federal Reserve chairwoman, will go to the White House today to interview for the job she currently holds. Her term ends early next year, and President Trump is deciding whether to reappoint her or pick someone else. When her name first appeared on the reported list of finalists, I assumed it was only for show. Trump likes to inject drama into an appointment process, as you may recall from the secretary of state [bake-off](. Including Yellen — the first woman ever to be Fed chair and originally an Obama appointee — as a finalist adds intrigue. In the end, I assumed Trump would choose a conservative man for the job, as he does for most big jobs. And he may well. But there is a strong case that Trump would be serving his own political interests by reappointing Yellen, and if we know one thing about Trump, it’s that he cares about his own interests. Think about the chaos that surrounds this administration: the Russia investigation, the struggling Cabinet secretaries, [the West Wing leaks]( the failure to pass significant legislation, the rebukes from Senate Republicans, the botched response to Hurricane Maria, the stymied Muslim ban, the nuclear tensions in North Korea and Iran and, underscoring it all, [the 38 percent approval rating](. What is the single biggest exception? The economy. It’s doing just fine. It’s not booming, but it is growing steadily, with a 4.2 percent unemployment rate. As Trump [repeatedly]( [notes]( the stock market is indeed booming. Yellen is the country’s most influential economic policy maker, and her Fed has played a major role in creating today’s economy. It has kept interest rates low, ignoring analysts — [including some of the other finalists]( — who wrongly predicted runaway inflation and urged rate hikes that would have hurt the economy and stocks. If anything, the Fed hasn’t been aggressive enough, but Yellen is easily the most aggressive of the finalists. The Yellen Fed has also functioned well, bureaucratically. It has been notably light on public dissent among the voting members of the board. It has not confused or surprised investors with sharp turns. The Times’s Binyamin Appelbaum, a shrewd Fed observer, has much more detail in a new [assessment](. I would still be somewhat surprised if Trump reappointed Yellen. The chance to fire someone appointed by Barack Obama may prove too tempting. And Yellen is more forceful on financial-market regulation, the Fed’s other main role, than most Trump administration officials. But I’ve also become persuaded that for Trump’s own sake, the savvy move would be reappointing Yellen. Almost nothing can hurt a president’s popularity the way a weak economy can, as both George Bushes and Jimmy Carter painfully learned. For the same reason, three presidents with stronger economic performance on their watch — Ronald Reagan, Bill Clinton and Obama — all chose to reappoint a Fed chairman who had originally been chosen by a previous president from the other political party. Reagan reappointed Paul Volcker. Clinton reappointed Alan Greenspan. Obama reappointed Ben Bernanke. These presidents understood that uncertainty at the Fed was a risk they didn’t need. Trump faces a very similar decision. For more on the Fed: [Sebastian Mallaby]( Alan Greenspan’s biographer, makes the case for Yellen, while [Breitbart]( echoing [The Wall Street Journal]( editorial board, makes the case against. [Prediction markets]( see Jerome Powell, a Republican on the Fed board, as the favorite (38 percent chance, as of Wednesday evening), followed by Kevin Warsh (21 percent), a Republican who previously served on the board, and Yellen (19 percent). The other finalists are apparently John Taylor, a conservative economist at Stanford, and Gary Cohn, the White House economic adviser. As [Politico]( notes, Warsh has one distinct advantage: His father-in-law is Ronald Lauder, the billionaire businessman and a longtime Trump friend. Elsewhere: [Jonathan Chait]( of New York magazine takes on yesterday’s [op-ed]( by Douglas Schoen arguing that Democrats should get closer to Wall Street: “Maybe Schoen should try to think of an example of a recent political party that has used a message of suspicion and hostility and has still managed to hold on to power? 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Op-Ed Contributor [How to Fix U.S.-Turkey Relations]( By KEMAL KIRISCI Turkey needs the United States to understand its security concerns. The United States needs Turkey to show a commitment to the rule of law. SIGN UP FOR THE VIETNAM ’67 NEWSLETTER Examining America’s long war in Southeast Asia [through the course]( of a single year. ADVERTISEMENT Letters [In Quest of Privacy in the Digital Age]( The A.C.L.U. and the Electronic Frontier Foundation call for laws and investment in technologies that protect consumers. HOW ARE WE DOING? We’d love your feedback on this newsletter. Please email thoughts and suggestions to [opinionnewsletter@nytimes.com](mailto:opinionnewsletter@nytimes.com?subject=Opinion%20Today%20Newsletter%20Feedback). 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