Aging consumer advocate Ralph Nader wrote Federal Reserve Chair Janet Yellen an open letter a few weeks ago. The letter was rather controversial, not just for its blunt criticism of the Fed’s obstinate refusal to increase interest rates, but for it’s personal tone.
In the letter, Nader said: “I think you should sit down with your Nobel Prize winning husband, economist George Akerlof, who is known to be consumer-sensitive. Together, figure out what to do for tens of millions of Americans who, with more interest income, could stimulate the economy by spending toward the necessities of life.”
Nader’s letter received a good bit if criticism from both the right and the left, with some in the progressive camp rightly accusing Nader of sexism in his approach to Yellen.
Janet Yellen is, however, no shrinking violet, and and on Monday she penned a scathing reply to Nader’s letter. That said, the content and the tone of the letter were rather predictable, and merely rehashed the politically correct narrative that eight long years of ultra-low interest rates have been “necessary” to protect the economy after the financial crisis of 2007.
It’s a sad sign of the times that a leader of our country can sit there and say without embarrassment that business is more important than people, and that she’ll continue to do whatever it takes to support business no matter how much desperate Americans suffer because of her business-first policies. Her words also make it crystal clear she stands on the side of Wall Street, not Main Street.
Yellen defends the Fed’s actions in her letter
In her letter, Yellen argues that Americans would have been worse off had the central bank not kept rates very low since 2008, and also notes she anticipates tightening policy “gradually” after liftoff.
Saying that “an overly aggressive increase in rates would at most benefit savers only temporarily,” she claims that the Fed’s seven plus years of ultra-low interest rates had protected American savers from huge hits to the value of their homes and savings accounts.
“Many of these savers undoubtedly would have lost their jobs or pensions (or faced increased burdens from supporting unemployed children and grandchildren),” if the Fed had not acted as it did, she argued in her letter.
See the full letter below.