Yellen is paid by the shareholders who own the Federal Reserve... I doubt replacing her would change fed policy. The Fed and its chairman do what they do for the banks shareholders. They threatened trump with interest rate hikes. Now they did it and he is not even in office yet. I find it incredible. http://time.com/money/3516794/janet-yellen-salary-fed-staffers/ Why is Yellen paid less than her underlings? Yellen’s salary is set by Congress, but not the Fed’s senior staff. As Reuters reporter Michael Flaherty notes, the Fed’s high salaries aren’t costing taxpayers a penny since the organization is funded by returns on the securities it owns. (The Fed’s not a normal federal agency, but a kind of public/private hybrid that’s supposed to operate independently but “within” the government.) However, that hasn’t stopped calls for more transparency: This is the first time the Fed has revealed how much its top brass make, and the information provided to Reuters only included those with salaries of at least $225,000 a year despite the request asking for the names of all board members with wages above $130,810—the highest salary on the usual federal payscale. Some Republicans in Congress have called for legislation that would require the Fed to create a searchable database of all Federal Reserve employees who make more than that sum. While Yellen is almost certainly underpaid considering her responsibilities, don’t feel too bad for the Fed chair. Fed officials must disclose their wealth in ranges, and according to public records, Yellen and her husband hold assets worth somewhere between $5.3 million and $14.1 million. In an almost too-perfect twist, the news about Yellen’s pay came on morning when she spoke at a conference about growing inequality.
Time says their salaries don't cost the taxpayer a penny, but the fed profits from their security holdings are returned to the taxpayer, so their salaries are coming directly out of the pocket of the taxpayer. At least that's what it looks like to me.
the point I wished to communicate ... is that the FED is owned by its private shareholders. Yellen and the rest of the FED system are set up to follow the dictates of the shareholders and put on Kabuki for Congress and the people. I don't really worry about the FEDs profits... they are massive anyway.... their real power is the power to create trillions of dollars with a keystroke and put it into their owner/member bank's accounts on a whim without any word from Congress.
I didn't mean to discount that point you were making. I just saw what I thought was wrong with time's analysis. As far as how the fed is governed, it just seems to me that the fed is just as much a political animal as it is a creature of the banks that own it. Certain fed members, i'm talking about yellen in particular, are probably willing to take their political view into account just as much as their banking owners profits. I don't think there is anything at all that hasn't been politicized. Corp media is willing to let their profits go down the tubes to satisfy their politics. Kellogs is too. Target was too. The crazy thing is that the expected rise in rates has made the banking index the star performer for the last month. Leads all other indexes. So the fed was willing to keep a lid on bank profits for all these years to protect obongo. Here's the thing. They spent eight years of forecasting growth in the economy that exceeded what growth actually turned out to be, and at the same time the refused to raise rates. Now, today, they are trying to 'temper' growth expectations in the economy and signaling that they want to go full speed ahead to raise rates. The exact opposite of what they've done for the last eight years. This new direction will be good for bank profits, but will serve to put a lid on what trump wants to do. I have been for the fed allowing for realistic rates for these last eight years, instead of a constant zero rate policy. What I don't like is their apparent intention to make a republican admin pay for the rate rise after insulating democrats for so long. Also, as i mentioned, they were a chearleader for economic growth all those years, and now they want to talk growth down. I believe that's it's even more politics to the fed than it is bank profits.
• Former Fed Staffer Says Central Bank Is Under the Thumb of Academics (WSJ) The Federal Reserve is dominated by academics who don’t know how finance and the economy really work, according to a former Federal Reserve Bank of Dallas staffer in her new book. Danielle DiMartino Booth, an adviser to Richard Fisher when he was Dallas Fed president, says the economists who control most of the central bank’s seats of power filter their decision-making through theoretical models. That led the institution to miss the forces that created the financial crisis, and then adopt the wrong policies to put the economy back on track, she says. Ms. Booth makes her case in a book called “Fed Up: An Insider’s Take on Why the Federal Reserve Is Bad for America,” set to be published Tuesday. Her book comes as other Fed critics are pushing for more diversity at the central bank. They often focus on the dearth of women and minorities among the top officials, but some have said a broader range of educational and professional backgrounds also would widen the central bank’s perspective. Of the 17 Fed governors and regional bank presidents, 16 are white, 13 are men, and 10 have a Ph.D. in economics. Ms. Booth’s arguments echo those of her former boss, who led the Dallas Fed from 2005 to 2015, and frequently voted against the central bank’s aggressive stimulus efforts during and after the financial crisis. “If you rely entirely on theory, you are not going to conduct the right policy, because policies have consequences” that in many cases people with real-world experience are particularly well-suited to spot, Mr. Fisher said in an interview late last year. Mr. Fisher hired Ms. Booth, a former Wall Street trader turned financial journalist, to work at the Dallas Fed in 2006 on the strength of columns she had written warning about the state of the housing market and financial markets. She eventually rose to be his appointed eyes and ears on financial markets. In her book, Ms. Booth describes a tribe of slow-moving Fed economists who dismiss those without high-level academic credentials. She counts Fed Chairwoman Janet Yellen and former Fed leader Ben Bernanke among them. The Fed’s “modus operandi” is defined by “hubris and myopia,” Ms. Booth writes in an advance copy of the book. “Central bankers have invited politicians to abdicate leadership authority to an inbred society of PhD academics who are infected to their core with groupthink, or as I prefer to think of it: ‘groupstink.’” “Global systemic risk has been exponentially amplified by the Fed’s actions,” Ms. Booth writes, referring to the central bank’s policies holding interest rates very low since late 2008. “Who will pay when this credit bubble bursts? The poor and middle class, not the elites.” Fed officials have defended their crisis-era stimulus policies, saying they lowered unemployment and helped the housing market recover. Opponents feared near-zero interest rates would cause excessive inflation and dangerous market bubbles, neither of which has happened. Ms. Booth also is among the Fed critics who see a worrisome revolving door between the central bank and the financial firms it regulates. She points to New York Fed President William Dudley, a former Goldman Sachs chief economist, as an illustration of a “codependent” relationship between the central bank and markets. He and three other regional Fed bank presidents have worked for or had associations with Goldman Sachs. With this in mind, she writes, “Goldman has positioned players on the Fed’s chessboard.”