07 January 2014

The Clinton - Yellen Team and The Long Boom of 2014-2025

It seems to me that when it comes to economics, good political leadership is part photo bombing and part policy. This could bode well for women aspiring to leadership roles, women who may well have the examples of Fed Chair and President.

Photobombing History

Sir Richard Branson has declared 2014 to be the Year of the Entrepreneur. I like that because it is one more step towards making entrepreneurship the focus of community and policy makers.

Regular readers of R World know that my book The Fourth Economy argues that we're living into an economy that will be transformed and defined by the popularization of entrepreneurship just as the last century's Information Economy was defined and transformed by the popularization of knowledge work.

To the extent that Sir Branson and laborer Davison are right, and we prove to be living during an inflection point of economic history, a time when the rate of entrepreneurial activity accelerates, any leaders in power during the next few years will essentially photo bomb good history, made to look better by association with the great results of this long boom of the early 21st century.

And then there is policy, which brings us to the potential 2017 team of Janet Yellen and Hillary Clinton

Good Policy

Janet Yellen is the first person to become Federal Reserve Chairwoman, which means she could be there to welcome Hillary Clinton to her role as the country's first female president. There are many reasons to like her. She has proven her ability to understand trends; for instance, she warned of problems in the mortgage loan market before the Big Recession. She is more focused on real unemployment than potential inflation. And her philosophy is aligned enough with Bernanke's that when she takes over on 1 February it is likely to be smooth, which should calm rather than startle financial markets.

Her monetary policy coupled with a few reforms to financial markets (that were barely eked out of Congress) should create healthy conditions for investment that funds economic expansion rather than undermine it with risk.

Assuming that (Hillary) Clinton's policies are a more evolved form of (Bill) Clinton's, and that Yellen's policies are able to help a boom rather than reverse a collapse (as Bernanke's policies had to do), it's more than plausible that they will help rather than hinder what promises to be a long boom. If so, Yellen and Clinton could become associated with one of the best economies in history.

So, whether they're merely photobombing an economy poised to emerge or helping to create it, this team might do as much to legitimize women in leadership positions as any women in [well, American at least] history.

Of course as the father of a daughter I know could do the job of any man (and as it now stands is likely to make 73% of a comparable man), I may be standing up to cheer too quickly. Neither is yet in office and the boom  has yet to look like much other than a weak recovery.

Still, how fun is it to make a prediction for the next decade that would suggest that roughly 100 years after women got the right to vote, they got it right when they're given a chance to lead?

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