The Yellen Era.

• Author: Lindsey, Lawrence B.

A review of Empathy Economics: Janet Yellen's Remarkable Rise to Power and Her Drive to Spread Prosperity to All by Owen Ullmann, Public Affairs, 2022.

There are few individuals with a more illustrious career in public policymaking than Janet Yellen. She is the only individual in American history to have served as Chair of the President's Council of Economic Advisers, Chair of the Federal Reserve, and Secretary of the Treasury. That speaks well of both her scholarly intellect and her talent in navigating Washington's political currents. As the title Empathy Economics indicates, Yellen did all this while maintaining a good deal of the original idealism with which she embarked on a career in government. That makes her story even more unique.

Owen Ullmann sketches out the path Yellen followed in a way only a man of his long years covering the Washington policymaking scene could. Ullmann can take somewhat arcane economic points and describe them in a way the lay reader not only understands but finds interesting.

In the interest of full disclosure, I have known both Yellen and Ullmann for at least three decades and my name pops up several times in his biography of her. Even stranger for Washington, we have always been on good terms despite being on opposite sides of the political aisle and, in Ullmann's case, on opposite sides of that chasm between officials and journalists! Despite these apparent conflicts, the editors of The International Economy apparently had faith that none of that would stand in the way of my candor.

Yellen's career in Washington spans the decades that the economics profession rather immodestly came to call the "Great Moderation." In many ways, her career epitomizes the Zeitgeist of the period that runs from the fall of the Berlin Wall to the present. During that time, inflation fell to a low and stable rate that developed into the Fed's 2 percent target. There were recessions, but jobs were generally quite abundant. Whereas only 55-56 percent of the working-age population was employed before the Great Moderation, it was more typically 62-63 percent during most of it.

The economics profession had achieved an outstanding result: low inflation and high employment! This celebrated success contributed to a political moderation within the profession, sometimes called the "neoclassical synthesis," in which all could claim credit. The previously right-of-center view highlighting advantages for economic optimization through...