Yesterday Barack Obama nominated Janet Yellen as the next chairman of the Federal Reserve Board, to replace Ben Bernanke next February. Yellen has been vice chair to Bernanke since 2010 and will likely win approval from the Senate.

The first important thing to realize about Yellen is her ideology and monetary views.

Now sixty-seven years old, Yellen has for decades been a left-leaning academic economist, after earning degrees from Brown (BA, 1967) and Yale (PhD, 1971), an era when Keynesian interventionist policies were held as sacrosanct.

Later she taught at Berkeley’s Haas School of Business (1980–1994), while publishing articles that never materially questioned Keynesian dogmas—such as that a free economy is prone to “failures” or “imbalances” (where aggregate demand runs short of aggregate supply); that government spending can add to output; that inflation (a decline in money’s purchasing power) results not from excessive money creation but from excessive economic growth; that money-printing can lower unemployment; that savings “leak” from spending flows and cause recessions; . . .

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