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President Obama will nominate Janet L. Yellen to be the next head of the Federal Reserve, the White House said Tuesday. The historic appointment, if confirmed, would make the former UC Berkeley economist the first woman to lead the world’s most powerful central bank.
Yellen, the Fed’s vice chair, would replace Ben S. Bernanke, whose second four-year term as chairman expires Jan. 31. She would take over at a crucial time — the central bank is gearing up to reduce its unprecedented support for the economy without damaging the fragile recovery.

Obama will announce the nomination at the White House on Wednesday afternoon, joined by Yellen and Bernanke.

The Fed’s leadership and policy signals are being closely watched around the globe, especially in developing economies where many fear a too-rapid or poorly communicated pullback of stimulus would have severe consequences for global financial markets and the flow of capital.

The nomination was expected and culminates an unprecedented public campaign that included letters from congressional groups and extensive lobbying by economists and others in and out of Washington.
In naming Yellen, 67, a veteran central banker with a reputation as a consensus builder, Obama opted for consistency and a candidate favored by many economists and liberal Democrats. The president’s top choice, former Treasury secretary Lawrence H. Summers, withdrew from the running in September in the wake of mounting political opposition.
Unlike Summers, a close former economic advisor to Obama, the president has had few personal exchanges with Yellen and initially seemed hesitant to appoint her in what he described as one of his most important economic policy decisions of his second term.

But after Summers’ withdrawal, White House officials talked up Yellen’s prospects on Capitol Hill as they sought to ensure she would pass the sometimes acrimonious and partisan confirmation process.
With more than a third of the Senate’s 55-person Democratic caucus having signed a letter in July urging Obama to nominate Yellen, she is expected to be confirmed. The Senate unanimously backed Yellen in 2010 to become the Fed’s vice chair, and she had served on the Fed board of governors under Chairman Alan Greenspan from 1994-97 as well.
But Yellen, a Democrat who was previously a top economic advisor to President Clinton, could face resistance from Republican members who have opposed the Fed’s easy-money policies in recent years.
Yellen may also find tough questioning about her time as president of the Federal Reserve Bank of San Francisco from 2004-10, a period when she also was involved in the Fed’s monetary policy decisions. Though Yellen raised early concerns about the risks banks were taking during the sub-prime housing boom, like most economists, she did not foresee the real estate’s disastrous crash, which triggered the worst economic downturn since the Great Recession.
More recently, some have criticized Yellen as being too willing to risk an increase in inflation through aggressive monetary policy in a bid to reduce the high jobless rate. Though the focus on unemployment is popular with many Democrats, and many economists say she is right to lean that way in the current situation, Yellen has nonetheless been painted in some corners as soft on inflation, an inflation dove in Fed-speak.
In recent years, Bernanke and the Fed have been subjected to intense criticism and scrutiny over the central bank’s policies. Bernanke, a Republican, was confirmed 70 to 30 in 2010 for his second term as chairman in what was the narrowest victory margin for a Fed chief in the central bank’s history.
As the Fed’s vice chair, Yellen has been a staunch supporter of the similarly soft-spoken Bernanke as he has gone to extraordinary lengths to stimulate the tepid recovery from the Great Recession.

Under Bernanke, the Fed has kept its benchmark short-term interest rate at near zero since late 2008. The central bank’s balance sheet, or asset holdings, have quadrupled since mid-2008 to $3.7 trillion as the Fed has purchased Treasury bonds and mortgage-backed securities to pump money into the financial system.
Fed policymakers, including Yellen, had been expected to begin reducing one of the central bank’s key stimulus programs in September. But they decided that the economy, particularly the labor market, wasn’t strong enough to start tapering the $85 billion in bonds the Fed has been purchasing each month since September 2012 to lower mortgage rates and other long-term interest rates.

As well as being the first woman to lead the Fed since it was created 100 years ago, she would be the first vice chair to ascend to the top job.


Hervé Falciani is a professed whistle-blower — the Edward Snowden of banking — who has been hunted by Swiss investigators, jailed by Spaniards and claims to have been kidnapped by Israeli Mossad agents eager for a glimpse of the client data he stole while working for a major financial institution in Geneva.

“I am weak and alone,” Mr. Falciani said, as three round-the-clock bodyguards provided by the French government looked on with hard stares. The protection was needed, he insisted, because he faces constant risk as the sole key to decipher the encrypted data — five CD-ROMs containing a list of nearly 130,000 account holders that may be the biggest leak ever in the secretive world of Swiss banking.

But as he settled into a deserted bistro for a two-hour lunch, Mr. Falciani, a former computer technician who has been on the run since 2008, seemed oddly relaxed for a fugitive. And why not?

He is in high demand these days, having cast himself as a crusader against the murky world of Swiss banking and money laundering. Once dismissed by many European authorities, he and other whistle-blowers are now being courted as the region’s governments struggle to fill their coffers and to stem a populist uprising against tax evasion and corruption.

“It’s an economic war,” said Mr. Falciani, an angular man of 41 with a dark goatee who sometimes dons disguises, though on a muggy summer afternoon favored an innocuous beige tie and short-sleeved dress shirt. “In Switzerland, the banks are so organized that they are able to circumvent new rules and laws to continue to enable tax evasion.”

Critics, not least at his former employer HSBC, dismiss Mr. Falciani as a manipulator more dazzled by money than high ideals. The data he has leaked — some say sold — since 2008 has wreaked havoc within the banking world, as well as the moneyed and political classes of Europe.

Mr. Falciani’s information formed the basis for the now famous “Lagarde list” that has roiled Greek politics with its revelations of oligarchs and politicians who avoided taxes by stashing millions in Switzerland.

His data is also credited with helping Spain collect 260 million euros ($345 million) in taxes and identify more than 650 tax evaders, including the president of Banco Santander.

In 2012, Mr. Falciani passed his information to American authorities. They, in turn, used the data to pursue an investigation into whether HSBC flouted controls on money laundering, eventually forcing a $1.92 billion settlement with the bank in December.

More than a few rich and powerful people await his next move. Mr. Falciani asserts that only a small portion of the data has been decrypted and used.

Since being released from jail this year after a Spanish judge denied a Swiss extradition request, Mr. Falciani, who is married and has a young daughter, has resurfaced in France. Authorities here have offered protection in exchange for Mr. Falciani giving testimony to local prosecutors who are investigating whether HSBC helped French clients dodge taxes.

“My main objective is to help authorities develop a defense,” Mr. Falciani said.

“We are under attack and losing a lot of tax money,” he said of the Swiss banking system. “If you have enemies who want to invade, laws are not enough and you need armies to build an economic defense.”

A native of Monaco who was educated in the south of France, Mr. Falciani once worked in obscurity at HSBC. In 2005, he was promoted and transferred to Geneva. The following year, he said he raised concerns to his bosses about security flaws in the Swiss computer system that could violate the privacy of depositors.

Ignored by his superiors, Mr. Falciani said he started collecting the information methodically, in an effort to prove the system was vulnerable. The bank denies that he ever alerted them and believes that he amassed the information over a two-year period.

Early on, Mr. Falciani said he got the brushoff from German bureaucrats who weren’t interested in his trove of data. His information was also shunned in France by the previous administration when “authorities tried to make evidence disappear and they didn’t want to know,” he said.

Then the European economy slumped and governments started to take notice.

In a report from the French National Assembly issued in July, the lawmaker Christian Eckert chided authorities for being slow to use Mr. Falciani’s list. According to Mr. Eckert, the information included 127,311 clients, including 6,313 from France who were suspected of tax evasion.

HSBC dismisses Mr. Falciani’s information as flawed, insisting the small sample the bank has seen is filled with errors. At the time of his employment, the bank contends it had only 100,000 customers and that the stolen data affected only 15,000 clients.

“To our knowledge it has always been Falciani’s intention to sell the data,” David Brügger, a bank spokesman, said in an e-mail statement. “Only faced with the prospect of extradition and extended time behind bars, Falciani decided to cooperate with the Spanish authorities. A scheme he is now repeating with France and other countries.”

That theory is echoed by Georgina Mikhael, a former HSBC computer consultant who worked with Mr. Falciani in Geneva.

Ms. Mikhael says she helped Mr. Falciani develop a Hong Kong-based company, Palorva, to sell data to other banks, initially believing he obtained the information through what he called “data mining” from the Internet. She said they went to Lebanon in 2008 to sell their services to four banks. She said she grew suspicious when Mr. Falciani insisted on using a false Arabic name, Ruben Al-Chidiack, for their business dealings.

“He never gives something for free,” said Ms. Mikhael, who noted that after the Lebanon effort failed, Mr. Falciani tried to approach German and French intelligence services, usually carrying a knife in his bag because he feared the risks. “Always he is asking. He is not Robin Hood.”

Ms. Mikhael, who is currently unemployed and lives in her native Lebanon, says that she was Mr. Falciani’s mistress, believing that he planned to divorce his wife. She is now pursuing a defamation lawsuit against him in France, stemming from his contention that he was kidnapped by Mossad secret agents in Geneva who were seeking bank information about people with Hezbollah ties, including her. Ms. Mikhael says she does not have Hezbollah ties and is Christian.

Mr. Falciani disputes that he is peddling his information for cash and the claims — pressed by Ms. Mikhael — “are part of moves that people are keen to play” to harm his reputation. “’Never have I or anyone close to me asked or accepted money for information,” he said.

In 2012, Swiss authorities gave Mr. Falciani safe pass to meet in Switzerland to discuss a deal to plead guilty to data theft with a suspended sentence, provided he stopped sharing the information. Mr. Falciani said he strung them along to protect his own safety, waiting for a new government in France that might take his claims more seriously.

Now that the political tide has turned, Mr. Falciani wants to continue working with authorities.

As the investigations play out, Mr. Falciani said he was holding down a day job, working for a European Union project as a computer researcher to develop algorithms to detect abnormal behavior. But he worries about his long-term safety, wondering whether he will live another year. He notes that his house has been broken into and that his wife was recently fired from a job at a shoe store because of his notoriety

“This business represents thousands of billions of euros,” he said. “From my side, I’m frightened.”


The Bank of England have just issued a statement saying it stands by its decision to get rid of the last woman from British banknotes.

Mark Carney, the Bank of England governor, has a Herculean task ahead of him. No I’m not talking about slaying the country’s economic dragons. I refer instead to the battle he faces against a 28-year-old student.

caroline perez

Feminist campaigner Caroline Criado-Perez told me in an interview she intended to turn up at the new Bank of England governor’s office as part of her drive to get the Old Lady of Threadneedle Street to put a woman on our bank notes.

The outgoing Bank boss Sir Mervyn King has announced Sir Winston Churchill will replace social reformer Elizabeth Fry on the face of the new fivers from 2016. So apart from the Queen, there will be no women represented for their contributions to our country’s history.

Ms Criado-Perez has launched a legal challenge under the equality act, but was given the brush-off by the Bank of England a few days ago.

But that hasn’t stopped her in her tracks. “I am definitely going to be turning up at the Bank of England offices along with my petition,” she vows.

That petition has now attracted nearly 27,000 signatures, and Ms Criado-Perez is now weighing up a fresh legal assault on the Bank.

Whether she goes ahead with a full judicial review depends on whether she can build a legal fund to back it.

There’s no doubting Ms Criado-Perez’ passion on the subject though. To those who say she’s obsessing about trivialities she retorts: “It’s very easy to say that small decisions like this don’t matter but actually the culture we live in is made up of little tiny sexist acts which you can just ignore but when you think of them collectively you start to see a pattern.”

Her petition argues that this matters because of a broader sexism in society, where only one in five experts in the media is a woman, and where female directors represent less than 17 per cent of the total.

You can see her point. What justification is there for excluding from our bank notes the likes of Rosalind Franklin – the British biophysicist whose research helped discover the structure of DNA, but unlike her male colleagues her wasn’t recognised for it in her lifetime – Mary Seacole – who set up a battlefield hotel for the wounded during the Crimean War – or Mary Wollstonecraft – the writer, philosopher and women’s rights advocate? Particularly when Sir John Houblon gets his mug plastered all over them. Sir John who? I rest my case.

And yes the Queen’s a woman, but the next monarch won’t be. And she’s not there by virtue of historic achievement, but by an accident of birth.

The men on the banknotes – Charles Darwin, Adam Smith, James Watt – are there because of their contributions to Britain’s past. Many women have, against the odds, reached the pinnacle of success in their own fields too.

I called the Bank requesting an interview on the subject but they declined, pointing me instead to a response to a freedom of information request on the matter.

This makes for interesting reading. It reveals that four candidates were shortlisted for the new fiver – Churchill “together with a female character and two other male characters”. So the woman was already outnumbered three to one.

Whoever was picked also had to surmount a number of other hurdles. They had to have made “a lasting contribution which is universally recognised and has had enduring benefits”, have “broad name recognition”, “the person should not be controversial; and…there should be good artwork upon which the Bank could base its pictorial representation”.

Because of the barriers to public success faced by many women over the centuries, there would be few indeed who would meet all those criteria.

So while Mr Carney wrestles with the economic big picture, Ms Criado-Perez is right to keep banging on about minor details.


Detroit’s bankruptcy filing is designed to solve the city’s short-term financial crisis and give city leaders a bit of fiscal breathing room. But the city’s long-term prospects still look bleak.

Over the past 60 years, the city has lost more than half of its residents. As its tax base  declined, the city struggled to pay for basic city services. As service quality declined, the city became an even less appealing place to live and so more people left.

Really turning Detroit around will require some outside-the-box thinking. And there’s been some. Here are six big ideas to revitalize America’s most troubled city.

Jack Kemp, Detroit's savior? (AP)

Jack Kemp, Detroit’s savior? (AP)

And all the regulations: Jack Kemp, the former congressman and housing secretary, 1996 Republican vice-presidential nominee and 1988 presidential candidate, had an idea for America’s inner cities. He wanted to make them “enterprise zones,” where federal taxes and regulations were greatly relaxed, to spur outsiders to come and do business. That’s been tried to varying degrees, including a federal program creating “empowerment zones,” but why not go all the way? Eliminate all taxes for year-round residents of Detroit, with the federal government paying the cost of the abolition of state and local taxes. Get rid of zoning, parking requirements, occupational licensing and other cumbersome regulations while you’re at it. See how many businesses come.

2. Make it into a tax shelter

Sort of like the Caymans. (Roger Wollstadt/Creative Commons)

Sort of like the Caymans. (Roger Wollstadt/Creative Commons)

Delaware’s strategy of structuring its corporate tax code to favor corporate headquarters has brought billions of dollars of investment into the state. It’s possible to do that with catastrophic insurance reserves, as a former insurance commissioner once proposed for the District. They’re currently taxed as income in the United States, so tens of billions of dollars are sitting in bank accounts in Bermuda and the Cayman Islands. If the federal government allowed Detroit to host that money at a much-reduced rate, it could create a small but significant financial industry to manage it.

3. Create a Detroit Visa

(bigstockphoto)

(bigstockphoto)

What Detroit needs, more than anything else, is to replace the million people it lost over the past six decades. The easiest way to do that would be to import them. Most Americans don’t want to live in Detroit. But as Matt Yglesias has noted, there are about 165 million foreigners would like to become Americans. Presumably some of them would be willing to live in Detroit if that’s what it took to get a green card.

The proposal would work like this: Immigrants would get a visa that would be good for five years, during which they’d be required to maintain residence within the city limits. After that, immigrants would get normal green cards and could live where they liked. But hopefully, as they put down roots and Detroit as a whole prospered, many would choose to stay.

It might seem like these new Detroiters would have trouble finding work, but population growth tends to create job opportunities. Immigrants tend to be highly entrepreneurial; some of them would not only create jobs for other immigrants, but for some native-born Americans too.

4. Go vegan

Save pigs, save money? (People for the Ethical Treatment of Animals Facebook page)

Save pigs, save money? (People for the Ethical Treatment of Animals Facebook page)

The People for the Ethical Treatment of Animals have a proposal, too. They say they’ll give the city $100,000 to make all meals in government buildings — mostly schools, hospitals and jails — meat free. As if that weren’t enough, they’ll also plaster trash and fire trucks with vegan-boosting advertisements, supporting a strapped public transit system. PETA President Ingrid Newkirk notes that vegans are less prone to obesity, which would lower health-care costs. And think of the chickens! “I don’t know if you know, but twenty thousand chickens an hour being killed for Detroit,” Newkirk says. “So if we could make all government workers try a vegan diet, that’s a lot of chickens not having their throats cut.”

5. Move federal workers to Detroit

The federal buildings in DC are ugly. We can do better. (Photo by NCinDC)

The federal buildings in D.C. are ugly. We can do better. (Photo by NCinDC)

Another way to increase Detroit’s population would be to move federal workers to the city. There’s a precedent for this: the U.S. Patent and Trademark Office opened a satellite office in Detroit last year.

The feds could do this on a larger scale. There are about 2.7 million federal civilian workers. If 10 percent of them moved to Detroit over the next decade, that would be an extra quarter-million people. Many workers would bring their families with them, and their spending would create additional jobs in the city.

Federal agencies could open satellite offices in Detroit and require most new federal workers to work there. Existing workers could be offered financial incentives to relocate voluntarily. Detroit’s extremely low cost of living would be an added draw. And not only would this help to save Detroit, but the federal government would save money on office space.

6. Give Detroit to Canada

President Obama and Canadian Prime Minister Stephen Harper (Charles Dharapak/Associated Press)

President Obama and Canadian Prime Minister Stephen Harper (Charles Dharapak/Associated Press)

Detroit is one of the few parts of the United States (other than Alaska) that’s actually north of Canada: The city of Windsor, Ontario, lies south of it. So why not make this Canada’s  problem? Much of the city’s fiscal problems boil down to retiree benefits. For example, it has $5.7 billion in unfunded retiree benefits and $3.5 billion in unfunded pensions. Luckily, Canada has a single-payer health-care system and not one but two publicly funded pension systems. Let those pay off the debt!

Canada’s provinces do more for municipalities than our states do for cities. Toronto gets 19 percent of its budget from the Ontario and Canadian federal governments. That’s much more than U.S. cities typically get. Ontario’s generally in better shape than Michigan, which is good news for tax money going to Detroit. Toronto and Ottawa are better cities to have helping you out than, say, Flint.

via Ezra Klein at wonkblog


Facebook boss Sheryl Sandberg – one of the world’s most powerful women – shares her secret of career success. Don’t hold back or sell yourself short, she says. Does her advice ring true?

Sheryl Sandberg (reuters)

Sheryl Sandberg is the tenth most powerful business woman in the world, according to Forbes, with a net worth of some £530 million, and she’s adamant that she didn’t get where she is today without a healthy dose of assertiveness, determination and ambition.

In her book, Lean in: women, work and the will to lead, Sandberg addresses the dearth of women in leadership roles and investigate just what is holding them back. Her answer: not just extermal, structural problems, but internal obstacles which she says won’t fall down unless women themselves start pushing.

In short, what is holding women back is a thousand small decisions: failing to stand up for yourself when it matters, deferring to others first, being too modest about successes, deliberately holding back because of future plans to have a family.

“A truly equal world would be one where women ran half our countries and men ran half our homes”, she declares: and the reason why this is not so, she believes, cannot simply be blamed on the patriarchal establishment.

Using stories gleaned from her similarly high-flying friends and celebrity acquaintances (there is a lot of name dropping scattered through the book), as well as her own experience, Sandberg offers a solution. Don’t hold back, but commit wholeheartedly to your future success.

A truly equal world would be one where women ran half our countries and men ran half our homes.Sheryl Sandberg

There are practicalities here too, a nod to those struggling to balance career and family life. Getting things done, she counsels, is better than trying to be perfect. Setting obtainable goals is crucial, although “dreaming is not doing”.

There is also advice on negotiating skills, and dealing with criticism wisely: charting that path to success, Sandberg warns, is like “trying to cross a minefield backward in high heels”.

To help chart that tricky course, she has set up a website encouraging women to set up their own “lean in” groups, along with videos and other resources. Jessica Bennett, from New York magazine went to one such group and was impressed.

Feel the fear and do it anyway

“She has labelled a solution for problems that are rampant among a generation raised to believe that we were on level footing – and a pragmatic approach to change it.”

Anne Marie Slaughter, who served as director of policy planning for Hillary Clinton, sparked a fierce controversy over the role of women in the workplace with her Atlantic article declaring “why women still can’t have it all”. She stepped back from her own leadership role because of her family: yet she has been equally complimentary, calling Sandberg a “feminist champion”.

But some of her critics have complained that her highly selective, unashamedly elite experience offers no help whatsoever to those who are less well off, single parents, less well educated, non-white? Women who lack the luxury of making choices?

At least, say supporters, the Facebook executive is trying to offer a partial solution to a compelling problem. In the United States, research shows that just 21 of the top Fortune 500 jobs are held by women.

Women still earn just 77 cents for every dollar earned by a man, despite President Obama’s renewed push for equal pay. In these recessionary times of unemployment and downsizing, women’s participation in the US workforce is starting to decline.

In the UK, the picture is depressingly similar. A report into women in top management positions commissioned by the Government, did reveal this week that the number of women on the boards of FTSE 100 companies is now at a record high: up from 12.5% in 2011 to 18% today.

Decades away from equality

And outside that blue chip elite, the picture is even less rosy: the workplace is still “decades away” from equality.

And as for juggling that family with a high-flying career: that is no easier, either, according to a study of 2,000 women carried out by the Association of Accounting Technicians this week.

They found the overwhelming majority of new mothers feel they haven’t got enough confidence to return to work after maternity leave. Two thirds said they felt drained of self belief, while more than half thought they were no longer capable enough after taking time off. Instead they felt trapped by the drudge work of home life, robbing them of the space for creativity and ambition at work.

Just because routines and priorities change once women have a family, said the AAT, “doesn’t neccessarily mean that one’s career should be negatively affected or sacrificed”.

And that, in essence, is Sandberg’s argument. Stop being afraid. Do it anyway. Don’t shape yourself to fit around the world: make it bend around you.

As for the very real structural, historical barriers that still hold back women’s advancement, the “million cracks” in the glass ceiling that prevented even Hillary Clinton from fulfilling her presidential ambitions, first time round at least – that is not something that finds a solution here.

Men too need a manifesto for change: this burden is not simply on womens’ shoulders. The real struggle for equality is far wider than the Sandberg white, educated, wealthy elite, and it is a struggle which they cannot win on their own.