Lunchtime Must-Read: Nathaniel Popper: As 2008 Crisis Loomed, Yellen Made Wry and Forceful Calls for Action

Nathaniel Popper: As 2008 Crisis Loomed, Yellen Made Wry and Forceful Calls for Action: “Janet L. Yellen was not even a full voting member of the Federal Reserve’s policy-making committee, but she was not shy about admonishing her colleagues for not acting faster.

“We need to do much more and the sooner the better,” Ms. Yellen said at a two-day meeting in late October…. After months in which some members of the Fed committee resisted taking steps to prop up the economy, Ms. Yellen lectured her colleagues: “Frankly, it is time for all hands on deck when it comes to our policy tools.”… What the transcripts show is a woman who was constantly pushing her peers — and also cleverly cajoling them — to do more to help ordinary households, not just financial institutions. At the same time, she urged her colleagues to look at the flaws in the banks that caused the crisis in the first place. “I don’t believe in gradualism in circumstances like these,” Ms. Yellen said in March 2008, months before the situation came to a boil…. At the end of October, the head of the regional Fed bank in Dallas, Richard W. Fisher, a member of the central bank known for his advocacy of higher interest rates, said that for one of the few times, he was following Ms. Yellen’s lead. “I will conclude with actually once again agreeing with President Yellen, as I think I have done twice in history,” Mr. Fisher said…. But even as the committee agreed to take ever more extraordinary actions, Ms. Yellen voiced her steady disappointment that her colleagues were not doing more to help the economy. “Historical precedents, such as the case of Japan, teach us that it is a mistake to act cautiously as the economy unravels,” she said in late October.