Labor Inches Toward Yellen

AFL-CIO boss Richard Trumka stops just short of formally endorsing the Fed vice chair over Larry Summers.

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Richard Trumka, President of the AFL-CIO

In the matter of Janet Yellen versus Larry Summers for the Federal Reserve chair, AFL-CIO President Richard Trumka clearly prefers Yellen, though he stopped just short this morning of formally endorsing the vice chairwoman of the Fed's Board of Governors.

"History would indicate that she is for a much more balanced approach and thus a better approach than Larry is," Trumka told reporters this morning at a breakfast organized by the Christian Science Monitor. The balance Trumka referred to involves the Fed's so-called "dual-mandate," requiring the central bank to push policies promoting both maximum employment and minimal inflation. In Trumka's view, Fed chairmen have for the last 40 or so years focused on inflation at the expense of the employment side.

But he made a point of giving Summers an opportunity to win labor's support.

[See a collection of political cartoons on the economy.]

"Larry summers hasn't declared on that recently," Trumka said. "I think if he continues to say, ‘We're only going to deal with inflation,' then we would not support that because that's been corrosive to the country and bad for the economy." On the other hand, Trumka added, if Summers comes out strongly for pushing full employment and "he's sincere about that and he's honest about that, that's a whole different story."

Does Summers strike anyone as likely to make dramatic policy changes in order to curry labor's favor? Anyone? Me neither.

That's especially true because signs seem to point toward his being the current frontrunner. He is, for example, reportedly being vetted for the job while she is not. At the same time, congressional Democrats seem to like her more than they like the famously prickly former treasury secretary.

Asked if his labor union would actively fight a Summers nomination, Trumka again left his options open. "We will be involved whenever the proper time is," he said.

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