This Fed "expert" majored in French, journalism and mass communication at Iowa State University.
Her claim is that the Fed isn't influenced by politics. I'm willing to bet she got the talking points for this piece directly from a Fed PR agent because, apparently, they didn't teach Fed history in her French classes at Iowa State. Although she claims the Fed has always been as pure as the virgin snow, she has missed a few things
Here's Burton Abrams in The Journal of Economic Perspectives—Volume 20, Number 4—Fall 2006:
The fact that President Nixon pressured [Federal Resrve chairman] Arthur Burns to run an expansionary monetary policy in the run-up to the 1972 election is well-known (for example, Tufte, 1978, pp. 45–50). As another example, John Ehrlichman (1982, pp. 248 – 49) describes a meeting between Nixon and Burns on October 23, 1969, just after Burns’s nomination to the Fed had been announced.Kevin Phillips, a political and economic commentator for more than three decades and onetime Nixon strategist, reports that President Richard Nixon asked his Federal Reserve chairman, Arthur Burns, to concoct a new inflation number that would be split off from traditional headline CPI, dubbed “core” inflation—and thus make inflation look less threatening.
Richard Nixon, besides continuing the unified budget, developed his own taste for statistical improvement. He proposed albeit unsuccessfully—that the Labor Department, which prepared both seasonally adjusted and non-adjusted unemployment numbers, should just publish whichever number was lower. In a more consequential move, he asked his second Federal Reserve chairman, Arthur Burns,to develop what became an ultimately famous division between "core" inflation and headline inflation. It the Consumer Price Index was calculated by tracking a bundle of prices, so-called core inflation would simply exclude, because of "volatility," categories that happened to he troublesome: at that time, food and energy. Core inflation could he spotlighted when the headline number was embarrassing, as it was in 1973 and 1974. (The economic commentator Barry Ritholtz has joked that core inflation is better called "inflation ex-inflation"—i.e., inflation after the inflation has been excluded.)In his memoir, Arthur Burns tells us what he once told President Nixon:
I informed the President as follows : (1) that his friendship was one of the three that has counted most in my life and that I wanted to keep it if I possibly could; (2) that I took the present post [Fed chairman] to repay the debt of an immigrant boy to a nation that had given him the opportunity to develop and use his brain constructively; (3) that there was never the slightest conflict between my doing what was right for the economy and my doing what served the political interests of RN.-RW
Via The FinancialTimes:
Janet Yellen was forced to fend off new questions about the Federal Reserve’s political independence on Tuesday as a Republican lawmaker asked her if one of the central bank’s governors was too close to Hillary Clinton’s campaign.
The Fed chair was challenged by Scott Garrett, a Republican from New Jersey, over donations that Fed governor Lael Brainard has made to the Clinton campaign and over unconfirmed media reports that Ms Brainard is a contender for a senior job in a potential Clinton administration.
The exchanges came only two days after Donald Trump, the Republican presidential candidate, claimed in his debate with Mrs Clinton that the Fed has been keeping short-term interest rates low to help the Obama administration and was sustaining a “big, fat, ugly bubble” in the stock market....
After a false start and cross talk between lawmakers seeking to end Mr Garrett’s questioning, the Fed chair said: “I would have to consult my counsel. I’m not aware that that’s a conflict, but I would …” Then she was herself cut off by the committee chair.
Shortly beforehand Ms Yellen said she had “absolutely no awareness” of Ms Brainard being in touch with the Clinton camp about a job.
Pressed on $2,700 in donations that Ms Brainard has made to Mrs Clinton’s campaign, the maximum permitted for individual contributions in a primary election cycle, Ms Yellen noted that the Hatch Act does not prohibit political contributions by Fed governors...
Mr Garrett told the Fed chair: “As the saying goes, perception is reality. Whether you like it or not, the public increasingly believes that Fed independence is nothing more than a myth. The Fed has an unacceptable cosy relationship with the Obama administration and with higher ups in the Democratic party.”
Asked if she had ever asked Ms Brainard to recuse herself from monetary policymaking due to her “close involvement” with the campaign, Ms Yellen said: “She’s acting in a way that is permitted by the rules we are subject to. Each one of us has to decide for ourselves.”