Shelby warned in 2010 that Yellen ‘has a Keynesian bias toward inflation’

On Wednesday, President Barack Obama named Federal Reserve Board Vice Chairwoman Janet Yellen as his nominee to replace outgoing Federal Reserve Chairman Ben Bernanke. If confirmed, Yellen would be the first woman to head the Fed.

Yellen’s nomination has been met with skepticism from Republican senators, including Sen. Jeff Sessions, R-Mobile, the ranking member of the Senate Budget Committee.

Sen. Richard Shelby, R-Tuscaloosa, has not yet publicly commented on Yellen’s nomination. However, he was a vocal opponent of her’s in 2010 when she was nominated for the position she currently holds. Shelby described her at the time as a “Keynesian” with an “inflationary bias.”

Although Shelby is no longer the ranking Republican on the Senate Banking Committee on the Republican side, he remains a senior member.

Partial transcript as follows:

I also will not support President Yellen from the Federal Reserve Bank of San Francisco for the position of member and vice chair of the Board of Governors. I believe that accountability is important. President Yellen presided over a regional housing bubble and failed to restrain the excesses.

I also believe that President Yellen has a Keynesian bias toward inflation, in the unrealistic hope that inflation will increase employment. As we recover from the financial crisis, I do not want to see a Federal Reserve System with an inherent inflationary bias. With ever-growing deficits and debt, it will be tempting for the administration to inflate its way out of debt.

There are certainly a large number of qualified monetary economists available for positions on the Federal Reserve Board. I believe that the president should consider other candidates.

[UPDATED]

Shelby spokesman Jonathan Graffeo told Yellowhammer today that the senator’s position on Yellen has not changed since he opposed her previous nomination in 2010.

“Sen. Shelby has real concerns about her proclivity to print more money and her record as a bank regulator, which has been found wanting,” Graffeo saod. “However, he believes that we should let the confirmation process play out, and looks forward to discussing her record at the upcoming hearing.”

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