Cool Footnote: Janet Yellen is a Daoist
This past Saturday evening, China’s Global Times reports, Janet Yellen, the Secretary of the Treasury, ate mapo tofu in Beijing. Sichuan cuisine, we are informed, has long been a favorite of Yellen’s, dating back to when she was a professor at UC Berkeley and regularly dined at a local Sichuan eatery. (Ever since Yellen accidentally ate a psychedelic mushroom in Beijing a year ago, Chinese social media has paid enormous attention to her culinary adventures).
I am, coincidentally, planning to eat mapo tofu tonight. Even more coincidentally, Facebook informed me this morning that five years ago today I took a picture of a family of panda statues in Chengdu. The Janet Yellen panda-mapo-Berkeley-Sichuan matrix was enough, I thought, to justify publishing a cool footnote that I would use to promote what I consider to be one of the top two or three posts in the entire history of this newsletter: Tapping the Mapo Doufu Source. If you are a recent subscriber to The Cleaver and the Butterfly, I cannot recommend this opus enough. All is explained therein!
The world is not a simple place, declares mapo doufu. It is full of contradictions and contrasts and complexity. It can be overpowering, but properly constructed, it is also intoxicating. And if you understand mapo doufu, you can understand the world, because mapo doufu doesn’t just contain all tastes -- it contains all stories.
But as I mulled over whether analyzing Janet Yellen’s Chinese cuisine preferences was an appropriate way to spend a chunk of Monday morning, it occurred to me that there was one more axis to graph onto the Yellen matrix. In the fall of 2006, when I was blogging about globalization in Salon and increasingly concerned about the potential economic ramifications of the then ongoing housing market slowdown, I read some remarks delivered by Janet Yellen – then president of the San Francisco Federal Reserve Bank – to the Hong Kong Association of Northern California. The big takeaway from her speech was that, in contrast to former Fed Chair Alan Greenspan’s recent assertion that the worst of the housing bust was already behind us, Yellen reported that “her contacts” are "willing to bet that things will get worse before they get better."
Greenspan was very very wrong. Yellen was right. I followed her hints and my warnings in Salon about impending economic doom became increasingly shrill and everything went to hell. As a consequence, I spent the next six years reporting on the economy. Uh, thanks Janet.
But it gets better. In my story on Yellen’s remarks I quoted her explanation of why, at its last meeting, the Fed had declined to either raise or lower interest rates.
"You will note that I am casting my statements about the stance of policy and the outlook in very conditional terms. I do this because of the great uncertainty that surrounds these issues. Frankly, all approaches to assessing the stance of policy are inherently imprecise. Just as imprecise is our understanding of how long the lags will be between our policy actions and their impacts on the economy and inflation. This uncertainty argues, then, for policy to be responsive to the data as it emerges, especially as we get within range of the desired policy setting. The decision to pause allows us more time to observe the data so that appropriate adjustments can be made over time. For example, with the passage of time, we will gain more information on whether we have done enough to assure that inflation moves gradually lower."
At the time, I called this a way of saying “with truly exquisite precision” that “we'll see what happens next, and then do something else. Or not.” But now I interpret these comments as a marvelous demonstration of a Daoist approach to economic policy.
Because is not the sentence “Frankly, all approaches to assessing the stance of policy are inherently imprecise” just another way of saying that “the Way that is the true Way cannot be spoken”?
Is not the decision to wait for the world to tell the Fed what to do an exquisite articulation of how to perform non-action spontaneously?
Janet Yellen is a Daoist who likes Sichuan food. Who knew?
This explains much. Which is to say, either this or that.