Fed Chairman Yellen backs CBO study on minimum wage job loss

Janet Yellen, the newly-installed head of the Federal Reserve System, is exercising her political independence (she cannot be fired during her five year term as Chairman of the Fed’s Board of Governors) and telling the truth about the new minimum wage proposed by President Obama.  Joseph Lawler reports in the Examiner:

Federal Reserve Chairwoman Janet Yellen lent credence Thursday to a Congressional Budget Office study of the minimum wage that White House economists had criticized for its finding that an increase favored by President Obama would cost 500,000 jobs.

In an unusual criticism of the nonpartisan budget scorekeeper, Jason Furman, chairman of the president's Council of Economic Advisers, had responded to the CBO report by directly challenging its estimates of job losses, claiming that they "do not reflect the overall consensus view of economists."

Yellen, who held the same position Furman does under President Bill Clinton, disagreed with that assessment at a Senate Banking Committee hearing.

"CBO is as qualified as anyone to evaluate that literature," Yellen said in response to a question from Sen. Dean Heller, R-Nev. "I wouldn’t want to argue with their assessment.”

This is refreshing indeed. Furman’s statement was shocking in its dishonesty. He was pandering to the president at whose pleasure he serves. The Democrats are ginning up a campaign issue and want to pretend that raising the price of something does not cause demand to shrink. That is dishonest.

This is a very encouraging sign that the Fed Chairman will be an honest policy maker, and may pose further difficulties for the Democrat president.