Why Janet Yellen is a great pick for Treasury secretary
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I’m delighted my former macroeconomics professor, Janet Yellen, appears to be Biden’s choice for Treasury Secretary. It was long ago (London School of Economics, 1979-80), but her crystal-clear and dispassionate explanations of macro principles still stick in my mind today.
More relevant, of course, was her performance as chair of the Federal Reserve, which won near universal praise, both in the U.S. and abroad. As a professor, she taught that lower unemployment would lead to rising inflation—the fabled Phillips curve. But as head of the Fed, she was willing to abandon theory when the evidence for it collapsed. She cares deeply about the fate of left-behind workers and laid the groundwork for the monetary policies of her successor, Jerome Powell, that helped those workers in the years leading up to the pandemic. At Treasury, she will have a broader range of tools to both keep the economy growing and help those left behind. Teamed with Powell, they should give business and markets confidence that steady hands are on the tiller.
Separately, there’s a report out this morning from the McKinsey Global Institute shedding new light on the future of remote work. It finds that 20% of the work force in developed countries can work remotely 3-5 days a week as effectively as if they were working in an office. That suggest three to four times as many people may work from home in the future as did pre-COVID.
The effect varies by industry and country. Finance and insurance have the highest work-from-home potential (76% without any productivity loss), which is why the U.K. also ranks high (33% without productivity loss.) The U.S. comes in at 29%, while China is only 16% and India 12%.
The flip side of that story is that more than half the workforce in every country—including 61% in the U.S.—don’t have an option of working from home, because their jobs involve handling equipment, moving objects, selling, teaching, caring for others, etc. One side effect is that remote work “may increase gender disparity,” the report says, because “the female workforce in many economies is more highly concentrated in occupational clusters like healthcare, food services, and customer service.” You can read the full report here.
More news below. And check out my interview with Beyond Meat CEO Ethan Brown, who is determined to wean the world from meat. He’s making some surprising progress—including in China. You can listen on Apple or Spotify.
Apart from Yellen for Treasury, President-elect Biden is picking Antony Blinken as secretary of state, Jake Sullivan as national security advisor, Avril Haines as director of national intelligence, Alejandro Mayorkas as secretary of homeland security, Linda Thomas-Greenfield as U.S. ambassador to the U.N., and former presidential hopeful John Kerry as climate envoy. The establishment is back. CNN
And the transition is now formally going ahead, after General Services Administration chief Emily Murphy finally declared Joe Biden the apparent victor of the election, thus unlocking the resources Biden's team needs to prepare for late January. President Trump has now authorized the federal government to initiate the Biden transition. He's still challenging the election results, though, and it seems few of those who voted for him accept that he lost. Fortune
Japan violated Carlos Ghosn's rights by arresting him arbitrarily and holding him under abusive conditions, a U.N. panel has concluded. The former Renault-Nissan chief was arrested four times in 2018 and 2019 over alleged financial crimes, and according to the Working Group on Arbitrary Detention he did not enjoy the presumption of innocence that Japan is supposed to provide under international law. Fortune
Goldman in Paris
Goldman Sachs has applied to launch a trading venue, called SIGMA X Europe, in Paris. In doing so, it joins the likes of Cboe Europe and London Stock Exchange Group, which have also set up venues in EU cities so that, when Brexit Proper strikes at the end of this year, they won't lose the rights to host trading in most EU shares for clients inside the EU. Bloomberg
AROUND THE WATER COOLER
DuPont and Biden
The Wall Street Journal has an interesting piece on how the trajectory of DuPont Co., Delaware's biggest employer, influenced President-elect Biden's ideas about what's wrong with big business today: "Mr. Biden seldom publicly discusses DuPont by name, but in private, according to aides, he regularly cites its restructuring and downsizing as Exhibit A of modern capitalism gone awry. He often bemoans what he believes to be corporate America’s prioritization of investors over workers and their communities." WSJ
Doctors have urged the CDC and drugmakers to be transparent about the side effects that may come with coronavirus vaccines. They fear that if people have their first of two shots and unexpectedly experience fever or headaches or exhaustion, they may not come back for the crucial second dose. CNBC
Europe's governments may have largely staved off mass unemployment this year, but the pandemic has nonetheless exacerbated the divide in its job market between skilled and unskilled workers. The Financial Times reports: "In the first half of the year, there was a 7% contraction in low skilled jobs in the eurozone, while the number of high skilled jobs grew 3%…People who lose their jobs still need retraining for new roles being created, because there is a mismatch between the jobs being created and those destroyed by the crisis." FT
David Sullivan, professor of molecular microbiology and immunology at the Johns Hopkins Bloomberg School of Public Health, writes for Fortune that his team has had some success infusing COVID patients with plasma from people who had already come through the disease. Trials are ongoing to prove whether the convalescent plasma therapy really does work. Fortune
This edition of CEO Daily was edited by David Meyer.