Politics

Why Yellen should be the next Fed chief: Blinder

Izzy Best, CNBC News Associate
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Making the case for Yellen to take Fed reins
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Making the case for Yellen to take Fed reins

As the race for the next Federal Reserve chairman heats up, former Fed vice chairman Alan Blinder is making the case for why it should be Janet Yellen.

Blinder, who currently teaches economics at Princeton, is one of more than 300 economists who have signed a letter to President Obama urging him to choose Yellen, the current Fed vice chairwoman, over former Treasury Secretary Larry Summers.

(Read more: Wall Street wants Yellen, not Summers, as next Fed chief)

Blinder said Yellen's experience and judgment are the primary reasons he and other economists are pushing for her to succeed Ben Bernanke.

"She was one of the early members of the Federal Open Market Committee to see that this [housing crisis] was not just a financial catastrophe. This was going to really damage the real economy and the Fed ought to do something about it," Blinder said on CNBC's "Squawk Box" Wednesday.

A few months ago, Blinder wrote an op-ed in the Wall Street Journal making the case for Yellen, who he said "outside the narrow confines of economists and people who dote on central banking ... is virtually unknown."

(Read more: Summers vs. Yellen: Who are their supporters?)

In laying out her qualifications for the job, Blinder notes that she played an instrumental role in steering monetary policy "toward what was called the 'perfect soft landing' in 1996. He also notes that she led the "2-percent side" in the Fed's monetary-policy debate of whether the Fed should be targeting 2-percent inflation or zero. The Fed's policy is now 2 percent.

If appointed, Yellen would be the first woman to head the central bank.

(Read more: )

When presented with a third name that's been tossed around, Donald Kohn, who was vice chairman of the Fed during much of the financial crisis, Blinder said he would pick Kohn over Summers for the same reasons he likes Yellen — his experience.

He clarified, however, that this is not an anything-but-Summers campaign.

"You start by looking at that letter — that was not anti-Summers at all but pro-Yellen," he said.

He acknowledged that an effort like this by economists lobbying for a candidate is unprecedented.

"[I]t's very unfortunate. It's led to a situation where people like myself and two or three hundred other economists that you mentioned — that list keeps growing by the way every minute — they felt compelled to come out and take sides because it's like a campaign," Blinder said.

—By CNBC's Izzy Best.