"here’s a new example (HT2 DeLong). James Hamilton writes: “At the outset of the crisis, however, Ms Yellen was also one of the people who saw most clearly the magnitude of the problems facing the economy…. Her speech to the National Association for Business Economics in 2007, when reread today, strikes the reader as amazingly prescient.”
OK, it’s not hard to google that speech. Yes, she did a good job explaining the financial crisis that was already underway. She did indeed point out that the downturn in the subprime market–again, which was already occurring before everyone’s eyes–was being amplified because of derivatives that, in retrospect, the ratings agencies and other institutions hadn’t fully understood. So this was good explanation on her part, but not prediction."Come on guys. Don't give guys like Bob ammo like this! He's wrong about monetary policy. He's not stupid, so he's going to catch it :)
Prescient would be someone like the late Ned Gramlich, who I had the privilege of working with while he was a senior fellow at the Urban Institute. He too was thinking very deeply about the sub-prime crisis in 2007, just like Yellen. In fact I got to know him when I helped him out as a wee research assistant on a book on that subject.
At that point he was at the end of the career and looking back on the problems with sub-primes. But he was brow-beating Greenspan on this when he served on the Board of Governors back in 2000. That's "prescient" - perhaps even "amazingly prescient". Whether or not Yellen has that record she could still be well qualified, but if we're going to be tossing around words like that lets at least maintain a sense of proportion.