Ahead of Thursday’s vote, a look at Fed Chairman nominee Janet Yellen

On Thursday, November 21, the Senate Banking Committee will take a vote on whether or not Janet Yellen, President Barack Obama's nominee to succeed Federal Reserve Chairman Ben Bernanke, will in fact get one step closer to taking over as head of the nation's central bank on January 31. And with Democrats having a two-person majority on the committee, it appears as though Yellen will have no problem strolling into the history books as the first female Fed Chairman.

But will Yellen's appointment at the top of the Federal Reserve really be viewed as a change of leadership among members of Congress and even the American public? Or will it instead simply be the installment of what some critics view as a puppet for Democratic leadership to manipulate to expand the government's role over the free market?

In a meeting before the banking committee last week, the 67-year-old economist and Vice Chair of the Board of Governors of the Federal Reserve System enjoyed a congenial line of questioning that seemed to play up her vague qualifications rather than actually remark on her merit to take such a significant post.

The only time questioning came close to being contentious during the meeting was when Senators turned the focus on the Fed's actions to steer the national economy in a better direction, starting in 2008 when the nation was in the midst of the Great Recession. Specifically, Yellen was asked to give her opinions of the bank's controversial bond-purchasing program – also known as quantitative easing – as well as actions taken to keep interest rates near zero ever since. 

The main criticism of this activity came from Senators who had feared that the programs may be having an effect on Wall Street but are doing almost nothing to help the average American. Some are suggesting that all quantitative easing has accomplished is to give traders more resources to inflate the stock market and send prices rallying.

Since these measures were put in place, the Dow Jones Industrial Average and S&P 500 have been breaking benchmarks continually. On Monday, November 18, the Dow broke 16,000 for the first time and has continued trading above this level since. However, the health of the stock market has not yet crossed over into other areas of the national economy that have yet to bounce back to pre-recession levels.

Instead of addressing these concerns, Yellen was allowed by the Democrat-led committee to defend the actions of the Fed, pledging to continue stimulus programs like quantitative easing until this band-aid approach is no longer necessary.

Yellen also defended the stock market, claiming that the record highs that are seemingly breached on a daily basis shouldn't be viewed as a bubble but real recovery. It was such extraordinary market behavior like this, however, that many say lent false confidence to investors in the years preceding the Great Recession.

Regardless of any criticism, Yellen is still poised to take the coveted title of Fed chairman on January 31, but political observers must note that Yellen – a longtime Fed insider – was not the president's first choice to succeed Bernanke. Obama had actually had his sights set on former Harvard president Larry Summers to take over the gig when Bernanke decided he would retire the role.

Having been a close advisor, not to mention a former colleague, of the president, Summers would have likely been a key strategic ally in the Fed that would crusade for Obama's agenda. However, a controversial financial track record and even criticisms from fellow Congressional Democrats forced Summers out of consideration, and Yellen, it was determined, was a more electable candidate who still embraced Obama's big-government ideals.

Whether or not the current Wall Street rallying is a fluke or not remains to be seen, but if you fear that your retirement may be at stake, look into wealth preservation as soon as possible to protect your assets.