Warren Buffett wants more small-business aid, less income inequality, and a robust economic recovery. He'll be happy to have Janet Yellen as treasury secretary

• Warren Buffett is likely pleased that President-elect Joe Biden intends to appoint Janet Yellen as treasury secretary.
• The billionaire investor and Berkshire Hathaway CEO praised the former Federal Reserve chief in 2014, and will likely support her efforts to stimulate the US economy, boost employment, and combat income inequality.
• "I think that the new administration will act promptly to extend help to small businesses," Buffett said at a private event last week.
• On the other hand, Yellen criticized and slapped restrictions on Wells Fargo, one of Berkshire's oldest holdings, while serving as the Fed's boss.
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Warren Buffett may be celebrating President-elect Joe Biden's plan to appoint Janet Yellen as treasury secretary.

The famed investor and Berkshire Hathaway CEO praised Yellen soon after she took over as Federal Reserve chair in 2014.

Buffett said at Berkshire's annual shareholder meeting that year that Yellen's predecessor, Ben Bernanke, did a "masterful job" of recognizing the severity of the financial crisis and taking action to address it. "From everything I've seen about Janet Yellen, I feel the same way about her," he added.

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Assuming Yellen is confirmed as treasury secretary by the Senate, she is likely to focus on stimulating the US economy and tackling the mass unemployment caused by the coronavirus pandemic, given her background as a labor economist.

Buffett is likely to be supportive of her efforts. During a small-business event last week, he lauded the Fed for moving quickly to shore up markets when the pandemic hit in the spring, and praised Congress for offering financial aid to ailing households and businesses. He also called for the Biden administration to provide more federal aid for small businesses, as they continue to be pummeled by the pandemic.

Moreover, Yellen expressed deep concern about the scale and extent of US income inequality in 2014. She questioned whether its continued rise is compatible with the American ideal of equality of opportunity. As treasury secretary, she might push for policies to redistribute income more fairly.

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Buffett, who has pledged to donate more than 99% of his money to charitable causes, has also bemoaned the wealth gap. He proposed a more generous earned-income tax credit and higher taxes on the super rich as possible solutions earlier this year.

One point of tension between Buffett and Yellen could be her past targeting of Wells Fargo, one of Berkshire's oldest holdings.

As Fed chair, she slammed the bank's fake-accounts scandal as "egregious and unacceptable" in a news conference in 2017. She proceeded to slap an asset cap on Wells Fargo in February 2018, preventing it from expanding until it improves its governance and compliance with banking regulations.

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Buffett's company has been a Wells Fargo shareholder for more than 30 years. It owned more than 13% of the bank in 1994, and held more than 500 million shares worth north of $27 billion in 2016. However, it slashed its holding to fewer than 130 million shares, worth less than $3 billion, in the third quarter of this year.

Yellen's restrictions may well have factored into Berkshire's decision to sell the bulk of its position. However, Buffett has also criticized Wells Fargo's handling of the scandal, and now owns a far smaller stake in the bank, so he's unlikely to bear a grudge.