Janet Yellen Is Struggling at the Treasury Job She Never Wanted
bloomberg.com
bloomberg.com
> In a statement, Deese rejected the notion that she was marginalized.
> Treasury spokesperson Lily Adams says, “Secretary Yellen’s first 17 months at the Treasury have featured a series of highly consequential achievements
> Once Yellen was on board, it was her idea to freeze the Bank of Russia’s assets, rather than ban currency transactions. That proved to be an astute move
> Yellen’s standing overseas remains as high as ever
> Sullivan, Biden’s national security adviser, says her “skill and diplomacy helped us rally the world to maximize the pain on Putin’s war machine.”
Sounds to me like she's just doing her job and reporters are trying to needlessly dramatize it.
Technically and politically piloting one of the largest countries economies is a complicated job. I would expect there to be some friction and disagreements between it's stewards as they navigate one of the most complicated periods in modern history.
Inflation is at 40 year highs, gas is over $5 a gallon, and we’re on the verge of a major recession. I don’t think the article needs to go into much detail to establish that as a failure of the administration and federal reserve.
That said, I can’t actually read the article, since it’s behind a paywall.
As far as I'm aware, it's generally accepted by economists that these things are not caused by either the FED or the Biden administration, but by:
- supply-side disruption caused by the Russian invasion of Ukraine, China's zero-covid policies, and general supply chain chaos following the pandemic
- demand-side disruption caused by a strong U.S. labor market and pent-up post-pandemic spending
When you have more demand than supply, prices go up.
> on the verge of a major recession.
This _is_ caused by the FED, on purpose, to fix the inflation problem by driving down demand. The FED only controls the demand-side of the equation, so it'll be interesting to see what happens when supply-side issues start to ameliorate.
How you absolve the fed and administration of all accountability here is beyond me.
I agree that, with benefit of hindsight, there is room to nitpick the sizing of the pandemic stimulus, but remember, at the time nobody knew how long the pandemic was going to last and how deflationary the the collapse of spending was going to be.
I do think that the link between current levels of inflation and stimulus spending is weak. At best maybe _some_ of the current issues with inflation are caused by pandemic stimulus (which is already captured in my "post-pandemic pent-up demand" bullet anyways). I'll leave the verdict on that link for the economics post-docs to write about over the next decade.
> out shutting down small businesses
How did the FED or the Biden administration "shut down small businesses"? It seemed to me like the intent of the pandemic stimulus was exactly to prevent this?
Debt-to-GDP ratio skyrocketed by 30% over the pandemic, the fastest increase since the great depression. We have never taken on so much debt and given it for free to so many people.
Stimulus playing a small part in inflation? Every single person who opposed stimulus warned about this.
We can go around about what caused what but the fact is that inflation has been coming since rates dropped to 0 and there was nowhere for them to go but up.
After being in the trading community for year and years pretty much any trader will tell you it’s filled with pseudo economics and strategies that are not designed to make you smarter or earn you money but rather earn the person “selling the shovel” money. Gold bugs, perma bears, Austrian economics, and armchair experts are notably present in trading circles.
Don’t trust traders or investors on economics. Trust actual economists. I’m not an economist but I’d point to Japan as a counter example. They literally invented QE yet they could barely move the needle on inflation until the recent supply/demand shocks.
We tried to build a nation of laws, but that became too complex. Now we’re back to power and personalities. Maybe that’s for the best; I don’t know. I’ve lost track of exactly what our society is supposed to be optimizing for.
"Deese, speaking on Fox News earlier this month, called Yellen the team’s 'chief spokesperson on the economy.' Yet through Biden’s first nine months in power, Klain neglected to invite her to strategy huddles where Treasury had a stake, according to several officials familiar with the situation. That meant Yellen was unaware of some key economic messaging even if she was on the daily senior staff calls. Klain declined to comment."
This isn't news, it's gossip. There's a huge difference between professional writing and journalism. This is barely either and definitely not the latter.