Since turning the White House into his new nursing home in 2021, President Joe Biden has ensured that most of the personnel at 1600 Pennsylvania Avenue have remained the same. That way he doesn’t have to learn any new names. However, should the president and Democrats wish to limit the potential damage from the anticipated red wave in the upcoming midterm elections, and perhaps increase the odds of re-election in 2024, the administration might need to open the window, let in some fresh air, and change a few of the faces associated with failure, incompetence, and mendacity. One name that would send shockwaves throughout Washington would be Treasury Secretary Janet Yellen.
Janet Yellen: The Fall Guy?
Speaking in a recent interview with CNN’s Wolf Blitzer, Yellen admitted that she was incorrect about inflation after nearly a year of rejecting its severity and then purporting that it would be “a small risk” and “not a problem.” It was not until November that she abandoned the term “transitory” and then contradicted the White House in March by forecasting inflation would be “uncomfortably high” for another year.
“I think I was wrong then about the path that inflation would take,” she told the cable news network. “As I mentioned, there have been unanticipated and large shocks to the economy that have boosted energy and food prices and supply bottlenecks that have affected our economy badly that I didn’t at the time fully understand.”
The latest White House campaign has been to convey to the American people that the Oval Office is taking the necessary steps to combat four-decade-high inflation, including clean energy tax credits, reducing export and transport fees, and relying on an independent Federal Reserve.
Still, with $9 trillion pumped into the US economy and the supply side of the equation in a substantial rut, price inflation continues to be stubbornly high and, according to Fed Chair Jerome Powell, “more persistent” than initial projections. The May inflation report will be released on June 10, and economists anticipate that it will remain unchanged at 8.3%, a 40-year high.
But while terminating Yellen would not do much to resolve the cost-of-living crisis, placing a pink slip on her desk would send a message to the public that she has failed in her powerful position and that it is time to appoint a secretary that will get serious.
Yellen About Her Track Record
The former head of the US central bank’s disastrous inflation estimates have been well documented. But what about her other comments and actions since being tapped by Biden to helm the Treasury Department?
One of the more questionable proposals presented by Biden and the Democrats is the tax on unrealized capital gains. This is essentially penalizing investors for money they have yet to make. But, according to Yellen, the profits sitting in brokerage accounts that have yet to be realized are income. As a result, they should be taxed and transferred to the cash-strapped federal government. Of course, this is another money grab by Washington, when it should be more fiscally responsible with the trillions of dollars Uncle Sam currently receives.
Late last year, Yellen spearheaded the international push to install a minimum global tax rate of 15% on corporations to prevent large companies from shopping around for better percentages and forcing the world to engage in a “race to the bottom.”
Perhaps one of her biggest blunders to date was overseeing an astronomical wealth transfer from Main Street to Wall Street. Thanks to her support for the president’s economic agenda that consisted of multi-trillion-dollar stimulus and relief packages, which significantly contributed to today’s inflationary crisis, the rich got richer and the impecunious and the middle-class bore the brunt of public policy mismanagement.
Indeed, maybe Yellen will reveal in a memoir that she did not believe in anything the president and his team proposed, but she wanted to advance progressive goodies. Who knows? That said, for someone who has been entrenched in economics her entire life, one might deduce that she should have known better. In fact, the entire economic team, from National Economic Council (NEC) Director Brian Deese to Chair of the Council of Economic Advisors Cecilia Rouse, should have known better and done better. Even folks who have not taken a single Econ 101 class understand that the government should not inject the economy with trillions of dollars amid a pandemic-induced lockdown when businesses were not producing and the supply chain crisis was intensifying. When more dollars chase fewer goods, prices skyrocket.
In Government We Don’t Trust
Here are the explanations from the White House: Inflation would not transpire. Inflation would rise a little bit for a short period. Inflation would be hot but temporary. Inflation is the fault of supermarkets, mom-and-pop gasoline stations, and Russian President Vladimir Putin. Is it any wonder why there is widespread distrust of the government?
When politicians on either side of the aisle tell the citizenry that it is sunny outside, but it is clearly raining, everyone should carry an umbrella. Anyone who eats, lives under a roof, or wears clothing has seen the cost of living spiral out of control, yet Biden insists that enormous deficit-financed spending was not the cause and the era of high prices would fade to black. Yellen was a peddler of these lies, but she was only one of many parties acquiescing to this hidden tax. Like what legendary private detective Philip Marlowe said in The Long Goodbye: “I knew one thing: As soon as anyone said you didn’t need a gun, you’d better take one along that worked.”
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