The News Radar

Timely links to external news and articles, usually valuation related, with occasional commentary.


Originally posted Wednesday, 15 June 2022
Janet Yellen Is Struggling at the Treasury Job She Never Wanted

Great piece from Saleha Mohsin today, but an absolute blunder by whichever editor came up with the headline for it.

Janet Yellen’s stint as Treasury secretary threatens to become a stain on a storied career.

On May 31, Yellen took matters into her own hands and did something that caught the White House by surprise. She admitted to the American public on CNN that she “was wrong” about the path inflation would take. The administration had thus far been relentlessly trying to paint the surge in consumer prices as temporary.

With her statement, Yellen broke ranks with Biden’s inner circle—which doesn’t include her—and exposed the dysfunction at the heart of an administration that’s botched its communications around the country’s economic problems.

...

Yellen’s most tangible accomplishment so far is the progress she has forged on an international tax agreement designed to halt a global race to the bottom on corporate tax rates, a goal that has eluded negotiators for nearly a decade.

I don't know, that sounds pretty good!

Like her former colleagues at the Fed—including Jerome Powell, who succeeded her as chair—Yellen initially characterized inflation as transitory, a byproduct of tangled supply chains and temporary shortages of essential goods such as chips used in cars.

By September 2021, her thinking had changed, and her staff shared fresh analysis with the White House, where it was largely disregarded, showing that price pressures were more widespread and more stubborn.

...

Rather than stay quiet, Yellen is now publicly contradicting some of the most powerful officials in the White House, including Biden. On June 9, she flat-out rejected their contention that corporate greed is feeding inflation. Blaming big businesses for price gouging has been one of the administration’s most consistent talking points, and the president returned to it on June 10 as he accused Exxon Mobil Corp. and other oil companies of exploiting high gasoline prices to pad their bottom line.

...

One person familiar with the matter says Yellen did express concern over the size of Biden’s first major initiative as president. Her misgivings were ignored at the White House, where aides, including Deese, argued a too-small stimulus would doom the US to a slow, grinding recovery, as happened after the financial crisis.

I don't want to quote the whole article - go read it - it's quite clear and well reported. But I very, very strongly disagree with the headline. Framing Yellen as 'struggling' makes her sound inept. Her only ineptitude in the body of the piece though is her reluctance to prioritize good political optics for the administration over sound economic policy for the country.