Janet Yellen has a stellar resume. After getting her doctorate in Economics from Yale, Yellen taught in many top schools, including the London School of Economics. President Clinton nominated her to the Federal Reserve Board of Governors in 1994. After she served in that position till 1997, he appointed her chair of the Council of Economic Advisers from 1997 to 1999. President Obama appointed her vice chair of the Federal Reserve in 2010. After completing a four-year term, she was promoted to the chair of the Federal Reserve from 2014 to 2018.
Despite such an impressive list, unfortunately, she lacks direct business experience. She can't relate to the struggles of most Americans. Yellen is a team player. She plays a vital role on Biden's economic team as the go-to person for selling Pollyanna ideas to the American public.
Last year, she double-teamed with Federal Reserve Chairman Jerome Powell to promote the concept of "transitory inflation" to allay inflation fears and support Biden's push to pass a massive Build Back Better spending bill.
She is an expert in coming up with absurd ideas.
For example, she championed the global minimum tax rate for businesses where governments worldwide commit to a corporate tax rate of 15% or higher. Smaller countries offer low tax rates to entice business investment. Her proposal would end tax competition between countries. It would also not benefit consumers or businesses. The only beneficiary would be big governments who would get more revenue to fund their spending. No worries if the idea of global taxes erodes America's tax sovereignty!
Yellen has not learned from her transitory inflation debacle. Recently, she once again became a spinner for Team Biden. She threw away the traditional definition of a recession as two consecutive quarters of negative GDP growth out of the window.
She is also the architect of a proposed price cap on Russian oil, destined to fail. Never mind, China and India continued to buy Russian oil, and Russia is earning about 250 million dollars more per day in oil revenues, not less. In July, Russia ramped up oil production. Restrictions are causing pain for ordinary people in other countries, but not to the Russian regime.
The clincher came last week when Yellen became an energy expert. She went to Michigan and spoke at the Ford Rouge Electric Vehicle Center when Madam Secretary morphed into AOC.
"Our plan — powered by the Inflation Reduction Act — represents the largest investment in fighting climate change in our country's history," she told the audience. "It will put us well on our way toward a future where we depend on the wind, sun, and other clean sources of energy."
"We will rid ourselves from our current dependence on fossil fuels and the whims of autocrats like [Russian President Vladimir] Putin," Yellen added.
We have consistently criticized the "Inflation Reduction Act" as a misnomer. Even liberal ABC News anchor Jon Karl correctly referred to it as "Orwellian."
She also went on to tout how $80 billion of funding for the IRS by the Inflation Reduction Act will increase revenue by $7 trillion over the next decade, presumably by stepping up enforcement, when studies have shown that those tax collection goals are wildly optimistic. All this spending will do, is make America's most dreaded agency even bolder and hence, scarier.
Besides, how does that help Americans struggling today?
Madam Secretary is simply out of touch and has no clue what Americans are going through.
Is she aware that one out of every five Americans (21%) skip meals due to rising food prices? And another 23% rely on food banks to supplement groceries. Does she lack commonsense that such nonsense from a person in a position of responsibility is unacceptable?
Here are some facts from the latest TIPP Poll conducted as Yellen was speaking in Michigan.
- 54% are buying store brands more often
- 48% are cutting down on high-ticket items (i.e., meats)
- 40% are shopping at bargain stores
- 31% are eating less (portion sizes)
- 23% go to food banks to supplement groceries
- 22% applied and got federal or state assistance such as SNAP/WIC
- 21% are skipping meals
Interestingly, an increase in food prices did not affect 11%. It looks like Yellen was speaking to the privileged handful.
The same survey also showed that 59% of Americans think we are in a recession, which Yellen has repeatedly denied.
Mark our words. We are closing in on stagflation, a recession accompanied by an economic slowdown brought about by low workforce participation rates. If proper measures are not taken, it could peter into a depression. The Fed again announced its intention to be bold at the next FOMC, perhaps raising interest rates by 75 basis points – but the Fed cannot do it alone. On the fiscal side, profligate spending must also stop.
Janet Yellen is not the only economist in this game. In a stunning move, 17 Nobel prize winners last September wrote an "open letter" endorsing the ill-advised Biden Build Back Better (BBB) to spend nearly $6 trillion. We cringe to imagine where inflation would be today had it passed.
It is sad to see the treasury secretary in denial and spew insensitive speeches. That explains why only 31% of Americans bestow Biden's economic advisers with good grades. And why only a similar third (33%) give President Biden good grades for his handling of the economy.
Please share with anyone who would benefit from the tippinsights newsletter. Please direct them to the sign-up page at: