Treasury Secretary Janet Yellen appears to have the backing of “Big Guy” Joe Biden to stay in charge of the $25 trillion US economy.
White House officials proceed to disclaim that Yellen is about to be fired, despite persistent speculation to the contrary.
Yellen has made multiple media appearances winning a lap for her continued role in helping Sleeping Joe shape economic policy, signaling she desires to be around.
Yet the speculation continues.
Wall Street executives with White House connections tell me it will probably disappear; the query will not be if, but when the president will pull the plug on what guarantees to be a disastrous two years of policy resulting in what many economists see as a baked recession in 2023.
After all, you’ll be able to’t blame all the economy on Yellen. But she’s the best cheerleader for the economic dummy. Biden’s goal since being elected in 2020 has been to be more “transformative” (progressives love that word) than his former boss, economic progressive Barack Obama.
This meant trillions of dollars in unnecessary spending rationalized as needed as a result of the pandemic. Recall: Outlays appeared mainly in the weaker months of COVID, when the closures of corporations ended.
![Joe Biden speaks at the US-Africa Business Forum during the US-Africa Leaders' Summit in Washington DC, December 14, 2022.](https://nypost.com/wp-content/uploads/sites/2/2022/12/gaspo-7.jpg?w=1024)
Yellen oversaw Biden’s push to speed up the economy’s regulatory infrastructure at a time when post-shutdown supply chain bottlenecks began appearing and thus worsen.
Coupled with the Fed’s money printing (also advocated by Sleeping Joe and Yellen), the final result might have been predicted by anyone who took the Econ 101 (and lots of sentient beings who didn’t): Massive inflation that’s a burdensome tax on the working class.
Yellen, of course, has done greater than just Econ 101. But she has a lot of experience in government and academia (Chairwoman of the Fed, etc.) with no experience in the real world.
Inflation spiral
And it shows. It spent months downplaying the inflationary threat as transitory until proven otherwise. Ideological left-wing economists of her caliber often have a soft spot for an inflationary spiral since it normally accompanies rising and rising wages, because it does today.
![Jerome Powell departs after a press conference in Washington, D.C., December 14, 2022.](https://nypost.com/wp-content/uploads/sites/2/2022/12/gaspo-4.jpg?w=1024)
Nonetheless, history shows that wage increases never sustain with prices, resulting in stagflation as people can neither afford extras nor, increasingly, basic necessities. It will probably only be reversed through pro-growth policies (deregulation that Biden and Yellen’s men refuse to do) or if the Fed steps in, quelling the inflationary burn through higher rates of interest, lower growth and certain recession.
That is what we’re coping with now. The Fed under Jerome Powell has signaled that inflation, while declining, continues to be stubbornly high and wages haven’t kept up. There will be more rate of interest increases, irrespective of how much the markets demand the so-called. turnover. Biden has shown no inclination to desert regulation. In this scenario, there’s a high probability that we’re entering a recession; it’s just a matter of how deep the crisis will be.
Someone will need to take the blame for the economic mess that is ready to hit the nation, possibly in the new 12 months, and the bets in DC, given to Wall Street executives, are that it will be Yellen. The excellent news is that each one of its successors are a step forward in the kind of economic intelligence that is actually needed.
![Gina Raimondo talks about subsidies for semiconductor chips during a press briefing at the White House on September 6, 2022.](https://nypost.com/wp-content/uploads/sites/2/2022/12/gaspo-6.jpg?w=1024)
Yellen, as I discussed, has no practical business skills. Now compare that to the lineage of the people likely to switch her: Leading, I’m told, is Secretary of Commerce Gina Raimondo, a former successful governor of Rhode Island and an economic centrist who helped reform the state pension fund. She also worked in enterprise capital, organising a VC fund that launched enterprises in the state.
Every single day I will consider this over Yellen’s bizarre, textbook-based approach to economics.
One other top contender on the shortlist is Brian Moynihan, CEO of Bank of America, sources near the White House tell me. Bankers are hard to sell to powerful progressives like Massachusetts Senator Elizabeth Warren, who has a say in Biden’s economic appointments.
![Brian Moynihan](https://nypost.com/wp-content/uploads/sites/2/2022/12/gaspo-9.jpg?w=683)
But Moynihan took over BofA in a single of the darkest hours after the 2008 financial crisis and brought it back to health. Today, the country’s second-largest bank by assets is on a firm footing due to its regular hand over the past decade. Nice economic point in the event you expect recession in 2023.
Perhaps it’s Genesler?
The dark horse in the race for Yellen is Securities and Exchange Commission chairman Gary Gensler, a darling of the progressives. He led the investor watchdog agency into the ESG culture wars with new proposals that will force corporations to reveal how they’re reducing their carbon footprint.
![Gary Gensler testifies before the Senate Committee on Banking, Housing and Urban Affairs during a supervisory hearing at the U.S. Capitol in Washington, D.C., September 15, 2022.](https://nypost.com/wp-content/uploads/sites/2/2022/12/gaspo-11.jpg?w=1024)
He’s also arguably the worst of the three candidates, and is more likely to draw opposition from Senate Republicans and moderate Democrats, which he needs to achieve confirmation.
But his somewhat prophetic warnings about the dangers of unregulated cryptocurrencies, his experience as a banker at Goldman Sachs, and his work in various government jobs related to the economy are a plus.
One thing is needless to say: any of these three options would be a huge improvement over what now we have now.