Tuesday, February 2, 2021

More Evidence of Treasury Secretary Janet Yellen as a Simple Political Lackey

Janet Yellen

Last week, during her confirmation hearing, to become Treasury Secretary, Janet Yellen told the Senate Finance Committee that analysis of states that boosted the minimum wage showed that job losses are “minimal, if anything.”

“Very minimal,” Yellen added in reply to a question by South Carolina Sen. Tim Scott

She knows better than this.

A Wall Street Journal editorial points out that during a Congressional hearing in 2014 when she was asked about Barack Obama’s proposal to raise the federal minimum wage to $10.10, she said, “I think almost all economists think that the minimum wage has two main effects.”

One, she pointed out, is increasing pay for some low-paid workers, and the second is “there would be some amount of negative impact on employment.” How much is a matter of “considerable debate,” she said, adding that she “wouldn’t argue” with the Congressional Budget Office estimate that Obama’s hike would cost 500,000 jobs.

Now, she thinks job losses would be minimal if anything, yeah right.

The Journal editorial nailed what is really going on:

Ms. Yellen no doubt feels she has to sell her new boss’s economic policies, and on Tuesday she also endorsed his gigantic Covid relief bill of $1.9 trillion. The huge increase in the federal debt held by the public, which is already about 100% of the economy and rising, is no longer of much concern to America’s political class. But the main message of Ms. Yellen’s testimony is that she is no longer speaking as an economist. She’s a politician.

The big problem with all this is that 2021 is destined to be a year with one economic storm after another. Biden has named two weak economic advisers, one at the National  Economic Council and one at the Council of Economic Advisers. They are very quickly going to be in way over their heads. 

The only individual in the room during a crisis with any sense of how the economy works will be Yellen, but if she plays the role of the spineless lackey, and yields to the ideas of Senile Joe and his political controls, the economy could be driven off a cliff to the degree that 2020 might end up looking like the roaring '20s compared to 2021. 



  1. This is why epistemology is so critical. If you get that wrong, then you get economics wrong.

    1. Attempts to control markets are doomed to fail, especially through central banking and government edict. An economy is constant flux of spontaneous interaction, where every input changes the whole. Continual feedback and recalculation is necessary. The system is not static, so solutions cannot be fixed. Fluidity, not rigidity, is key. It is misguided delusion at best and sociopathic arrogance or hubris at worst to attempt to dictate terms to a true marketplace.

  2. No one becomes treasury secretary without being a lackey.