Yellen should do the honorable thing and resign
Sheila Bair headed the FDIC, which insures bank deposits, through the Great Recession of 2008 and 2009. Bush 43 appointed her in 2006 and Obama kept her around until 2011, allowing her to finish her 5-year term.In 2008, Bair went public with her disagreements with Bush 43’s terrible Treasury Secretary Hank Paulson. His decision not to bail out Lehman Brothers triggered $700 billion in other bailouts. Thanks, Hank.
On Friday, Bair applauded Treasury Secretary Janet Yellen, writing, “With welcome candor, she admitted that she was, well, human, and could not have foreseen Russia’s invasion of Ukraine, multiple successive covid variants, and China’s extreme lockdown policies, all of which have exacerbated supply constraints and contributed to spiraling price increases. Instead of being applauded for her honesty, she has been pilloried by partisans and pundits eager to make her the fall gal for our inflation woes, including during Congressional oversight hearings this week.”
Of course Yellen’s been pilloried.
She was hired for her financial acumen. She was supposed to be right. She was supposed to foresee inflation and guide national policy through these shoals.
And now she offers excuses, not candor.
She said, “I think I was wrong then about the path that inflation would take. 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. But we recognize that now.”
Yellen didn’t apologize. Instead she said I was wrong but I did not know we were going to hell in a hand basket.
But the things she cited were not the root of this inflation. Overspending by the government was. And she said that spending would lead only to transitory inflation (whatever the heck that means).
Yellen should have known better.
Bair does. She wrote, “But let’s be clear. The primary driver of inflation has been a protracted period of highly accommodative monetary policy that both parties have exploited by running outsized deficits. Democrats have pushed for more spending, while Republicans have pushed for reduced taxes. As Federal Reserve Board chair from 2014 to 2018, Yellen in fact led a strategy to tighten monetary policy, raising rates five times during her tenure.”
That tight monetary policy helped keep inflation under control. President Trump left office with 1.4% inflation.
Biden didn’t just double it. He didn’t just triple it. He doubled and tripled it as inflation today is more than six times what he inherited.
Assurances from his treasury secretary that inflation was temporary accommodated Biden’s policy of destroying the middle class by wiping out its savings and wages with never-ending price increases.
One of my readers emailed me years ago about being the driver of a truck that was involved in a collision that made the late-night monologs. I think it involved molasses and feathers. My reader saw the humor but my reader also lived through the tragedy.
The truck driver-reader wrote, it was all my fault. I will have to find another occupation.
No, I assured the reader, some other company will hire you.
No, the reader corrected me, you don’t get it. No one will hire me because I cannot be insured again.
That is how important the reader’s job was.
Yellen may not have a CDL but she does have all the Ivy League credentials (Brown with two Yale degrees) and her ticket was properly punched throughout a career that spans over five decades now.
Actions have consequences. She pushed for the monetary policies that inflated prices. If Don Surber sitting in his living room in Poca, West Virginia, could see it coming in real time more than a year ago, surely given her experience, she should have.
If she saw it coming and decided inflation said nothing, then she is a cad. If she didn’t see it, she is a fool.
But either way, she should do the honorable thing and quit. Resign. Retire. Otherwise, her saying she was wrong is merely an admission of the obvious.
In fact, to some of us her ability to commit economic malpractice on a national scale without penalty and get off without even saying sorry is rubbing 11.9% food inflation in our faces.
Posted by Don Surber at 6/11/2022 03:00:00 PM