Treasury Secretary Janet Yellen’s fall: Not unlike the economy’s

How the mighty have fallen. Janet Yellen was once considered a talented technocrat and professor, with many prestigious universities listed on her resume.

But like many Americans today, Yellen has been through hard times. Despite her title as Treasury Secretary, she has been reduced to playing Orwellian puns for the Biden administration, illustrating her descent into political mouthpieces.

Take inflation. Despite a myriad of warning signs month after month, Yellen insisted it was “temporary,” a word amorphous enough to take on any meaning the White House wanted. But as the inflation rate marched steadily higher, it became clear that inflation was only going to get higher. At this point, Yellen gave up the “temporary” and began blaming inflation on excuses as fluent as “unforeseen and large shocks.”

Janet Yellen testifying before Congress

Treasury Secretary Janet Yellen testifies before the House Ways and Means Committee on Capitol Hill in Washington on June 8, 2022. (AP Photo/Jose Luis Magana, File/AP Newsroom)

As inflation gathered momentum and then spiraled out of control, Yellen focused on immutable traits like race and gender — firmly outside a Treasury Secretary’s wheelhouse. From appointing the Treasury Department’s first adviser on racial justice to lecturing on systemic racism, Yellen has been more concerned with meaningless whims than doing her job.

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Her obsession with immutable traits and minority status is particularly tongue-in-cheek with inflation running amok under her watch. Inflation hits low-income workers, who are disproportionately minorities, hardest. Contrary to Yellen’s claims, inequality was falling before the pandemic, but real wage gains for low-income workers have now been reversed by higher prices.

But the weasel puns don’t end there.

Despite President Biden's insistence there is no recession, economic data released on Thursday suggests the economy has suffered a second straight quarter of downturn.

After the US economy contracted in the second quarter, a sign the economy was in recession, President Biden continued to insist there was no recession. (AP Photo/Andrew Harnik/AP Newsroom)

As the economy slipped into recession and contracted in the first half of this year, Yellen’s focus wasn’t on fixing the problem, instead joining a White House chorus that redefined the word “recession” to coincidentally mean the current one avoid economic malaise.

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But Yellen and other White House officials, as well as the media in general, have always understood the technical definition of a recession as two consecutive quarters of negative economic growth. Even White House economic adviser Brian Deese has previously acknowledged this. This is also how the AP defined recession when it reported on the economic downturn in France in 2013. Apparently it’s only a recession if it comes from a certain region in France; otherwise it’s just a shrinking economic catastrophe.

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Not to be deterred, Yellen insists the economic outlook is good and excuses negative data by saying the economy is “in transition” like the Titanic was transformed into a submarine. Here are the facts: Real wages are falling, home affordability and savings have collapsed, inflation is embedded in the economy, and household debt has exploded. Quite the transition!

But Yellen’s recent claims about the ironically named Anti-Inflation Act are smashing. Their statements sound like proclamations straight out of Orwell’s Ministry of Truth.

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Yellen claims that “honest” taxpayers shouldn’t fear that the IRS will hire an army of auditors to prosecute them. Does that include those who have made honest mistakes in filing their returns under tens of millions of pages of tax code that even tax experts regularly argue about?

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Yellen successfully muddied the waters with another nebulous statement, saying those making less than $400,000 a year will have the same audit rates as they have in “last few years.” If Yellen’s use of “recently” is similar to her use of “temporarily,” then she may be referring to a century ago.

The nation should expect more than that from its Treasury Secretary, and far more from someone as intelligent, competent and well-read as Janet Yellen. Unfortunately, she is living proof that when financial ability is subjected to ideology, even talent falls from grace, and no amount of Orwellian pun can offer redemption.

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