This is the top story from our daily newsletter published on December 2, 2020. To have this and more delivered directly to your inbox scroll down and enter your email or click here to sign up.
Top Story from the CNBC news team: “President-elect Joe Biden and his transition team announced on Monday several nominees and appointments for the incoming administration’s top economic posts. The transition team confirmed CNBC’s earlier report that former Federal Reserve Chair Janet Yellen would be Biden’s official nominee for Treasury Secretary. If confirmed by the Senate, Yellen would be the first woman to serve as the department’s leader in its 231-year history.” Here’s what both sides are saying about the Yellen appointment:
In Favor: Supporters believe Janet Yellen is a solid choice who is trusted by both Democrats and Republicans and will help spur economic growth for every income bracket. In an opinion piece for the Financial Times, Rana Foroohar says: “Janet Yellen is the right woman for the times,” [because] she is “an even-keeled, data-driven, low-ego leader, [who] enjoys the trust of progressives and many conservatives, too. She is lauded by economists of all stripes [which] will serve her well in Washington.” Foroohar focuses on Yellen’s personal beliefs “in the human impact of economics” which means the job isn’t just about “fighting inflation or monitoring the financial system. It’s about trying to help ordinary households get back on their feet and about creating a labor market where people can feel secure and work and get ahead.” Foroohar says Yellen is “the daughter of a family doctor in the working-class neighborhood of Bay Ridge, Brooklyn,” who is “the perfect person to help shape and implement Mr. Biden’s ideas about the ‘caring economy’, which seek to prioritize work in fields such as healthcare, teaching, and childcare.” Foroohar also says that Yellen will “focus more on Main Street than on Wall Street” and have power to “turn back the deregulation efforts of the Trump administration.” In conclusion, Foroohar says, “We need to move an economy based more on job and income growth than on asset price bubbles. I can’t imagine anyone better than Ms. Yellen to make that happen.”
In opposition: Detractors think Yellen’s policies will not create an economic environment that will help all income brackets. They believe lower and middle-income Americans will be left behind. In an opinion piece for the New York Post, Charles Gasparino asks: “Will a Janet Yellen-run Treasury really help average Americans?” Gasparino says questioning Yellen’s credentials “sounds like heresy given her rep not just in mainstream economic circles but in the mainstream media,” but “looking back, the Obama-Yellen recovery wasn’t much of a recovery. During her tenure from 2014 to 2017, particularly in the Obama years, Yellen was a devotee of Keynesian spending and keeping interest rates largely unchanged from the financial-crisis lows.” Gasparino says “She [also] supported Obama’s fiscal agenda — higher taxes and regulations on businesses and entrepreneurs — not pushing back against what was clearly hampering economic growth and middle-income wages.” Gasparino says, “She became a darling of the progressive left for her speech [about the] wealth gap,” but then didn’t do much about it. He says, “The stock market was roaring — but gains in wages were pretty dismal for working- and middle-class Americans and the economic recovery was the weakest in modern history.” In contrast, Gasparino says “the income gap began to reverse during the Trump years.” In conclusion, Gasparino says we can “expect Yellen to propose massive new spending [which] Wall Street traders love because you can borrow cheaply and buy stocks, which is one reason why we hit Dow 30K. But middle- and working-class savers who can’t buy stocks continue to get screwed on low-yielding investments like bank accounts.”
Flag This: In 2014, Forbes named Janet Yellen the most powerful woman in the United States. However, at the time, just 24% of Americans could correctly pick out Yellen — from a list of four — as the chair of the Federal Reserve Board, according to the Pew Research Center. “Nearly one-in-five (17%) said the head of the Fed was Alan Greenspan, who led the board from 1987 to 2006. About one-in-ten chose a Supreme Court justice, either Sonia Sotomayor (6%) or John Roberts (5%). And roughly half (48%) did not offer a guess.” Fast forward to today, one of the more interesting polls we found was how Yellen fares against some of Biden’s other cabinet picks. Citing a survey from Data for Progress, Jacobin, which is “a leading voice of the American left, offering socialist perspectives on politics, economics, and culture,” writes that “an astounding 68 percent of Americans say they want lawmakers to reject corporate executives and lobbyists if they are nominated for Joe Biden’s cabinet posts.” This includes names like Rahm Emanuel and Tony Blinken. Yellen scores much better with progressives, however. As David Sirota writes for the far-left outlet, “Yellen would be a rare treasury secretary who didn’t come straight from Wall Street, and she has supported deficit spending and tougher banking regulations, though she has also echoed some of the austerity rhetoric of groups aiming to cut Social Security and Medicare.” We highlight this progressive rhetoric because what’s fascinating is that on the other side of the spectrum, there are far-right outlets like Breitbart who rail against “establishment politicians” and Wall Street which, according to an article on November 11 “spent a fortune to unseat President Trump, [and] are getting key spots in Democrat Joe Biden’s transition team.” The takeaway is that sometimes the far-left and far-right actually agree on the exact same things, the messaging and word choice is just slightly different.