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After introducing his foreign policy and his choice to the national security team, Biden put on his mask.
What kind of treasury secretary will Janet Yellen be?
Biden’s Yellen’s expected enrollment As his Treasury Secretary has generally met with satisfaction from across the political spectrum, accolades from business leaders and financiers as well as progressive policymakers.
Yellen served as president of the Federal Reserve during both Obama and Trump administrations and would bring decades of experience to the job as well as a reputation for seriousness and rigor. And, as our senior economics correspondent Neil irwin Writes in An analysis for upshot, “He will need every ounce of those qualities” as he seeks to drive the economy out of an epidemic-induced recession.
Neil agreed to answer some questions about Yellen and how he would likely play the role.
We live in a time of deep partisan division – which often means congressional gridlock. How much power will Yellen have as Treasury Secretary in promoting economic recovery, with or without legislative assistance?
Yellen will be able to work unilaterally as Treasury Secretary, taking a different stance than his predecessor, Steven Menuchin, about being restrictive in the design of joint Fed-Treasury lending programs. The Mnuchin Treasury has emphasized that these programs are structured in ways that limit the government’s potential pitfalls, but it has made them less effective and less attractive to businesses. Yellen Treasury would probably take a different stance.
In addition, the Yellen Treasury is marginalized in some ways for trying to explain tax and regulatory policies that help in the recovery, but Congress will need a lot of help to actually do the things that Economists are needed to help the economy think through the winter and for a period of widespread vaccine availability.
While the Fed is concerned with monetary policy – that is, the flow of money available in the economy – the Treasury Department has more to do with fiscal policy, which has to do with taxes and spending. Do we have an idea of how Yellen will approach fiscal matters?
Yellen is certainly comfortable with ambitious spending plans and high budget deficits in the near term as the nation tries to pull out of the epidemic-induced recession. And she strongly believes that the government has an important role to help the workers. But he is more concerned about the long-term budget deficit than some on the left. He has long been concerned about eligibility spending and believes public debt can weigh on the increase.
In the near term, in drafting an epidemic response, it may not matter, but in the medium term she may find herself as the voice of fiscal restraint relative to the left flank of the Democratic Party.
While the administration will change in January, Jerome Powell will remain as the Fed’s chair. What relationship does Yellen have with him, and how much will he serve as a source of continuity and continuity?
Yellen and Powell know each other very well and are a big part of mutual respect. While he was in charge of the Fed, Powell was an influential Fed governor, an associate of Yellen on most issues, and someone tasked him with overseeing the many nuts and bolts that the Fed does.
They may have some philosophical differences, but I think they will be very effective allies in trying to ensure that these various weapons of government are moving towards the same goal.
And while Powell is politically more conservative, they share a much more practical streak and in a sense that getting the right answer is more important than ideology for the American economy.
As you write in your story, the Treasury Secretary also has a lot of responsibility with foreign policy, and how the United States interacts with its trading partners. What do we know about the challenges facing Yellen, especially when it comes to the United States’ rivalry with China – and do we have any idea how she will face those challenges?
This is one of the areas where we know little about what Yellen will do. As Fed Chair, you are actually playing the second Fidel when it comes to establishing the United States’ economic relations with other major powers like China. It is indeed within the purview of the Treasury Secretary, the Secretary of State and finally the President.
Today, the relationship between the US and China is more inherently hostile than it was at the time, as it was during Yellen’s Fed Chairmanship. He will have authority over certain areas of the relationship he has never touched before, such as treasury bodies that govern whether foreign interests should be prohibited from owning foreign companies in the United States on the basis of national security. No. (This is the mechanism by which the Trump administration is forcing a division of Tektok.) Yellen knows the economic relationship with anyone, but even after covering her for a long time, I don’t know how she deals with geopolitical aspects Will contact of things.