Greetings from Planet Biden: Janet Yellen says the US economy is 'obviously performing exceptionally well'
Inflation is kicking back up. The dollar is falling. People are pulling money out of even big banks now and buying gold. The dollar is losing its reserve status. Discouraged workers are dropping out of the workforce. Layoffs are coming. And recession is "baked in the cake."
My current assessment of the global economy:— Steve Hanke (@steve_hanke) April 11, 2023
1. A US recession is baked in the cake.
2. China is making a comeback after ill-advised lockdowns
3. The Russian war, led by the US, has thrown a spanner in the global economic outlook
But don't tell Janet Yellen, Joe Biden's Treasury secretary.
Out on Planet Biden, the nutty professor is telling us the economy is in good shape.
Treasury Secretary Janet Yellen said the U.S. economy and America's financial system are doing well despite headwinds caused by the recent banking crisis and the Fed's efforts to tame inflation.
Yellen spoke at a press conference Tuesday to mark the beginning of the World Bank and International Monetary Fund's spring meetings and said that while there is still a chance of a credit contraction and economic downturn, she's optimistic about the trajectory of the U.S. economy.
"I've not really seen evidence at this stage suggesting a contraction in credit, although that is a possibility," Yellen said. "I believe our banking system remains strong and resilient. It has solid capital and liquidity, and the U.S. economy is obviously performing exceptionally well with continued solid job creation, inflation gradually moving down, robust consumer spending. So I'm not anticipating a downturn in the economy, although, of course, that remains a risk."
That would be news to the IMF, of course, which foresees about a 50% drop-off in economic growth in the U.S. by next year, Fox Business noted, going from the already meager 2.1% last year to 1.6% this year and 1.1% next year. Those are recession-style figures.
Not to worry, though, says Yellen. The economy is going swimmingly.
Why would she be saying such stupid stuff, given that she's nominally at least an economist and would presumably know better?
Reason one: to make Joe the Big Guy happy.
Her surreal statement comes on the heels of a spate of rumors last month suggesting that someone in the White House wanted her canned for the banking crisis she failed to forecast and resolved sloppily, in favor of a Democrat with real-world experience, such as Brian Moynihan or Gina Raimondo. Soon as that talk got going, Yellen started talking up the economy against all the evidence to the contrary.
This actually happened earlier in her career with Team Biden, when, just shortly before the midterms of 2022, she declared the economy hunky-dory. That followed another spate of rumors last September about how she was going to get canned for calling inflation "transitory" when the Fed was hiking up a storm on interest rates to battle the monster down.
Joe is running for re-election now, and Yellen is doing the same thing she did last fall: talking up the economy against all the evidence to the contrary in the name of helping Joe and his Democrats campaign for office.
What she's shilling now has all the credibility of snake oil or the Steele dossier.
This is sorry stuff. She called inflation transitory. Then she claimed she had no idea that it would spin out of control. Then, as banks teetered, she claimed that the biggest risk to the banking system was climate change, not interest rate change.
You'd think that after being wrong that many times on that many critical issues, she might be a little embarrassed for her academic reputation, might be inclined to go a little humbler, might be inclined to sit the next one out. Not in the least. She's out touting the economy as "obviously performing exceptionally well," which Joe Biden happily gaslights, and they all form an echo chamber of unreality.
These people live on another planet. But it's a recognizable one — the planet of ensuring their own permanent power. That's the only game we see here.
Yellen's not an economist, let alone a Treasury secretary. She's a mediocrity, a political hack, but she's just what Joe likes — a political campaigner. No wonder he won't fire her.
Image: Screen shot from Yahoo! Finance video via YouTube.