Washington — Janet L. Yellen is expected to be appointed Secretary of the Treasury, and the former Federal Reserve Chairman is an increasingly central body of power, with President Joseph R. Biden, Jr.’s economy and It will play an important role in overseeing the national security agenda. ..
Yellen’s view of monetary policy has been well known since he was leading the central bank, but her view of various issues that are part of the Treasury’s portfolio is less well known.
As Treasury Secretary, Mr. Yeren will be the chief economic diplomat of the Biden administration and will face the challenge of re-engagement with US allies postponed by President Trump’s “America’s first” economic policy. She is probably a key figure in negotiations with China, and will have considerable opinion on trade policy, along with the use of US sanctions on countries such as Iran and North Korea.
Domestically, Mr Yellen will be the driving force behind the Biden administration’s tax policy. It plays an important role given that Biden has put tax increases on wealthy Americans and businesses at the heart of the campaign. Jellen also has the opportunity to fine-tune regulations resulting from Mr. Trump’s 2017 tax cut. This left a significant task for the Ministry of Finance in introducing a new tax system for multinational companies. Under the Biden administration, the ministry can amend these regulations to raise taxes on some companies doing business abroad.
And she is also the center of government borrowing, funded by issuing Treasury bills, pushing the US budget deficit to a level not seen since World War II.
So far, we know about Yeren’s views in several areas where he should play a role:
A financial “dove” but a (slightly) financial “hawk”
Yellen is known to be dovish in monetary policy-that is, she favors low interest rates-she often expressed concern about the US fiscal path and the amount it owe. ing.
Mr. Yelen’s financial instability occurred before the coronavirus outbreak and the current recession. It’s a moment when most economists advise the United States not to worry about deficits and spend as much as they need to help households and businesses survive the recession.
Still, Yellen’s earlier comments suggest that he may hesitate to promote large spending programs without raising taxes to offset the budget blow. The federal budget deficit surged to a record $ 3.1 trillion in fiscal year 2020, and Republicans, who are expected to dominate the Senate, have begun to raise concerns again about how much the country owe.
In a 2018 interview at the Charles Schwab Impact conference in Washington, Yellen said that the US debt path is “unsustainable” and “if you have a magic wand, you can raise taxes and reduce post-retirement spending.” He said he proposed a remedy.
Last year, Mr. Yellen touched on the third line of democratic politics when he more directly proposed that reductions in Medicare, Medicade, and social security might be appropriate.
“I don’t think it can be solved without additional income, but it’s hard to believe that it can’t be solved without changes to these programs,” Jellen told the National Center for Senior Citizens’ Investment. Housing & Care Autumn Meeting.
Yellen added that politician candidates and Congress did not like to deal with a review of the US social safety net program. This was “root canal economics,” according to the industry magazine McKnight’s Senior Living.
Mr. Yelen is also a board member of the Responsible Federal Budget Committee, a nonpartisan organization that preaches financial restraint.
Free trader of mind
As Treasury Secretary, Jellen will inherit the tattered global trading system that has been destabilized by Mr. Trump’s aggressive approach to US trade policy. She needs to face a variety of decisions, including whether to continue to tighten sanctions on Mr. Trump’s Chinese companies and officials, or his restrictions on the presence of Chinese companies in the US stock market and retirement portfolio.
Yellen does not hesitate to criticize China’s trade practices, but is known for his strong support for open trade and the international trade system.
Like many on Biden’s team, Jellen said that many of the problems often attributed to trade policy are, in fact, domestic policy to help workers who are experiencing the worst impacts of globalization. Seems to agree that it is due to the reluctance of US authorities to use.
Yellen acknowledges that globalization and trade liberalization have promoted growth and reduced poverty around the world, but these trends have fostered inequality and the rise of populism, leading to a backlash against US trade practices. He also states that he was connected. She expressed concern about the country’s withdrawal from the role of international leader under Mr. Trump and support for the World Trade Organization.
Mr. Yelen was the chairman of the American Economic Society leading to the January Annual Meeting, and thousands of economists gathered in San Diego. She said in an interview that she would organize the meeting schedule and focus on sessions outlining the country’s economy and the benefits of free trade and immigration to the world. This is in a very conflicting position with the Trump administration. “I organized the program, and I don’t think it’s a coincidence that you’re watching it,” she said. “I think it’s very important.”
Like many economists, Mr. Jellen criticized Mr. Trump for focusing on the bilateral trade deficit, explaining tariffs on China as taxes on U.S. consumers, and his trade war with the United States. He warned that it would pose a risk of recession to the economy.
She also expressed skepticism about Mr. Trump’s final trade deal with China, rarely helping U.S. manufacturers, and was “troublesome” with China over technologies such as 5G and artificial intelligence. He said he left behind high tariffs that did not resolve the conflict.
“We have a very difficult problem awaiting us,” Jellen said in a January speech in Hong Kong, open to the “synergies” of sharing and exchanging technology around the world. I urged each country to continue to exist.
However, Mr. Jellen also said that the United States has “a real problem” and “many legitimate problems” in its trade relations with China, especially in China’s infringement of US intellectual property rights, subsidies to state-owned enterprises, and the closure of its walls. He admitted that he had “concerns.” An important technology market for foreign competition.
Like many moderates in Mr. Byden’s administration, Mr. Jellen’s policy recommendations against China are Beijing’s increasingly aggressive and authoritative actions, and strict between both Democrats and Republicans in Washington. It can be constrained by Chinese sentiment.
Swing the pendulum towards financial regulation, not more, less
From her perch at the Brookings Institute, Mr. Yeren expressed concern about the rollback of the Trump administration’s regulations, including what is happening at the FRB.
Yeren said this spring that the 2008 crisis indicated that the FRB needed to aggressively suspend bank payments.
“We learned that we had given up too much money during the crisis,” she said in an interview in April. “I don’t know where this is going. It’s really a tail event and a big threat to the country.”
In the months that followed, Fed officials stopped banks from buying back their shares, but only curtailed dividends.
But she’s not just worried about banks. She also selected the Money Market Mutual Fund as a source of financial system instability.And speak Brookings panel In June, Yellen said the coronavirus exposed a prolonged vulnerability in the financial system and choked in March before the Fed intervened to mitigate it.
“The pandemic has shown that the risks are very realistic and serious,” when hedge funds became accumulating and popular financial conditions, when trading tightened in March, exacerbating market volatility. I tried to solve it. She is also aware of the money market funds where investors park their savings to get more returns than their bank accounts offer, and the practice of lending to already-debt borrowers called leveraged lending. However, it has been flagged as an unfixed weakness.
“These were known. They weren’t dealt with,” she said.
As Treasury Secretary, Jellen led the Financial Stability Oversight Council, which was established after the 2008 crisis, to monitor and respond to financial stability risks. It will give her significant room for training regulatory focus on areas of concern she is flagging.
Yellen has also focused on the risks of climate change in the years following the FRB. She chaired a group of 30 working groups on climate change and finance, and released a report this year calling on governments, regulators and financial companies to take steps to significantly curb carbon emissions.
“Carbon prices should rise gradually over time to incentivize companies and accelerate the transition to net zero,” Yellen said when the report was released.
Her position as head of the Supervisory Council will give her an important podium for talking about green finance. This year, a report sponsored by the Commodity Futures Trading Commission urged the council to begin focusing more specifically on climate risk.
Yellen will envision a vast policy portfolio as Treasury Secretary
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