Politico, sotto voce: Don't blame Yellen for Biden's economic incompetence

Politico, sotto voce: Don't blame Yellen for Biden's economic incompetence
(AP Photo/Carolyn Kaster)

It’s time once again to play … Guess That Leaker! Politico has a fresh feature up today about Janet Yellen, formerly the first woman to lead the Federal Reserve and supposedly a “celebrity” who had been predicted to wield considerable influence over Joe Biden’s economic policy. Instead, Politico’s sources insist, Biden and his team have sidelined and marginalized Yellen in favor of their own ideas.

Is this a complaint from the White House that Yellen is coasting? Or an attempt by Yellen’s allies to let her off the hook for the economic incompetence of the Biden administration? It’s a tough call …

More than a year later, as Democrats are grappling with decades-high inflation, stock market turmoil and rising recession fears, Yellen is rarely on center stage. She has surprised supporters by wielding less influence in the West Wing than her recent predecessors did in the job, which is often considered an administration’s chief economic policymaking post, say people familiar with the matter.

Yellen was overwhelmingly confirmed by the Senate, then was instrumental in pushing Congress to approve $1.9 trillion in Covid relief spending, on top of the historic $4 trillion the government had already authorized.

That sounds a little like a White House eager to blame Yellen for the catalyst to the raging inflation that resulted from Biden’s American Rescue Plan. After all, Yellen did defend the plan even after several economists, most notably former Clinton and Obama adviser Larry Summers, warned that it was unnecessary and could kick-start a high inflation cycle.

But is that what the point of this leak is? Read on …

But in key areas where the Treasury Department typically drives decisions — domestic tax policy, financial appointments, the debt ceiling, China — Yellen and Treasury have often taken a back seat to the National Economic Council or been overruled by the White House, according to nearly two dozen people, including current and former administration officials, those close to the White House and others who know her.

Among the cases they cite: She was rebuffed in her objection to Biden’s choice of a progressive law professor to be the top banking regulator within her own department. The White House failed to consult Treasury on remarks Biden was preparing to give on the debt limit and tasked another Cabinet official with reaching out to CEOs. And when Democrats were deliberating over how to finance the president’s signature Build Back Better proposal, White House officials led the discussions with Congress, not Yellen or another senior Treasury official.

That sounds more like Yellen and/or her allies attempting to distance herself from Biden and his disastrous policies. In fact, it’s tough to imagine why anyone in the White House would make an argument that disconnected Yellen from the process. Biden needs all of the allies he can get on economics. The current economic situation is hardly one for which people are vying to take credit, after all. Biden needs to have Yellen’s credibility and “celebrity” in place to help bolster his standing … not that it’s helping much.

Maybe the leakers don’t come from the White House or Treasury, though. There is another option:

Yellen is hardly out of the loop — she’s the only Cabinet secretary who always attends the daily White House senior staff briefing. But even in an administration where power is centralized in the West Wing, her low profile has puzzled those inside and outside the administration. It has also frustrated others who say the White House lacks a credible, confidence-building message on the biggest challenges facing the economy as a possible recession looms, including the No. 1 issue — inflation.

Yellen, the first woman to serve as Treasury secretary, is seen as a technocrat, a widely respected, above-the-fray leader rather than a flame thrower in a political messaging war. Some Democrats are yearning for more as they see their political fortunes crumble.

“Some Democrats” might want to see Yellen on the campaign trail, apparently. They’d probably be happier campaigning with Yellen than with Biden, and for good reason. “One administration official” tells Politico that Biden should have Yellen on the stump for other reasons, calling her a “not so secret weapon” that Biden for some reason hasn’t used as a backstop to his happy talk about growth and “transitory” inflation. This sounds more like a complaint against both Biden and Yellen for lacking strategic thought on the economy, or at least in the way that both try to sell the administration’s policies.

So … cui bono? What’s the intent behind this leak? It might be a mix of all three, depending on how many sources Politico got for this piece, but we can probably dispense with Option One. No one wants to hog the blame for the economic disaster Biden has created, not even Biden himself, who spends much of his time muttering about “Putin’s tax” and corporate greed. That spin doesn’t get trotted out because the White House thinks their audience wants to hear how great things are going. Biden’s been blame-shifting for months, not taking victory laps, and for good reason.

That leaves us with Options Two and Three. If I had to choose only one of those options, I’d bet on Option Two — a tactical leak from Yellen’s team absolving her of Biden’s idiotic policymaking. I’d also guess that Yellen isn’t terribly interested in becoming the fall girl for Biden on this score by hitting the campaign trail to defend him, which is why “some Democrats” and an administration official are complaining about the “not so secret weapon” staying in the holster.

This tells us something else, too. This administration and Democrat office-holders recognize what a disaster this economy will be for the midterms and perhaps beyond. They’re already jockeying their narratives to dodge responsibility for it. Have fun storming that castle, though, because it will take a miracle for any of them to avoid the stench.

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